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'Right to Work': GOP aims to gut labor unions



A bill currently sitting in the Indiana General Assembly could spell an end to organized labor as it has existed in Indiana for generations if passed this season.

The so-called "Right-to-Work" bill (House Bill 1028) would guarantee an employee's right not to join a union at a unionized company. Contracts or agreements preventing employers from hiring non-union workers would be rendered illegal, and requiring union membership as a condition of employment would become a Class A misdemeanor.

Supporters of the measure say such laws would help create jobs in a flagging economy – in large part by enticing company migration from other states that do not have RTW laws (of the 22 states with Right to Work laws currently on the books, the closest to Indiana are Tennessee and Iowa).

But critics say the legislation would obliterate unions' collective bargaining power, which would lead to lower wages, fewer benefits and poorer working conditions for Indiana's workers.

"If Right to Work laws pass, everybody will make less," said Allison Luthe, lead organizer for Central Indiana Jobs with Justice (JwJ), a coalition of unions (see sidebar, right). "FedEx and UPS for example – one is union, one is not – they both make very comparable wages because everybody knows that you could go work at the other one."

Gov. Mitch Daniels has said he would rather avoid the issue for now, but powerful business groups like the Indiana Chamber of Commerce (ICC) have made a strong public push for the bill. With control of both chambers in the Statehouse, their friends in the GOP have a clear and open path toward making the bill into law if they want to.

Politically charged

RTW legislation has been hugely divisive since it was introduced the first day of the legislative session, when a freshly-gelded Democratic House caucus attempted to keep the bill from even being introduced.

At the time, it seemed Democrats could face a major battle.

"If it hits the floor, it'll probably shake down the thunder from the sky and delay a lot of things," House Minority Leader B. Patrick Bauer told Nuvo in mid-January. "It's up to (Republicans) whether or not they want to ram it through."

Less than a month later, however, close observers of the Statehouse say there may not be enough political will to pass RTW, even with strong Republican majorities.

"I think it's pretty well known that the governor is not anxious to see this legislation move and the leaders in the House and the Senate... have kind of hewed to that, too," said John Ketzenberger, president of the Indiana Fiscal Policy Institute, a non-profit group that specializes in research on state tax and spending policies in the state.

"Unless they say it's going to happen, it's not going to happen," he said. "They see it, rightfully, as a threat to the rest of their agenda."

Even with the bill still in committee, more than 600 members of the United Steelworkers Union planned to rally at the Statehouse on Tuesday, Feb. 15 according to a report Monday in The Times of Northwest Indiana. Ketzenberger said legislators could expect unions to mobilize far bigger demonstrations if the bill goes to a vote on the House floor.

"The Right-to-Work issue is as politically charged as anything except possibly redistricting, and if the legislature takes up seriously Right to Work, then I think you'll see that teachers rally from the other day times ten," he said, referring to a rally earlier this month in which over 1,000 educators flooded the Statehouse in opposition to proposed education reforms, according to news reports.

RTW advocates are running out of time, however. Rules of the General Assembly require that House bills be received at the Senate by Feb. 28. As of Feb. 14, the House version had only had its first reading.

Wage vs. income

Right-to-Work legislation has always faced stiff opposition whenever it has arisen. But this latest bill got a boost in recent weeks because of a highly publicized ICC-commissioned study indicating that RTW would increase the flow of jobs, money and people into the state if passed.

Led by Ohio University economist Richard Vedder, the study concludes that Indiana, had it adopted RTW in 1977, would have seen an increase in per-capita income of $2,925 by 2008. An average family of four, it further concludes, would have seen increases of $11,700 a year or more.

"If the state of Indiana were to avail itself of the opportunity to adopt (an RTW) law, it could benefit greatly in terms of future economic growth," the study's authors assert. "RTW laws attract productive resources (both capital and labor) to a state, while the absence of such laws repels them."

Vedder's past research makes him a perfect fit for pro-RTW advocates like the ICC. In a 2010 report for the Cato Institute, a conservative-leaning think tank, Vedder's position was clear, equating historical efforts of the labor movement in the Twentieth Century with the "eroding of employment liberty" and "infringements on liberty." No mention was made of what labor organizing did to help abolish child labor, deadly working conditions and to establish a minimum wage.

Union leaders were quick to rebut the study's conclusions. In a statement released on the heels of the ICC report, Nancy Guyott, president of the Indiana AFL-CIO, a labor union coalition, noted that yearly wages in non-RTW states like Indiana were $5,500 higher on average than in RTW states, according to U.S. Department of Labor data.

Even if per-capita income were higher in RTW states, the implication was that such wealth would mostly flow upward.

"Per capita income includes all forms of income," Guyott wrote. "Most working people earn wages; most CEOs earn income from their generous stock options. The more accurate number to look at is wages."

Jeff Brantley, vice president of political affairs for the ICC, argued that such analysis was emotionally-driven and typical of the sort of class-warfare arguments traditionally raised by the AFL-CIO. The facts, he argued, did not support Guyott's conclusions.

"The more a state is competitive in attracting companies, the more pressures there are to increase wages because there's more economic dynamism, there's more competition for labor," he said. "I haven't seen any evidence that Right to Work is to blame for (wealth stratification)."

Brantley also noted that most RTW laws were passed in the 1940s and 50s. In the last two decades, only Oklahoma had become a new RTW state, so RTW could not be blamed for lower wages, he said.

"Right to Work states have, historically, even before they were Right to Work states, had lower wage rates, so their base was lower," he said. "What the study shows is that after they adopted Right to Work laws, their growth has been significantly higher."

Michael Hicks, director of the Center for Business and Economic Research and professor of economics at Ball State University agreed that RTW laws did not create lower wages. Low wages historically spurred economically struggling states to pursue anti-union reform, he said, not the other way around.

Still, Hicks argued that the causality between RTW legislation and job and population growth was likely much less than asserted in the ICC report. RTW was usually just one of several such pro-business reforms created in economically troubled states, and it was difficult to isolate the effects of RTW, he said.

Other factors across many RTW states – like better climate, lower tax rates and real estate prices were factors as well.

"How big is the effect, that's the economic question," Hicks said, noting that RTW legislation only affects 5 to 10 percent of workers in a given state. "My sense from reading the literature, including Richard Vedder's report, is that Right to Work has a smaller effect than its supporters believe and a much smaller effect than its detractors believe."

Hicks could not point to any empirical studies that examined quality-of-life trends in states where unions had little power to organize for better benefits and working conditions, but noted that the distribution of income was getting worse around the country on the whole.

"There's no doubt the pie is getting bigger," he said. "The question is, how is the distribution of the pie going?"

Catherine Green contributed reporting to this article.


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