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Heritage Looks at Indiana’s Push for Right-to-Work

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More analysis on right-to-work and seperating fact from fiction from the Heritage Foundation’s blog, The Foundry:

Heritage’s James Sherk says the law is a common-sense solution for states wanting to create more job opportunities for workers.

Right-to-work laws reduce the financial benefit from organizing workplaces where unions have limited support. This makes unions less aggressive and encourages business investment, creating jobs. States can and should reduce unemployment by becoming right-to-work states.

Sherk’s analysis also found that right-to-work laws have little effect on wages, despite union claims to the contrary. Opponents of Indiana’s bill are making that argument a major issue in their campaign to defeat the effort.

While supporters in Indiana maintain their focus on the bill’s effect on job creation, there’s also a case to be made about the anti-American concept of forced unionization. Currently in Indiana, the government gives workers no choice. Their dues — 1 percent to 2 percent of wages — are given to union bosses, often to advocate for an agenda that workers might not support.

Passage of the bill in Indiana could boost efforts in other states. Last year New Hampshire lawmakers adopted a right-to-work bill, only to have it vetoed by the governor. The New York Times noted other campaigns in Maine, Michigan and Missouri.

Brinegar: Focus Shines on Right-to-Work

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Chamber President Kevin Brinegar explains how passing a right-to-work law will help enhance Indiana’s economy by attracting many new companies that currently won’t consider the state, according to site selection agencies. He also lays out the facts about right-to-work, noting how it does nothing to prevent unions from organizing; it just means workers won’t be forced to join to keep their jobs.  

Indiana Chamber Outlines Legislative Priorities

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Creating more jobs for Hoosiers by making Indiana the 23rd right-to-work state heads the list of the top 2012 legislative priorities for the Indiana Chamber of Commerce.  Eliminating the state’s inheritance tax, protecting the education reforms of last session and implementing a statewide smoking ban are also among the group’s key goals.

"Far too often, Indiana is not in the running for business growth and expansion plans, as site selection experts across the country repeatedly emphasize that companies won’t even consider non-right-to-work states for these opportunities. And, with these opportunities come thousands of jobs – none of which are currently coming to our state," offers Indiana Chamber President Kevin Brinegar.

He expects the right-to-work debate to be intense at the Statehouse, but says that should not be viewed as a deterrent to pursuing the policy – or used as an excuse to stay on the sidelines.

"The stakes are too high. With over a quarter million Hoosiers unemployed, ways to generate more jobs should be welcome and top of mind for everyone. We need to do everything possible to lower our state’s unemployment rate and improve our economic competitiveness," Brinegar stresses.

"Right-to-work is the most impactful way to tackle those two needs, plus it offers workers more freedom. Right-to-work protects employees from being forced to join a union and pay dues. It does not prohibit labor unions or collective bargaining; it lets employees decide."

The 10 pre-session objectives fall into seven public policy areas: economic development, education, energy, health care, labor relations, local government and taxation.

Below are the Indiana Chamber’s top legislative priorities. The complete list is also available here.

ECONOMIC DEVELOPMENT
– Support the state adopting a right-to-work statute banning the practice of requiring union membership or financial support as a condition of employment.  Would remove a significant impediment to investment and job creation. Would help Indiana continue to distinguish itself from neighboring states and to build a national leadership position in economic development.

EDUCATION
– Support protecting the 2011 reforms involving charter school expansion, school choice, merit pay for teachers and teacher collective bargaining. These new laws are the most significant enhancements to the state’s education system in more than 20 years; they put the focus where it should be – on students and increasing their potential for academic achievement. We need to make sure these reforms stay intact and are executed as intended.

– Support expanding school accountability. Our system, while improving greatly under current state leadership, still offers far too many loopholes for perpetual failure.

ENERGY
– Oppose renewable energy mandates. Indiana already has significant renewable energy development without benefit of a mandate, which would present unreasonable costs to power consumers and utilities.

HEALTH CARE
– Support ban on smoking in the workplace. Smoking is detrimental to employee health and productivity, and contributes to higher premiums for businesses providing employee health benefits.

