New Right to Work Law Appears to Be Boosting Employee Compensation in Indiana
Pennsylvania union militants are trying to fire up opposition to Right to Work in the Keystone State by vociferously claiming that banning forced union dues and fees would somehow cut employee compensation. But the experience of Indiana, which became the 23rd Right to Work state early last year, is already belying that Big Labor claim. Image: Rick Smith Show/Flickr/Creative Commons
It was just 15 months ago that Indiana legislators approved, and then-Gov. Mitch Daniels signed into law, a measuring prohibiting the termination of private-sector Hoosier employees for refusal to pay dues or fees to an unwanted union.
Big Labor bosses melodramatically proclaimed it was a dark day for Indiana. Passage of the 23rd state Right to Work law would somehow, they insisted, result in smaller paychecks.
But now annual data for 2012 are in, and they show Indiana is moving in the opposite direction from what the union brass predicted. Inflation-adjusted U.S. Commerce Department data show that private-sector compensation (including wages, salaries, benefits and bonuses) in the Hoosier State grew by roughly 2.9% last year. That’s a substantially greater increase than in any of the six remaining forced-unionism states in the Midwest. (Michigan, whose Right to Work law was adopted in December 2012, but didn’t take effect until last month, is counted as forced-unionism here.) In fact, in the entire Midwest, only North Dakota, which is in the middle of an extraordinary oil- and natural gas-drilling boom, had 2012 compensation growth greater than Indiana’s.
Right to Work Indiana’s 2012 private-sector compensation growth was greater than in 42 of the 49 other states nationwide. Yet from 2001 to 2011, forced-unionism Indiana’s private-sector compensation growth lagged far behind the national average. On average, real private-sector compensation increased by 14.3% in Right to Work states from 2002 to 2012, nearly triple the 5.4% aggregate increase for forced-unionism states. (Since its status switched in 2012, Indiana is excluded from this comparison. Michigan is counted as a forced-unionism state.)
Pennsylvania union militants staged a rally in Chambersburg on Saturday to pressure Keystone State legislators meeting in nearby Harrisburg not to emulate their counterparts in Indiana and Michigan. (See the link above for a news account.) Union bosses at the rally made predictions about Right to Work’s economic impact that were remarkably similar to the apocalyptic claims made by Hoosier union bosses in 2011 and early 2012.
Apparently, Big Labor is hoping that elected officials and ordinary citizens in Pennsylvania won’t notice that its Indiana forecast is turning out to be all wrong. Previously, union bosses made ludicrously false predictions about the economic impact of the Right to Work law Oklahoma approved in 2001 and the Right to Work law Idaho voters upheld in 1986. Maybe it’s time for union officials to give up the prognostication game.