Indiana becomes right-to-work state

Adriene Hill Feb 2, 2012

Adriene Hill: Indiana is on its way to becoming a right-to-work state, which means basically that workers can’t be forced to join a union in order to get or keep a job.

For more, we go to Timothy Slaper. He’s director of economic analysis with the Kelley School of Business at Indiana University. Good morning.

Timothy Slaper: Good morning.

Hill: Why does it matter that Indiana’s becoming a right-to-work state?

Slaper: The reason why Indiana chose to go forward with it is that our state is very dependent upon a lot of out-of-state investment to create jobs. And the Indiana Economic Development Corporation has tried to negotiate sometimes with companies, and some companies just won’t talk to them if we did not have right-to-work legislation in place.

Hill: So do you think the supporters of this are right, that this will help bring jobs to Indiana?

Slaper: I think it would further solidify Indiana’s position as a good place to invest in. The governor has spent a lot of energy and a lot of time trying to build a better sandbox, and I think this just moves us perhaps into that category of the best sandbox to conduct business.

Hill: Now, opponents say that this could lead to a decline in pay-over time or declining working conditions. Has that happened in other right-to-work states?

Slaper: The research on that shows that there has been very marginal differences in wages — in other words, the results are ambiguous. We haven’t seen across the board studies that say time and time again, that wages have fallen for those in the state.

Hill: What does this tell us about the strength of unions in the Midwest?

Slaper: I think it shows that they’re on the relative decline. I mean, unionization rates have fallen considerably over time. For one, because manufacturing as a share of the economy has declined considerably. Now that having been said, in the Midwest, unions still hold a whole lot of sway, because they’re heavily involved in the auto sector, for example.

Hill: Timothy Slaper is director of economic analysis with the Kelley School of Business at Indiana University. Thanks.

Slaper: Thank you.

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