The Indiana General Assembly would do the state a service by NOT bringing right-to-work legislation up for a vote. This is contrary to the position of the governor and the Republican leaders who see a political opportunity to stomp on unions that tend to support Democrats.
Instead, the General Assembly should spend its time authorizing the administration to designate how the “Star Spangled Banner” should be sung. You laugh? That is an actual proposal from a legislator who believes in limited government, except when it comes to our national anthem.
What are the arguments for right-to-work? First, workers in places where there is a union contract would not be required to pay union dues. The union would still be required to negotiate on behalf of all workers. Non-dues-paying workers would benefit from whatever success the union has in those negotiations. It’s a classic case of representation without taxation.
Second, supporters of right-to-work claim that states with right-to-work laws do better in job and income growth than states without right-to-work. This claim is based on questionable research and fallacious assumptions. But on this faulty limb, the administration rests its argument that Indiana is losing out on opportunities to attract new businesses.
Why do businesses locate where they do? Ultimately it comes down to the net revenue to be obtained when located in one place versus another. If Indiana has the lowest costs of doing business among its competitor states and the best location for maximizing revenues, firms will locate here whether or not we have right-to-work legislation.
Our state is well-known for having low taxes for businesses.
We also excel in denying adequate workmen’s compensation and enjoy stingy unemployment benefits. We eliminated the inventory tax as an economic development measure while raising the tax burden of households. The cadre of promoters who shill for the state are quick to point out these benefits to firms considering a Midwest location.
Our ever-eager promoters dream of being surrounded by states without a right-to-work law.
They imagine a flood of businesses leaving Michigan, Ohio, Illinois and even Kentucky to enjoy lower wages and more control over working conditions in right-to-work Indiana.
Right-to-work is associated with lower wages, fewer benefits and less employee influence over working conditions. Indiana has already told its school employees from teachers to janitors that they can have a union to represent them on matter of wages but not working conditions. Right-to-work might drive unions into giving up their concern for working conditions in order to concentrate on wages.
Business sees union influence on working conditions as a denial of the firm’s prerogative to have unmitigated control over the work place. Unions have challenged the misuse of this power. In some cases, however, unions have created and perpetuated work rules that lead to grotesque inefficiencies. Ever try to discipline or fire a useless or disruptive union worker?
Should Indiana favor lower wages for workers? Should Indiana favor unilateral control of the workplace by employers? Most Hoosiers would say NO, if they thought about it. But mention unions as the countervailing force to business power and hackles rise on the Hoosier neck. Despite the fact that many Hoosiers are union members and many others benefit from their favorable wages, Indiana is at heart anti-union.
Why? The answer probably lies back in the 19th and early 20th centuries when we were an agricultural state with strong anti-immigrant sentiments. As industry moved in, so did foreign-born citizens. Both were resented by native-born workers of the land.
In effect, the right-to-work issue is more than complex economics. It is a cultural matter where sentiments ride as high as they do about Eastern versus Central time. The legislature should let well-enough alone.
Morton Marcus is an independent economist, speaker, and writer formerly with IU’s Kelley School of Business.
Business
EYE ON THE PIE: Right-to-work is the wrong way to go in Indiana
- Business
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- RESTAURANT INSPECTIONS: May 21, 2012
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EYE ON THE PIE: Use to be close tie between output, employment
Crusty Crawford joined our lunch table with a pronouncement. “We’ve always assumed a close tie between output and employment,” he said. No one responded.
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Employer opinions sought on students
A joint venture between Ready Indiana and the Indiana Department of Education is seeking employer input that will impact how Hoosier high school students are equipped for the workforce.
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Carlisle prison marks 20th anniversary
2012 marks the 20th year of service for the Wabash Valley Correctional Facility, going on line with its first offenders Dec. 10, 1992.
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SOCIAL SECURITY: Why young workers should care about Social Security
Summer will be here before we know it.
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BUSINESS CENTS: Does your staff understand pricing?
Many companies feel as though their staff will follow instructions and implement price strategies as instructed.
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Valley Child Development Center receives grant
Valley Child Development Center has been awarded a $5,000 grant from the Terre Haute Day Nursery Foundation through the Wabash Valley Community Foundation.
