For Immediate Release: Tuesday, January 3, 2012
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810

Indiana should not adopt right-to-work law

Indiana should not adopt a right-to-work (RTW) law because there is no positive relationship between RTW laws and economic growth, a new Economic Policy Institute report finds. Working hard to make Indiana look bad: The tortured, uphill case for ‘right-to-work’ by political economist Gordon Lafer examines RTW advocates’ claims that a RTW law will raise wages and create jobs in Indiana and explains why a law would actually be more likely to reduce workers’ wages and benefits.

Rigorous, properly-designed studies have found that RTW laws reduce wages by $1,500 a year, for both union and nonunion workers, and lower the likelihood that union and non-union employees get health care coverage or pensions through their jobs. They have also found that RTW laws have no impact on job growth in states that adopt them.

Proponents of a RTW law in Indiana have made a number of statements in favor of it that are highly misleading. A National Right to Work Committee factsheet that found that job growth over the past decade was slower in Indiana than in Midwest RTW states did not disclose that North Dakota’s economic growth accounts for all of the difference—and that North Dakota’s growth is due to oil, not to its RTW law. In a PowerPoint presentation, the National Right to Work Committee quoted a site-location firm executive in favor of RTW laws without specifying the quote is from 1975 and no longer accurate. An American Legislative Exchange Council report discussing Texas, a RTW state, does not clarify that the state’s recent job growth has come entirely from public-sector jobs. Finally, an Indiana Chamber of Commerce report on income suggested a causal relationship between RTW laws and income growth, when none exists.

“Legislators should decide this issue on the basis of economic facts rather than political ideology,” said Lafer.