INDIANAPOLIS | Proponents of an Indiana right-to-work law claim it will lure new businesses to the state, bringing thousands of jobs to be filled by currently unemployed Hoosiers.
But a review of state unemployment data finds nearly half of right-to-work states have a higher unemployment rate than Indiana, and the most recent state to adopt right-to-work -- Oklahoma in 2001 -- since has lost many of its manufacturing jobs to Mexico and China.
A right-to-work law prohibits nonunion members at a union workplace from having to pay "fair share" fees for collective bargaining services usually required to be provided by the union for all employees.
Union leaders say the law is designed to weaken unions by forcing them to give nonmembers union services for free, while business supporters of right-to-work, such as the Indiana Chamber of Commerce, claim the law would make unions more responsive as unions no longer would be guaranteed funds from nonmembers.
Mitch Roob, CEO of the Indiana Economic Development Corp., the state's commerce department, said without right-to-work many businesses considering relocation won't even look at Indiana -- despite its low business taxes and business-friendly regulations -- because companies want to avoid the hassle of union work rules.
"Right or wrong, many companies perceive non-right-to-work states as hostile to business," Roob said.
But many states with a right-to-work law are no better off than Indiana when it comes to jobs -- 10 of the 22 right-to-work states have unemployment rates higher than the Hoosier State.
The right-to-work state of Nevada has the highest unemployment rate in the nation at 12.4 percent. Indiana's unemployment rate is 8.3 percent.
Among right-to-work states with an unemployment rate less than Indiana, many have natural resources that ensure jobs even when the overall economy slumps, such as North Dakota (3.2 percent), South Dakota (4.8), Oklahoma (5.3), Wyoming (5.9) and Texas (8.2).
State Rep. David Niezgodski, D-South Bend, told a legislative panel studying right-to-work last week that those unemployment numbers prove Indiana does not need a right-to-work law.
"So many states right now are trying to pass a right-to-work law that if they all pass them, we're going to be competing against each other," Niezgodski said.
In 2001, Oklahoma legislators promised a new "golden age" for their state if right-to-work became law, arguing manufacturers from across the country would rush to relocate.
But after seeing its manufacturing employment grow to nearly 177,000 jobs in 2000 from 155,000 in 1990, Oklahoma lost 50,000 manufacturing jobs in the decade since enacting right-to-work in 2001.
Gordon Lafer, a University of Oregon political scientist who studied Oklahoma's experience, said right-to-work isn't to blame for the loss of those manufacturing jobs, but the law did nothing to keep them, as nearly all low-skill, low-wage manufacturing has moved overseas.
He said the only real effect of right-to-work in Oklahoma has been lower overall wages, with both union and nonunion workers taking home about $1,500 less a year.
"Right-to-work has no impact on job growth whatsoever," Lafer said.