Paul Sancya/Associated Press
Paul Sancya/Associated Press
LANSING, Mich. – Michigan Gov. Rick Snyder says one reason he supports right-to-work legislation in Michigan is the economic boost a similar law has given Indiana, although officials have provided no conclusive evidence that the policy by itself has drawn new businesses to the state next door.
It’s an example of the flurry of claims supporters and opponents were making as the Michigan Legislature reconvened Tuesday and gave final approval to two right-to-work bills that have inspired fierce protests from powerful government unions and their Democratic allies, including President Barack Obama. Lansing authorities were bracing for an onslaught of demonstrators, increasing police presence and planning road closings and parking restrictions around the Capitol.
Snyder, a Republican who said repeatedly during his first two years in office that right-to-work wasn’t a priority for him, reversed course last week by endorsing bills that would prohibit requiring nonunion employees to pay unions for negotiating contracts and other services. Within hours, bills were rushed through the GOP-dominated House and Senate as Democrats angrily objected and chanting union activists clogged the hallways.
During a news conference explaining his decision, Snyder said he had been impressed by results in Indiana, another Rust Belt state and historical labor stronghold that enacted a right-to-work law earlier this year.
“They’ve had 90 companies in the pipeline for economic development that say this was a factor in deciding to look to come to Indiana,” he said. “That’s thousands of jobs. We need more and better jobs in Michigan.”
Spokeswoman Sara Wurfel said Snyder’s comment was based on information provided by the Indiana Economic Development Corp. She said the agency had reported that 67 of those prospective companies had “progressed to the pipeline stage.”
“Of these 67 companies, 31 companies have already accepted the IEDC’s offer, accounting for more than 3,700 projected new jobs and more than $431 million in investment,” Wurfel said in an email, referring to information provided by the Indiana agency.
It was unclear what was meant by “the pipeline stage” or “the IEDC’s offer.” Katelyn Hancock, spokeswoman for the Indiana agency, told The Associated Press that “90 companies have communicated to the IEDC that Indiana’s enactment of right-to-work will factor into their decision-making process of where to locate current projects.”
Hancock said, “Out of respect for companies, all discussions are confidential until we have completed negotiations and have a final acceptance from them.”
Indiana has made a number of business relocation and expansion announcements this year in which company executives have identified the right-to-work law as one reason behind decisions. Whayne Supply Co., a distributor of heavy construction and earth-moving equipment, said in May it was boosting operations in Evansville, creating up to 50 jobs. President and CEO Monty Boyd mentioned the law along with Indiana’s “outstanding infrastructure, talented workforce and recent legislation to lower taxes.”
But the president of another business, MBC Group, said the Indiana agency had incorrectly reported that its planned expansion resulted from the right-to-work law.
Meanwhile, opponents of right-to-work laws contend they push wages and benefits lower. Michigan Democrats frequently cite a study by the liberal-leaning Economic Policy Institute reporting that employees in right-to-work states earn $1,500 less annually than their counterparts in states without such laws.
The Economic Policy Institute acknowledged it is “notoriously difficult” to evaluate the effects of a single state policy, but said its wage analysis was controlled for more than 40 different factors such as age, race and education.
The conservative Mackinac Center for Public Policy in Michigan says compensation in right-to-work states can be even higher than elsewhere when costs of living are considered. A study by the Indiana Chamber of Commerce found personal income grew more in right-to-work states than those with no right-to-work laws between 1977 and 2008.
“Very little is actually known about the impact of right-to-work laws,” Gary Chaison, a professor of labor relations at Clark University in Massachusetts, said Monday. “There’s a lot of assumptions that they create or destroy jobs, but the correlation is not definite.”
Democrats contend the disagreement about such questions is one reason why the Legislature should allow further consideration, although Republicans say the issue is long-standing and the viewpoints clear.