– Oppose any health care mandates or assignment of benefits (AOB) policy. Mandates and AOB both serve to increase the cost of health care premiums for employers and their employees.

LABOR RELATIONS
– Support work share component incorporated into state’s unemployment insurance system. Would allow employees to collect reduced wages and partial unemployment benefits – as opposed to losing their jobs; is a temporary and practical alternative to layoffs.

LOCAL GOVERNMENT        
– Support common sense simplification and reforms to local government structures and practices. Current local government system lacks high standards against nepotism and allows for too many conflicts of interest. This, coupled with the streamlining of duties and functions as appropriate in county and township government, will result in a more effective system and better use of taxpayer dollars.

TAXATION
– Support elimination of the state inheritance tax. Only 1% of the state’s revenue pool comes from this tax, but the consequences are much higher. Why? This tax serves as a big deterrent for high income individuals to remain in Indiana (and spend money), or keep their assets here. It’s more beneficial for the state and its residents to remove the tax.

– Support exempting the taxation of machinery and equipment. Indiana needs to be on a level playing field with surrounding states – some of which have already made this move or are considering it now. Exempting machinery and equipment from property tax would be another strategic step in our economic development efforts.
 

Prejudiced Push Poll Results Fail to Reflect Reality

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The following is a statement we released this afternoon:

A new poll released today by the Indiana State AFL-CIO is a biased attempt to misrepresent strong public support for right-to-work among Indiana voters.

“This is a biased push poll (worded to elicit a certain response), not a fair or objective measure of support for right-to-work,” asserts Indiana Chamber of Commerce President Kevin Brinegar. “This is comparable to the political poll, for example, that asks ‘if you knew Congressperson X cheated on his or her spouse, would you be more or less likely to vote for him or her?’”

AFL-CIO survey respondents were told that right-to-work would “result in many fewer Indiana workers having union representation” prior to being asked their opinion on the issue.  In contrast, the scientific polling conducted for the Indiana Chamber since 2005 has posed this question: “A right-to-work law says that a worker cannot be required to join a labor union or pay dues in order to get or keep a job. Do you favor or oppose a right-to-work law for Indiana?”

“We’ve scientifically polled this issue statewide five times over the past six years with a fair and objective question and found overwhelming overall support for right-to-work, ranging from 65% to 77%,” Brinegar adds. “In the most recent poll, that support was strong no matter the person’s party identification.”

May 2011 Indiana statewide voter poll question on right-to-work:

  • Democrats: 48% favor, 42% oppose
  • Republicans: 78% favor, 15% oppose
  • Independents: 68% favor, 22% oppose

“Creating jobs and economic growth must be Indiana’s top priority,” Brinegar says.  “Passing a right-to-work law will clearly open the door to the many job-creating companies that won’t even look at Indiana today and provide individual workers with the freedom of choice to determine whether or not they wish to belong to a union.”

Brinegar on Today’s Right-to-Work Announcement by Statehouse Leaders

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Comments from Indiana Chamber of Commerce President Kevin Brinegar on the announcement today by House Speaker Brian Bosma and Senate President Pro Tem David Long that right-to-work legislation will take priority in the 2012 session:

“Passing a right-to-work law is the single most important action our lawmakers can take to put more Hoosiers back to work. Currently, we have more than 200,000 people unemployed in Indiana and many more at risk as employers deal with a still unstable economy. A right-to-work law would open the door to attracting new and expanding companies and the numerous jobs they bring.

“Site selection experts from across the country will tell anyone who will listen that between one third and nearly half of the companies that hire them to find a good location won’t even consider non right-to-work states for their business growth and expansion plans. So Indiana is automatically out of the running in far too many instances.

“Other Midwestern states such a Michigan and Kentucky are now looking at passing right-to-work to gain a dramatic competitive advantage for jobs. We cannot afford to fall behind the competition.

