OPINION: Right-to-work is the wrong way to go

Morton J. Marcus is an economist formerly with the Kelley School of Business, Indiana University. His column appears in numerous Indiana newspapers.

          The Indiana General Assembly would do the state a service by NOT bringing right-to-work (RTW) legislation up for a vote. This is contrary to the position of the governor and the Republican leaders who see a political opportunity to stomp on unions that tend to support Democrats.

          Instead the General Assembly should spend its time authorizing the administration to designate how the Star Spangled Banner should be sung. You laugh? That is an actual proposal from a legislator who believes in limited government, except when it comes to our national anthem.

          What are the arguments for RTW? First, workers in places where there is a union contract would not be required to pay union dues. The union would still be required to negotiate on behalf of all workers. Non-dues paying workers would benefit from whatever success the union has in those negotiations. It’s a classic case of representation without taxation.

          Second, supporters of RTW claim that states with RTW laws do better in job and income growth than states without RTW. This claim is based on questionable research and fallacious assumptions. But on this faulty limb the administration rests its argument that Indiana is losing out on opportunities to attract new businesses.

          Why do businesses locate where they do? Ultimately it comes down to the net revenue to be obtained when located in one place versus another. If Indiana has the lowest costs of doing business among its competitor states and the best location for maximizing revenues, firms will locate here whether or not we have RTW legislation.

          Our state is well-known for having low taxes for businesses. We also excel in denying adequate workmen’s compensation and enjoy stingy unemployment benefits. We eliminated the inventory tax as an economic development measure while raising the tax burden of households. The cadre of promoters who shill for the state are quick to point out these benefits to firms considering a Midwest location.

          Our ever-eager promoters dream of being surrounded by states without a RTW law. They imagine a flood of businesses leaving Michigan, Ohio, Illinois and even Kentucky to enjoy lower wages and more control over working conditions in RTW Indiana.

          RTW is associated with lower wages, fewer benefits and less employee influence over working conditions. Indiana has already told its school employees from teachers to janitors that they can have a union to represent them on matter of wages but not working conditions. RTW might drive unions into giving up their concern for working conditions in order to concentrate on wages.

          Business sees union influence on working conditions as a denial of the firm’s prerogative to have unmitigated control over the work place. Unions have challenged the misuse of this power. In some cases, however, unions have created and perpetuated work rules that lead to grotesque inefficiencies. Ever try to discipline or fire a useless or disruptive union worker?

          Should Indiana favor lower wages for workers? Should Indiana favor unilateral control of the work place by employers? Most Hoosiers would say NO, if they thought about it. But mention unions as the countervailing force to business power and hackles rise on the Hoosier neck. Despite the fact that many Hoosiers are union members and many others benefit from their favorable wages, Indiana is at heart anti-union.

          Why? The answer probably lies back in the 19^th and early 20^th centuries when we were an agricultural state with strong anti-immigrant sentiments. As industry moved in, so did foreign-born citizens. Both were resented by native-born workers of the land.