New Study: ALEC Economic Rankings a Recipe for Economic Inequality and Stagnation

For the past five years, the American Legislative Exchange Council (ALEC) has partnered with supply-side economist Arthur Laffer to rank the fifty states according to their economic outlook. As Progressive States Network has noted in the past, the rankings published alongside the group's yearly Rich States, Poor States report, are in fact based on a corporate wish-list of criteria such as low state minimum wages and public sector job losses that are hardly concerned with the economic realities faced by millions of families actually living in those states.

A new study released today by Good Jobs First and the Iowa Policy Project takes an even closer look at the ALEC-Laffer rankings, and weighs them against actual economic results in the states. The verdict? That these rankings rely on methodologies and arguments "that range from deeply flawed to nonexistent" — and moreover, that states who actually follow ALEC's economic advice have done demonstrably worse economically over the past five years.

Dissecting the methodology of the ALEC rankings, the authors find that policies encouraged by ALEC as being beneficial to state economies — including lowering state and local taxes, the elimination of estate and inhertance taxes, and wage suppression policies — "contradict longstanding peer-reviewed academic research" on state economies, and don't have any correlation with positive economic results. Rather, as Dr. Peter Fisher, primary author of the study, notes, ALEC policies are "a recipe for economic inequality, declining incomes, and undermining public infrastructure and education that really matter for long-term economic growth.”

The release of the study, Selling Snake Oil to the States: The American Legislative Exchange Council's Flawed Prescriptions for Prosperity, comes at the end of a year that has seen unprecedented national attention on ALEC for their support of "shoot-first" and voter suppression bills, accompanied by legislators leaving the group in droves and a voter rebuke of over 100 ALEC-affliated legislators at the polls. With ALEC themselves promising to focus more on economic issues going forward, this new report should prove useful in defending against attempts by ALEC to peddle their wares in the states in 2013 legislative sessions.