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News from EPI Another win for the 1%: ‘Right to work’ signed into law in Indiana

For Immediate Release: Friday, February 3, 2012
Contact: Phoebe Silag or Karen Conner, 202-775-8810

From Working Economics, the EPI blog:

Another win for the 1%: ‘Right to work’ signed into law in Indiana

By Ross Eisenbrey, EPI vice president

When Indiana Gov. Mitch Daniels signed a “right-to-work” bill into law on Wednesday, working people and unions lost another battle in the relentless war the 1 percent have been waging against the 99 percent. Right to work (RTW) does not guarantee anyone a job. Rather, it makes it illegal for unions to require that each employee who benefits from a union contract pays his fair share of the costs of administering it. By making it harder for workers’ organizations to sustain themselves financially, RTW aims to undermine unions’ bargaining strength and eventually eliminate them.

Twenty-two states—predominantly in the South —already had right-to-work laws, mostly dating from the McCarthy era. But since the Republican sweep of state legislatures in 2010, a coalition of corporate lobbies, right-wing ideologues and conservative operatives have seized the moment to push RTW into traditionally union-friendly parts of the country. They’ve targeted Minnesota, Ohio, Michigan and New Hampshire for their next campaigns.

RTW is sold as a job creation strategy, but as Gordon Lafer and Sylvia Allegretto have shown, it’s a big lie. In fact, it’s all about cutting wages, which is what happens when unions are weakened or eliminated. The Chamber of Commerce is almost honest about this wage-cutting goal: They explain that “unionization increases labor costs,” and therefore “makes a given location a less attractive place to invest new capital.” Unfortunately, workers do get lower wages from RTW, but the jobs never come. As EPI has shown, the impact of RTW laws is to lower average income by about $1,500 a year and to decrease the odds of getting health insurance or a pension—for both union and non-union workers. Yet when Oklahoma (the last state before Indiana to pass RTW) passed RTW in 2001, the jobs never materialized. The number of companies coming into the state—supposed to increase by “eight to ten times”—instead decreased by 30 percent.

Gov. Daniels and his right-wing allies want workers to believe that RTW will be a big draw for companies making relocation decisions, but surveys show it’s irrelevant, ranking 16th on a list of factors small manufacturers consider. And for higher-tech, higher-wage employers, nine of the 10 most favored states are non-RTW, led by liberal, pro-union Massachusetts.

Fifty years ago, Martin Luther King Jr. warned against “false slogans such as ‘right to work’… . [Whose] purpose is to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone.”

The U.S. economy has been squeezing the middle class for decades, with wages stagnating and median household income actually falling over the last decade. RTW is a factor in this decline. It’s time to stand up for decent wages and benefits, to stand up for unions, and to stop the RTW virus from spreading any further.

MORE: See EPI’s recent research on RTW

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