Study: Right-to-work won't boost Indiana manufacturing jobs, wages - nwitimes.com

INDIANAPOLIS | An Indiana right-to-work law is not likely to increase the number of manufacturing jobs in the state, according to a new study by Ball State University.

Michael Hicks, director of the Center for Business and Economic Research, examined whether the existence of a right-to-work law in the 48 contiguous states and Washington, D.C., led to changes in a state's industrial composition and manufacturing wages between 1929 and 2006.

"In no model were estimates statistically meaningful, so RTW (right-to-work) legislation does not affect the size of the manufacturing share, inflation-adjusted wages for manufacturing workers, employment in manufacturing nor worker wage rates," Hicks writes.

Hicks separately assessed the effect of changes in a state's right-to-work law.

He found most states grew their inflation-adjusted manufacturing income after enacting right-to-work, but Iowa, the right-to-work state most similar to Indiana, and South Carolina saw their manufacturing incomes decline under right-to-work.

That result suggests factors other than right-to-work play a more significant role in determining the size of a state's manufacturing industry, and that as states become more business-friendly the benefits of a right-to-work law have less of an effect, Hicks writes.

Most site selection publications and CEO surveys rank Indiana as among the most business friendly states in the nation.

Indiana's proposed right-to-work law would prohibit a business and a union from agreeing to charge fees to nonunion employees for union services they receive. Right-to-work does not guarantee anyone a job.

Supporters of right-to-work, including Republican Gov. Mitch Daniels, don't claim the labor policy will get all Hoosiers working but will simply be another tool to lure companies to Indiana.

Democrats point to other studies showing that when researchers include all workplaces, not just manufacturing as in the Ball State study, a right-to-work law reduces wages and benefits for union and nonunion employees by as much as $1,500 a year.

Hicks said his study shouldn't be interpreted as a call for or against right-to-work in Indiana, but based on the outcome in other states, the legislation "is not likely to have an effect on the manufacturing industry in Indiana."