A Gathering Storm Over ‘Right to Work’ in Indiana

1/11/2012 12:00:00 AM

Indiana Right to work state???

INDIANAPOLIS — Nearly a year after legislatures in Wisconsin and several other Republican-dominated states curbed the power of public sector unions, lawmakers are now turning their sights toward private sector unions, setting up what is sure to be another political storm.

The thunderclouds are gathering first here in Indiana. The leaders of the Republican-controlled Legislature say that when the legislative session opens on Wednesday, their No. 1 priority will be to push through a business-friendly piece of legislation known as a right-to-work law.

If Indiana enacts such a law — and its sponsors say they have the votes — it will give new momentum to those who have previously pushed such legislation in Maine, Michigan, Missouri and other states. New Hampshire’s Republican-controlled Legislature was the last to pass a right-to-work bill in 2011, but it narrowly failed to muster the two-thirds majority needed to override a veto by the Democratic governor; an Indiana law would re-energize that effort.

Right-to-work laws prohibit union contracts at private sector workplaces from requiring employees to pay any dues or other fees to the union. In states without such laws, workers at unionized workplaces generally have to pay such dues or fees.

Many right-to-work supporters say it is morally wrong to force unwilling workers to contribute to unions, while opponents argue that it is wrong to allow “free riders” not to support the unions that represent them in negotiations and arbitrations.

Right-to-work is also a potent political symbol that carries serious financial consequences for unions. Corporations view such laws as an important sign that a state has policies friendly to business. Labor leaders say that allowing workers to opt out of paying any money to the union that represents them weakens unions’ finances, bargaining clout and political power.

Organized labor has vowed to fight the Indiana bill, which it says would turn the state into the “Mississippi of the Midwest.” If the legislation passes, Indiana would become the first state to have such a law within the traditional manufacturing belt, a union stronghold that stretches from the Midwest to New England. Right-to-work laws exist in 22 states, almost all in the South and West, with Oklahoma the most recent to pass one, in 2001.

Right-to-work supporters say they can win quick passage because Indiana’s Republican governor, Mitch Daniels, backs the bill and Republicans have large majorities in the House and Senate.

Democratic and union leaders say they hope to block the legislation, in part by flooding the statehouse with thousands of protesters — exactly as unions did last year in Wisconsin, Ohio and Indiana in an attempt to defeat legislation that limited bargaining rights for public sector workers. Democratic lawmakers in Indiana have also hinted that they might once again flee to Illinois, as they did last year, to block votes on anti-union bills.

Indiana’s Republican leaders are eager to pass the bill — and end any related commotion — before Feb. 5, when the national spotlight turns to Indianapolis for the Super Bowl.

In heading the legislative push, Brian C. Bosma, the Republican speaker of the Indiana House, argues that not being right-to-work is a big handicap when Indiana competes for jobs.

“Local economic development officers testified that 25 to 50 percent of companies looking to create employment, whether through expansion or locating a new facility, just took Indiana and other non-right-to-work states off the table,” he said in an interview. “This is stopping employers from coming to Indiana. We need to deal with that.”

Kevin Brinegar, president of the Indiana Chamber of Commerce, praised the bill as a low-cost way to improve the business climate. “It’s not like we’re going to spend a billion dollars on tax incentives,” he said. “It’s free.”

But opponents say the talk of improving Indiana’s business climate is just a pretext.

“It’s a political attack on what the Republicans see as one of their main opponents — organized labor,” said Jim Robinson, the top United Steelworkers official in Indiana. “They want to weaken unions to help assure continued Republican majorities.”

In Indiana, 8.2 percent — or 178,779 — of the state’s private sector workers belong to unions, compared with 6.9 percent nationwide. That is down from more than 20 percent three decades ago as many unionized factories have closed and largely nonunion industries like finance and retail have expanded.

After Governor Daniels eliminated the ability of state employees to bargain collectively in 2005, Indiana’s public sector unions grew weaker. Over all, organized labor here does not have nearly the electoral or lobbying clout that it has in states like California and New York, where unions remain powerful.

Thomas McKenna, who headed Indiana’s Department of Commerce under a Democratic governor, said it was absurd for the bill’s supporters to suggest that even one-quarter of companies ruled out Indiana simply because it does not have right-to-work status.

He said that the legislation’s supporters had repeatedly refused to cite the name of any company that has taken that position. “I think they’re making it up,” he said.

Many studies have assessed the impact of right-to-work legislation, although much of the research is from years ago, when right-to-work was a hotter issue.

Henry Farber, a labor economist at Princeton, said right-to-work laws, by allowing “free riders,” shrink union treasuries. One study found that the portion of free riders in right-to-work states ranged from 9 percent in Georgia to 39 percent in South Dakota.

In another study, David T. Ellwood, the dean of the Kennedy School of Government at Harvard, and Glenn A. Fine, a former Justice Department official, found that in the five years after states enacted such legislation, the number of unionization drives dropped by 28 percent, and in the following five years by an added 12 percent. Organizing wins fell by 46 percent in the first five years and 30 percent the next five. Over all, they found, right-to-work laws, beyond other factors, caused union membership to drop 5 percent to 10 percent.

The Indiana Chamber of Commerce said that if Indiana had become right-to-work in 1977, its per capita income would be $2,925 higher because more factories and jobs would have come to the state. Richard Vedder, an Ohio University economist and the main author of the chamber’s study, said economic growth had been faster in the 22 right-to-work states and the law was a major cause.

Martin Wolfson, a Notre Dame economist, disputed those findings. He disagreed that right-to-work laws increase incomes, and said there were other, more important causes for right-to-work states’ faster economic growth, including the boom in oil prices and the influx of immigrants into Texas and Florida.

A recent study by the Economic Policy Institute, a labor-backed research center, found that in right-to-work states, wages were 3.2 percent, or $1,500, lower per worker each year, after accounting for the cost of living and other factors.

John Sampson, president of the Northeast Indiana Regional Partnership, an economic development group, said companies were attracted to right-to-work states not because of lower wages but because the weakened role of unions means that companies get greater operating flexibility, which lowers their costs.

“Some people will say this is about bashing organized labor,” Mr. Sampson added. “From my point of view, there’s nothing better for labor than to create increased demand for jobs.”

Steven Greenhouse

NY Times