Is Indiana’s rosy economic outlook due to right-to-work?

As its neighbor to the north passes similar legislation, the results in Indiana are unclear.

December 11, 2012

As the state of Michigan passes right to work legislation, some in Indiana are remembering their own struggle nearly a year ago. And depending on who you ask, the results are mixed.

“We haven’t felt the full effect of it here in Indiana because of the way it was implemented,” said Jeff Harris, spokesman for the AFL-CIO of Indiana.

Indiana Gov. Mitch Daniels signed the right to work law without much fanfare on Feb. 1 in the days leading up to Indianapolis hosting the Super Bowl.

Daniels signed the bill quickly after its passage by the Republican-controlled Indiana General Assembly to avoid huge pro-labor demonstrations during the big game.

But pro-union forces representing workers in industry, manufacturing and education arrived in Indianapolis in big numbers to prevent the state from becoming the first Rust Belt state with right-to-work laws.

The legislation prohibits union membership as a condition of employment. Republicans touted the measure as a way to attract businesses to Indiana, but Democrats saw it as a tactic to weaken campaign contributions from unions.

And since the law didn’t become active until March, measuring its success is difficult.

“The law didn’t void existing contracts so the vast majority of union workers are still under contracts that once their natural end comes then they’ll face the new reality of negotiating wages and working conditions under a right-to-work environment,” Harris said. “I do know of a few union members who drove up there (Michigan) to offer support for what was going on against right to work."

In Michigan, Republican Gov. Rick Snyder points to Indiana’s addition of 43,000 jobs this year as part of his basis for approving right-to-work legislation there.

Snyder’s office also contends that up to 90 companies have expressed interest in moving to Indiana since right-to-work was adopted.

But Harris says that’s not entirely accurate.

“What we’ve experienced since in Indiana, and why I think people in Michigan need to look out for, is how the administration will try to sell everything, every economic development project and give the credit to right-to-work,” Harris said.

On Tuesday, Daniels lauded the news of nine companies planning to make investments that will add nearly 3,000 new jobs in the coming years.

He says Indiana is having a record-breaking year of economic development.

According to the U.S. Labor Department, Indiana ranked second in the country for private sector jobs added over the past month and is fifth for job growth over the past year. Since its low point of employment in July 2009, Indiana's private sector job growth (6.6 percent) is nearly double the national numbers (3.8 percent).

And the Indiana Economic Development Corporation reports 251 companies will expand or establish operations in Indiana, resulting in $6.5 billion and nearly 28,000 new jobs in coming years.

"We've added jobs at nearly twice the national average for the past three years, but we have seen a significant surge of new interest in the past several months," Daniels said in a statement. "The best holiday gifts the state could receive are these jobs but today's bundle is not the last for this year. Stand by for more."

However, Daniels didn't say if the rosy job picture is the result of right to work.

“Companies come here (Indiana) for many reasons,” Daniels’ spokeswoman Jane Jankowksi said.