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Exec offers advice on becoming startup entrepreneur
Sam Clemens, chief product officer of Cambridge, Mass., startup company Insight Squared, gave Rose-Hulman Institute of Technology students insight on how to develop a startup business.
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Newsmakers: May 20, 2012
Leland Phipps, family practice physician at Paris Community Hospital/Family Medical Center, has been re-elected to membership with the American Academy of Family Physicians.
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Alumna to serve as VP for Rose-Hulman Ventures
Rose-Hulman Institute of Technology alumna Elizabeth M. Hagerman is returning to her alma mater to serve as vice president for Rose-Hulman Ventures, the institute’s successful innovation space that has spawned careers and entrepreneurial enterprises throughout Indiana.
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Summer Sidewalk Sale set
Marshall Main Street’s Downtown Summer Sidewalk Sale is planned from 8 a.m. to 2 p.m. June 9.
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Oil drops to lowest level in 6 months
The price of oil dropped to a six-month low Tuesday on concern that economic uncertainty in Europe could hurt demand for crude.
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Adidas initiative: ISU students develop business improvement process at facility
As Indiana State University students cruised Interstate 70 on Friday afternoons from Terre Haute to Indianapolis, they were looking forward to reaching their destination.
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BUSINESS BRIEFLY: May 13, 2012
An evening of networking and education for Clark, Crawford and Edgar counties regarding branding, marketing and tourism development opportunities is planned for 6:30 p.m. May 21 at the Heath Museum on the square in downtown Robinson.
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Wendy’s partners with Riley Hospital
For just $2, customers at participating Wendy’s restaurants in the Evansville/Terre Haute area can get free Jr. Frosty desserts through Dec. 31 while supporting Riley Hospital for Children at Indiana University Health.
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Marshall Chamber to stage annual golf outing
The Marshall (Ill.) Chamber of Commerce invites golfers to its annual golf outing scheduled for June 8 at the Marshall Golf Course.
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ON THE MOVE: May 13, 2012
McKenze Rogers has joined Williams Randall as an account supervisor.
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Seminar teaches seniors to fight fraud
The Federal Trade Commission estimates that 25 million Americans are victims of consumer fraud each year.
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EYE ON THE PIE: Economic tools for consumers, workers, business owners, officials
My friend is a carpenter. He has two heavy boxes of tools and several other containers with stuff.
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SOCIAL SECURITY: Potential Medicare savings for mom
Given the current economic climate, buying a nice gift for Mother’s Day may be more difficult than in years past.
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‘Best Places to Work’ honored at banquet
Companies raising the bar with their workplace practices were recognized on May 3 at the Indiana Roof Ballroom by the Indiana Chamber of Commerce.
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NEWSMAKERS: May 13, 2012
Susi Willis, CPA and partner in Larsson Woodyard & Henson, LLP, was recently presented with the Distinguished Service Award by the Indiana CPA Society at its annual CPA Celebration at the Indiana Roof Ballroom in Indianapolis.
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Indiana Rail Road wins Family-Friendly Award
The Indiana Rail Road Co. has won the Terre Haute Chamber of Commerce’s “Family-Friendly Business Award” for 2012 based on the company’s highly successful employee wellness program.
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Government cuts summer gasoline price forecast
The government says gasoline will be cheaper this summer than previously expected thanks to a drop in the price of oil.
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Mall operator becomes biggest real estate company
The nation’s largest shopping mall operator is now also the country’s largest real estate company.
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Dealership to celebrate first year
The 500 Automotive Group in Clinton will celebrate its first year in business with an big birthday bash at the dealership on Friday and Saturday.
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EYE ON THE PIE: Compensation levels did not cause the recession
America is still fascinated with “The Price is Right.”
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Old National begins year with strong first quarter
Old National Bancorp reported 1st quarter net income of $21.7 million, or $0.23 per share.
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Enroll in disaster preparedness class
The University of Illinois Extension is offering a disaster preparedness course on May 23 for Clark, Crawford and Edgar county businesses called Ready Business.
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Newsmakers: May 6, 2012
• Dr. Haytham Mansour
• Terre Haute Regional Hospital
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