INDIANAPOLIS | Facts, figures and opinions abounded Tuesday as a legislative committee took testimony on whether a "right-to-work" law would lure businesses to Indiana or reduce the incomes of Hoosiers.
Under right-to-work, employees at a union workplace who don't join the union can't be made to pay "fair share" fees for collective bargaining services, even though the union typically negotiates one contract that applies to members and nonmembers.
Mitch Roob, chairman of the Indiana Economic Development Corp., said without right-to-work, Indiana is less attractive to relocating companies because they prefer to deal with the weaker or nonexistent unions in the 22 right-to-work states.
"Right-to-work is not a silver bullet that will solve all of our employment problems," Roob said. "But a right-to-work law will make Indiana more competitive in the national and international marketplace."
In response, a skeptical state Sen. Karen Tallian, D-Ogden Dunes, pointed out Fronius USA recently chose to locate its solar power inverter factory in Portage because of the region's educated work force, nearby suppliers and transportation infrastructure, and not for anything to do with right-to-work.
Richard Vedder, an economics professor at Ohio University, said his research -- paid for by the Indiana Chamber of Commerce, a business group that supports right-to-work -- shows states with right-to-work have, on average, better income growth, economic output and job opportunities; growing populations and a higher quality of life.
But University of Oregon political science professor Gordon Lafer said Vedder is attributing far too much to a relatively minor labor policy whose real effect -- and the reason it's supported by businesses -- is reduced employee wages.
"When unions are undermined and decreased due to right-to-work laws, that results in lower wages and benefits for everybody," Lafer said.
His analysis shows both union and nonunion workers in right-to-work states earn on average $1,500 less per year and receive fewer employer-paid benefits.
State Rep. Jerry Torr, R-Carmel, wasn't convinced, saying he wouldn't support right-to-work if he believed it reduced incomes.
In February, Torr won House committee approval for a right-to-work plan that ultimately led House Democrats to relocate to Illinois for six weeks to kill the measure.
State Sen. Jim Arnold, D-LaPorte, said he doesn't understand the demand for a right-to-work law as the existing system "seems to be working just fine."