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Original article URL: http://bridgemi.com/2013/01/indiana-reaction-belies-pro-right-to-work-claims/

Economy & competitive position/Public sector

Indiana reaction belies pro-Right to Work claims

FORT WAYNE, Ind. — In the weeks after “Right to Work” became law in Indiana, Michigan-based Android Industries was anointed a poster child for the job growth state officials predicted would flow from the measure.

Company officials insisted it was no accident they picked Indiana to open an automotive plant in suburban Fort Wayne in 2012. It supplies mounted tires for full-sized pickup trucks assembled at an adjacent General Motors plant.

“Recently, Indiana became a right-to-work state and offers us a competitive location and a skilled work force to complement our state of the art technology,” the firm said in a statement in March 2012. “All of these factors went into choosing Indiana as an optimal location.”

But a closer look belies that claim, since Android Industries, in fact, laid plans for the Indiana expansion well before it became law in February 2012.

An official at the plant confirmed as much to a reporter last month.

“Right to Work has nothing do with us being here,” said Jeremy Urshel, listed as human resources generalist for the firm. Another official said the firm signed the contract with GM in November 2011.

Indeed, despite claims by Michigan Republican Gov. Rick Snyder that the policy is paving the way for “thousands” of new Indiana jobs, there is no clear evidence for that assertion.

Snyder has joined former Indiana GOP Gov. Mitch Daniels as a robust advocate for Right to Work labor standards now in place in 24 states. Michigan and Indiana are the first in the Midwest to adopt the measure, which says that employees cannot be compelled to pay union dues or so-called agency fees in a unionized shop.

Labor leaders and Democratic Party officials contend the Michigan law – signed by Snyder on Dec. 11 — is not about jobs growth, but rather is aimed at undercutting union membership, revenue and ultimately its political clout.

Promotion outruns results

In the meantime, officials at the Indiana Economic Development Agency have promoted it for nearly a year as an engine for growth, stating that some 90 companies said Right to Work would influence their decision “of where to locate current projects.” It withheld the names of all but a handful, though, citing confidentiality. Each of the firms cited was an Indiana one.

Daniels signed the Indiana statute on Feb. 1, 2012, its stipulations to apply to labor contracts signed after March 15. By Feb. 29, the IEDC already was claiming the measure was adding jobs to the state.

An official at this Fort Wayne plant operated by Michigan-based Android Industries states: “Right to Work has nothing to do with us being here.” (Bridge photo/Ted Roelofs)

In Michigan, Snyder repeated the IEDC figures and took them a step further as he suggested that firms outside the state were coming to Indiana because of Right to Work.

Snyder said that “90 companies in the pipeline for economic development say this was a factor in deciding to look to come to Indiana. That’s thousands of jobs. We need more and better jobs in Michigan.”

On Dec. 21, 2012, Snyder said the “phone’s already been ringing at the (Michigan Economic Development Corp.) since we passed that legislation. People are starting to look at Michigan.”

He said it would be “premature” to name firms.

In Indiana, though, the first firm cited as evidence Right to Work was paying off quickly backtracked on public statements from the IEDC.

“We are not a union shop. The effect that this was going to have was not going to affect our decision one way or another,” said Eric Holloway, president of MBC Group, whose company makes hard plastic packages for electronics such as cellphones and chargers. Its $4.1 million expansion in eastern Indiana is expected to create some 100 new jobs.

Officials at a suburban Indianapolis steel mill told Bridge Magazine an expansion there had nothing to do with Right to Work, despite a statement from IEDC suggesting otherwise.

“It was really not a factor,” said Barry Schneider of Steel Dynamics, Inc. “We are a non-union facility.”

Bridge contacted the IEDC several times to help identify a manufacturing operation whose plans had changed due to Right to Work, but IEDC did not identify such a firm.

Debate swirls around wage claims

And while political forces in Michigan continue to trade insistent claims and counterclaims over the issue, the impact of this labor measure on job growth and wages remains hard to pin down.

Labor says it will prevail, but RTW experts are skeptical

Political fallout from RTW deal yet to land

Right to Work is no guarantee of economic success

Michigan Democrats cite a study by the liberal-leaning Economic Policy Institute reporting that employees in Right to Work states earn $1,500 less annually than their counterparts in states without such laws.

The conservative Heritage Foundation cites studies it says proves that Right to Work policies create jobs while having little impact on wages.

A 1998 study by the University of Minnesota concluded that manufacturing growth in Sunbelt – and Right to Work – states had more to do with other business policies and other factors than RTW standards.

A 2011 joint academic study on two RTW states found evidence the policy led to increased manufacturing employment in Idaho, but no discernible effect on employment or wages in Oklahoma, a state that adopted RTW in 2001.

Gary Chaison, professor of labor relations at Clark University in Massachusetts, summed it up this way: “Very little is actually known about the impact of Right to Work laws.”

He added that “whether jobs grow in states with Right to Work laws, the answer is inconclusive despite the proclamations of pro- and anti-union forces.”

Ted Roelofs worked for the Grand Rapids Press for 30 years, where he covered everything from politics to social services to military affairs. He has earned numerous awards, including for work in Albania during the 1999 Kosovo refugee crisis.

6 comments from Bridge readers.Add mine!

  1. chesterm

    The little facts that our gov failed to include were that Android got tons of tax offsets, so basically the taxpayers of Indiana have subsidized these entities. And apparently the pay scale is in the 20,000 + range which doesn’t leave you with a lot of money to spend on non-necessities.

    1. Anne Grutza

      Pay scales in the 20,000 are not enough money to support a family. So this means the government has to subsidized people’s paycheck’s with food stamps, just like they have to do with the Wallmart workers, who work for a company who refuses to spread the wealth with it’s workers. And it will, as long as people continue to sell their soul to support this store, by shopping there!

  2. David Waymire

    “We are not a union shop. The effect that this was going to have was not going to affect our decision one way or another,” said Eric Holloway, president of MBC Group, whose company makes hard plastic packages for electronics such as cellphones and chargers. Its $4.1 million expansion in eastern Indiana is expected to create some 100 new jobs.

    Key item reporters need to start asking when pushed to cover these “job creation” events: What is the pay? Needs to be asked every time.

    1. Matt

      Yah we don’t want any low paying jobs! Everyone would be better off if these low paid folks stayed home and lived of gov’t assistance, EBC cards and their parents!

  3. Patti Kintz

    This is all about lowering wages, cutting benefits. Most people don’t like this so the wacks have to come up with these crazy ideas to appear as if they care about working people. They don’t. They care about lining their pockets and the pockets of their donors and that of big business. snydley cut business taxes and rasied taxes on the poor and middle class as soon as he go into office. That is what he cares about. And the so-called moderate republican reps who promised republican union members that they would never go along with this – well they fell in line. As anyone with a bit of smarts would have known was coming. They want the pension money and they want us to work at minimum wage. This way they make more profit.

  4. David Johnson

    Thank you, Ted, for maintaining the Bridge mission in providing an informative summary of this contemporary newsworthy topic. You, along with other REAL journalists on this site (vs. the preponderance of poorly credentialed bloggers that now flood conduits of news) are a valued “fourth branch of government”/”check” on our elected officials in helping us to become truly INFORMED citizens here in Michigan.

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