“Right-to-work is about creating jobs, economic growth and fairness. Arguments to the contrary are smoke and mirrors. Right-to-work laws do not prohibit labor unions or collective bargaining, but simply protect workers from being forced to join or pay dues and fees to a labor union.  Workers would still have the right to join or support a labor union, only now it would be his or her decision to make. That’s simply fair.

“Case in point, right-to-work legislation was passed more than 15 years ago for Hoosier teachers. It certainly didn’t destroy their unions or collective bargaining rights, and it didn’t result in lower wages for teachers.

“Going forward, the Indiana Chamber will work to help citizens and lawmakers realize that a vote for right-to-work is a vote for job creation and worker freedom. A person shouldn’t have to be forced to join a union in order to get or keep a job. Today was an important step and I applaud legislative leadership for displaying determination with this issue.”

Join the Team: Right-to-Work is Right for Indiana

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As the country continues to battle through difficult economic conditions, Indiana has the opportunity to make our state more attractive to potential relocation and expansion prospects by becoming a right-to-work (RTW) state. Numerous site selection consultants have testified that Indiana misses out on competing for at least one-third of all company relocation opportunities because it is a non-RTW state. To create more jobs and expand our economy, our lawmakers must enact legislation in the 2012 Indiana General Assembly to make Indiana a RTW state. 

An Indiana Chamber study, published in January 2011, titled, “Right-to-Work and Indiana’s Economic Future,” examined results from various RTW and non-RTW states and found the following:

RTW states create more jobs than non-RTW states
– Growth in Jobs (1977-2008): Indiana, 42.8%; Non-RTW states, 56.5%; U.S., 71%; RTW States, 100%
– From 2000-2009, more than 4.9 million Americans moved from non-RTW states to RTW states

RTW states have faster growth in per capita income than non-RTW states
– Growth in Real Per Capita Income (1977-2008): Indiana, 37.2%; Non-RTW states 52.8%; U.S. 54.7%; RTW States, 62.3%

For more statistics from around the country, view this summary we’ve developed.

Now is the time to make Indiana a right-to-work state, but we can’t do it alone. To pass critical economic development legislation, it takes clout, resources and a strong, influential membership base. We need your membership support today. Membership is the driving force behind our ability to advance our pro-jobs, pro-economy agenda. Contact Tim Brewer at tbrewer@indianachamber.com to become a member and to help grow our right-to-work coalition. Membership is 89% tax deductible.

Column: Right-to-Work States Have Economic Advantage

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Andrea Neal of the Indiana Policy Review Foundation penned the following column on right-to-work laws for the Times of Northwest Indiana. The Indiana Chamber has been an advocate for developing a right-to-work law in the state:

It doesn’t take an economist to spot the common thread in these recent economic development headlines:

• Chattanooga, Tenn., July 29: "Volkswagen hires 2,000th employee."
• Shreveport, La., July 28: "NJ-based bag manufacturer to build Louisiana plant."
• Decatur, Ala., July 21: "Polyplex to build $185 million plant."
• West Point, Ga., July 7: "Kia builds vehicle No. 300,000."

All four stories have Southern datelines. All come from states with right-to-work laws, which prohibit labor contracts that require employees to join a union or pay a union representation fee.

This is the issue that prompted the five-week House Democratic walkout during the 2011 Indiana General Assembly. The Democrats — a minority in both House and Senate — had no other leverage. So when a right-to-work bill came up unexpectedly in a session that was supposed to be about the budget, redistricting and education, they bolted. Republicans capitulated and took the legislation off the table.

In 2012, it will return with a vengeance, and this time Democrats can’t avoid it. Right-to-work has been promised a full public airing. The Interim Study Committee on Employment Issues, chaired by Sen. Phil Boots, R-Crawfordsville, is taking a first crack this summer and hopes to recommend a bill by November. Gov. Mitch Daniels, who didn’t support the bill last session, has hinted he might this time around.

The debate goes back to 1935 when Congress passed the National Labor Relations Act protecting employees’ rights to form, join and be involved in unions. One section of the law permitted contracts that made union membership a condition of employment. Congress modified that language in 1947 when it said states could prohibit these. In response, 22 states passed right-to-work laws. Indiana is one of 28 that currently does not have such a law.

