Commentary

Manufacturing Employment on the Rise in ‘Right to Work’ Indiana

Stan Greer
By Stan Greer | April 6, 2017 | 12:16 PM EDT

Then-Congressman Mike Pence (now the U.S. Vice President) contended the new law prohibiting the termination of employees for refusal to pay dues or fees to a union would make the Hoosier State more attractive to manufacturing employers and foster job growth in that high-paying sector. (AP Photo/Bebeto Matthews)

As Indiana became America’s 23rd Right to Work state in early 2012, just a little more than five years ago, many proponents like then-Congressman Mike Pence (now the U.S. Vice President) contended the new law prohibiting the termination of employees for refusal to pay dues or fees to a union would make the Hoosier State more attractive to manufacturing employers and foster job growth in that high-paying sector. Big Labor and its allies loudly disagreed.

Today, Indiana citizens who emphasized Right to Work’s potential as a job-creation strategy have ample evidence to demonstrate they were right.

In February 2012, the month the Right to Work statute was adopted, Indiana had 470,800 manufacturing jobs, according to seasonally unadjusted U.S. Labor Department data. By January 2017, the most recent month for which statistics are available at this writing, Indiana’s total manufacturing employment had increased by 11.2 percent to 523,700.

Indiana’s percentage increase in factory jobs since it became Right to Work is more than two-and-a-half times as great as the nationwide gain of 4.3 percent over the same period. Meanwhile, manufacturing employment has actually fallen by 1.9 percent in Illinois, Indiana’s forced-unionism neighbor to the west. Ohio, Indiana’s forced-unionism neighbor to the east, has had a percentage gain only about one-half as great as Indiana’s.

U.S. Labor Department data also show that the average weekly earnings for manufacturing employees in Indiana have grown by 12.7 percent since February 2012, faster than the national average and far above the 7.0 percent increase in inflation as measured by the consumer price index over the same period.

One notable beneficiary of the manufacturing success that Indiana has enjoyed since passing Right to Work is the community of Anderson, located a little less than an hour’s drive northeast of Indianapolis. As a March 16 report by Kylie Veleta for Inside Indiana Business noted, not long ago Anderson was “making headlines for having one of the highest unemployment rates in the country.”

But today, undoubtedly thanks in part to Indiana’s Right to Work law, Anderson is a “hotbed of investment” from manufacturers. One example is Greenville Technology Inc. (GTI). In July 2012, GTI announced it would invest $21.5 million to build a new automotive parts manufacturing facility in Anderson, creating 325 jobs. In early 2016, GTI reported it would invest another $24 million in the Anderson facility, potentially adding another 110 jobs.

In this Wednesday, Feb. 8, 2012, file photo, Rick Twitty installs seats into 2012 Toyota Highlander vehicles at the Toyota Motor Manufacturing Indiana, Inc., plant in Princeton, Ind. On Tuesday, Jan. 24, 2017, Toyota said it will add 400 jobs and invest $600 million at the Princeton SUV factory. (AP Photo/Erin McCracken)

In November 2015, NTN Driveshaft Inc. broke ground on a plant in Anderson that is ultimately expected to employ 500 people. And just this month NTK Precision Axle Inc., a joint venture that includes NTN Driveshaft, made public plans to build a $100 million facility in Anderson that is projected to create nearly 200 jobs by 2021.

Since Indiana became the first state in the heavily industrial Great Lakes region to pass and fully implement a Right to Work law five years ago, five other states – Michigan, Wisconsin, West Virginia, Kentucky and Missouri – have banned compulsory unionism.  And a growing number of business owners and managers have been willing to brave union militants’ fury and acknowledge in public what many have said for decades in private: Right to Work laws are often a make-or-break factor for determining where a job-creating investment is going to be made.

For example, in April 2015, Rodney Scagline, executive vice president of Carnegie, Pa.-based Union Electric Steel, included Indiana’s Right to Work law on a very short list of reasons why his firm had decided to add roughly 35 jobs at its Valparaiso plant.

“Operating in a low-tax, right-to-work state like Indiana,” explained Scagline, “has enhanced our ability to deliver what we need to our customers, and we look forward to our continued success here in Valparaiso.”

Of course, Right to Work isn’t primarily an economic issue. The most important reason to pass Right to Work laws is to protect the individual employee’s freedom of choice with regard to union membership or nonmembership.

But the fact that a vast amount of nonpartisan statistical evidence indicates that Right to Work laws are economically beneficial is another important consideration in their favor.

Stan Greer is senior research associate at the National Institute for Labor Relations Research. NILRR’s website is www.nilrr.org.

DONATE

Sponsored Links