Do public sector unions erode business climates?

Abstract

This article addresses whether the growing prevalence of public sector unions exerts effects that spill over to the private sector. The hypothesis that higher prevalence erodes business climate is tested on an index of CEO ratings of the best and worst states in which to conduct business. Evidence indicates that business climates are inversely related to public sector union prevalence. An implication is that erosion of business climates should be a concern to union members as well since they rely on businesses, their employees and customers to pay for government.