Predictably, at last week’s study committee hearing, business interests favored right-to-work while union leaders opposed it. The economists were divided. Richard Vedder, of Ohio University, summarized research showing that right-to-work states have higher rates of employment, productivity and personal income growth. Marty Wolfson, of the University of Notre Dame, testified that right-to-work laws result in lower wages and benefits.

Their conclusions are not mutually exclusive. If you grant Wolfson’s point, the policy question remains: Which is better? A state with higher wages for some but a weaker economy overall or one with lower wages for some and more vibrant growth, not to mention freedom of choice for the worker?

Companies are voting with their feet. To the extent that manufacturers are expanding in the United States — and few are — they are choosing the South and West where right-to-work is prevalent.

Alabama Gov. Robert Bentley, in announcing the $185 million project by Polyplex, the world’s fourth-largest manufacturer of thin polyester film, was blunt: "Alabama is a right-to-work state, and we will continue to be one. That’s one of our advantages for companies who are looking to build on new sites."

Companies won’t readily admit this because what they say can and will be used against them. Currently pending at the National Labor Relations Board is a case against Boeing, which recently opened a second production facility in South Carolina for its 787 Dreamliner airplane.

South Carolina has a right-to-work law. Boeing’s other production site is in Washington state, which does not. The board’s complaint alleges that Boeing chose South Carolina in retaliation for strikes by Washington workers in violation of the National Labor Relations Act. Its proposed remedy would force Boeing to move its South Carolina operation to Washington. This would be an extraordinary use of federal power to promote the cause of organized labor at one company’s expense.

Right-to-work does not destroy unions. It gives workers the right to decide for themselves whether to join. "This greater accountability results in unions that are more responsive to their members and more reasonable in their wage and work rule demands," the Mackinac Center for Public Policy said.

It should come as no surprise to Indiana legislators that expanding industries favor that kind of relationship. The legislative choice is between protecting unions as we know them or protecting the long-term interests of Hoosier workers.

Brinegar: Time is Now for Right-to-Work

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In light of this summer’s legislative Interim Study Committee meetings, Indiana Chamber President Kevin Brinegar explains why the Chamber is advocating for a right-to-work law. Brinegar notes that Indiana’s Secretary of Commerce and site selection agencies across the country assert 40% of companies won’t consider relocating to states without right-to-work laws.

Northeast Neighbors Vie to Add RTW

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A right-to-work delay in Indiana doesn’t mean it’s not the right time for RTW in other states. The New Hampshire House has passed legislation and Maine Gov. Paul LePage says "we’re going after" right-to-work.

The New Hampshire bill passed the House 221-131 (what the heck they are doing with 350-plus House members in one of our smaller states is a question for another day). The Deputy House Speaker was quoted as saying:

"New Hampshire would be the first state in the Northeast to pass right-to-work legislation and would help us become a haven for employers seeking a pro-business environment,” Pamela Tucker said.

“Freedom is a core New Hampshire belief, and freedom of association and choice is a fundamental right of every NH citizen.”

In Maine, the governor made his intentions known while in Washington for the National Governors Association meeting. His comments to Politico:

"I believe if an individual wants to join organized labor and work under a union contract, they should have the legal right to do so," he said. "At the same token, a person who does not want to work under organized labor and wants to work should have the ability to do so without the threat of having to join and having to pay dues to organized labor."

"It’s that simple," he said. "It’s all about freedom and liberty."

RTW, of course, is on hold in Indiana. It was originally cited as the reason for the House Democrat walkout, but that was quickly proven not to be the case. Legislative leaders said RTW would not return in any form prior to a possible summer study committee, but nearly all the Democrat caucus remains in an Urbana, Illinois hotel, now citing education reform as the reason for their discontent.

The Chamber simply made the case for the advantages of right-to-work in a January 31 study and accompanying press release. We look forward to the debate resuming at a later time on this issue — and now for the other important bills before the General Assembly.