Monday, April 22nd, 2019

Hoosiers deserve the 'Right-to-Work'

Posted: Monday, January 31, 2011

By Kevin Brinegar, president of the Indiana Chamber of Commerce

Indiana is in fierce competition with other states for jobs, business investment and economic development projects. Site selection experts across the country and our own secretary of commerce emphasize that 30% to 40% of companies/consultants won't even consider non right-to-work states for their business growth and expansion plans.

Indiana, in essence, is competing with one hand tied behind its back. That makes the state's recent economic development successes all the more noteworthy. But just imagine the possibilities if that rope was loosened and this powerful tool could be utilized.

Just how powerful would that tool be for Indiana employees and the overall state economy? Despite a state union leader guessing in mid-November that right-to-work lowers average employee wages, just the opposite is true. Numerous studies have shown that in the past 20 years, both employment and income levels have grown significantly faster in the 22 right-to-work states than in the 28 that have failed to take advantage of this opportunity.

Soon-to-be-released research by Dr. Richard Vedder, an economist at Ohio University, finds that if Indiana had adopted a right-to-work law in 1977, the household (family of four) income of Hoosiers would be $11,700 higher than it is today! That is critically important considering Indiana's per capita income growth from 1977 to 2008 was 37.2% compared to 62.3% for residents of right-to-work states during that same period.

Collectively, right-to-work would have allowed Hoosiers to earn $19 billion more in 2010. This level of personal income would have generated enough additional state income and sales tax revenue to completely eliminate the state's projected deficit heading into the next two-year budget cycle. If that were the case, no further cuts for universities would be needed and additional funding for K-12 schools and local government units would be available.

Vedder also finds that during the past 30 years that over two-thirds of the difference between the Indiana and national rates of economic growth can be explained by our state's lack of a right-to-work law.

Public backing for right-to-work has remained strong. Statewide voter polls have consistently shown support levels of 70% or higher. In addition, 52% of poll respondents say that knowing that business owners and operators back right-to-work makes them even more likely to support the law. Also, 60% of those polled said their support for right-to-work was even stronger knowing that right-to-work states have faster growing economies and greater job growth. Even a significant number (44%) of union households are right-to-work supporters.

Finally, there is the simple issue of fairness. Workers should not be forced to join a union and/or pay union dues as a condition of getting or keeping a job; currently there are aproximately 194,000 Hoosier workers in that situation. Union leaders will complain of "free riders," and say that it's not fair for non-members to receive the same compensation and benefits as dues payers, but under the National Labor Relations Act unions are permitted to negotiate "members only" contracts. But they seldom do, preferring to include all employees and receive the increased dues that system generates.

Federal law allows contracts that force employees to join the union or pay an equal dues amount in order to keep their jobs. But it also allows states to adopt right-to-work laws that prohibit such contracts. Workers would still have the opportunity to join or support a labor union, but under the right-to-work law it would be the individual's choice - not one dictated by union leaders.

With Indiana's unemployment rate still hovering near 10% and competition for economic development projects - and the high-wage positions they bring - at an all-time high, shouldn't Indiana pass a right-to-work law to accelerate job and wage growth for Hoosiers?