Friday, August 18th, 2017

Right-to-work would provide economic boost

Posted: Monday, January 31, 2011

Article submitted by the Indiana Chamber of Commerce

January 31, 2011 (INDIANAPOLIS) — Improving the per-capita income of Indiana workers and creating more job opportunities for Hoosiers would be among the major benefits of Indiana becoming the 23rd state to pass a right-to-work (RTW) law, according to research released today. In addition, statewide voter polling results show Hoosiers favoring adoption of RTW by a 3-to-1 margin.

Dr. Richard Vedder, an Ohio University economist, and his colleagues report in the study (Right-to-Work and Indiana’s Economic Future) that if Indiana had adopted RTW in 1977, per capita income would have been $2,925 higher – or $11,700 higher for a family of four – by 2008. Looking forward (projecting the same growth rate in the next 10 years after adjusting for inflation), passage of a RTW law in 2011 would raise per capita income by $968 – or $3,872 for a family of four – by 2021.

Site selection experts and economic development consultants around the country contend that at least one-third to as many as one-half of companies looking to grow businesses and add jobs will not even consider a non-RTW state. Also, the new study finds that nearly five million Americans left non-RTW states since 2000 to move to RTW states with increased job opportunities and higher economic growth rates.

“This is the single most important step Indiana lawmakers could take in putting more Hoosiers back to work,” states Mike Blakley, chairman and CEO of Indianapolis-based Blakley Corporation and 2011 chair of the Indiana Chamber of Commerce board of directors. “The Indiana Economic Development Corporation has done an outstanding job in its business attraction and expansion efforts, but a right-to work law would open the door to hundreds of new deals and thousands of new jobs.”

The researchers note Indiana’s lagging economic numbers during the 31-year period (1977-2008):

* Per-capita income growth: RTW states, 62.3%; United States average, 54.7%; non-RTW states, 52.8%; Indiana, 37.2%
* Employment growth: RTW states, 100%; U.S. average, 71%; non-RTW states, 56.5%; Indiana, 42.8%
* Growth in real personal income: RTW states, 164.4%; U.S. average, 114.2%; non-RTW states, 92.8%; Indiana, 62%

In the study, Vedder writes, “Our results suggest that the impact of a RTW law is to increase economic growth rates by 11.5%. The work (also) suggests that over two-thirds of the difference between Indiana and the national rates of economic growth in modern times is explainable by Indiana’s lack of a RTW law.”

He describes Indiana not adopting a RTW law, concluding, “Indiana has failed to avail itself of that opportunity and has paid a high economic price for not doing so as RTW laws attract productive resources (both capital and labor) to a state, while the absence of such laws repels them.” The presence of a RTW law over that timeframe would have allowed Hoosier workers to earn $19 billion more in 2010. The additional state income and sales tax generated would have eliminated the state’s projected $1 billion deficit heading into the next two-year budget cycle.

A separate, scientific public opinion poll of 800 registered voters (conducted between December 14-21, 2010), found that by a 3-to-1 margin Indiana voters support passage of a RTW law. Respondents were asked: “Do you favor or oppose a right-to-work law for Indiana?” The results: 69% support; 23% oppose; 8% uncertain. Of the 69% in favor, 41% indicated their strong support.

Significant majorities of support exist across all demographics – including age, income, gender, occupation – and political identification. The support/oppose totals by political party: Republicans, 80% 13%; Independents, 74%-13%; and Democrats, 53%-37%. Even among union members, 44% were in support of a RTW law, with 48% opposed and 8% uncertain.

Asked to identify the single major problem facing Indiana now, 53% answered lack of jobs or low wages. Related responses such as “poor economy” and “loss of tax base” raise the level of the economy as the leading concern to 60%.

Indiana Chamber President Kevin Brinegar contends, “The impact numbers are clear in the analysis and Hoosiers are in strong support. This is the opportunity to further separate Indiana from its Midwest neighbors, make our state a prime contender for the economic projects we miss out on due to the lack of a right-to-work law and, most importantly, provide more jobs for Hoosier workers.”

Dr. Verne Kennedy, senior analyst for Market Research Insight, served as project director for the poll. Kennedy has conducted more than 100 public opinion surveys in Indiana over the past two decades.

The study was commissioned by the Indiana Chamber of Commerce Foundation; it is available online at www.indianachamber.com/studies-reports.

The Indiana Chamber of Commerce is the state's largest broad-based business advocacy and information organization, representing nearly 5,000 member companies that employ 800,000 Hoosier workers.