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'Right-to-work' future hazy for Pa.

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Pennsylvania just might become the scene of the next fight over how much influence unions have.

Last week, Republican legislators proposed a set of bills that would make Pennsylvania the 25th so-called right-to-work state.

Emboldened by the victories for similar legislation in Michigan and Indiana in 2012, state legislators and right-to-work proponents said the measures would make Pennsylvania more competitive in business and give workers a choice in workplace representation.

However, the immediate impact of right-to-work on the economy is tenuous, as is whether Pennsylvania is willing to go down that route, according to some statistics and workforce experts.

Economics of choice

"It makes good economic sense," Kevin Shivers, the state director for the National Federation of Independent Business, said about right-to-work during the bills' unveiling Jan. 22 at the Capitol.

While right-to-work proponents largely kept to the issue of worker choice in union representation, they also spoke of economic benefits, holding up investment and growth in Indiana as a model for Pennsylvania. Indiana became right-to-work in February 2012.

Pennsylvania could see the same type of business flood, they said.

Indiana's success with right-to-work also was the reasoning from proponents in Michigan, too.

In 2012, Indiana received commitments from 256 companies to create 27,600 new jobs, a record and about 8,500 more jobs than in 2011, according to a Jan. 4 statement from the Indiana Economic Development Corp. Driven by companies such as Toyota and Amazon.com, the commitments include $6.4 billion in capital investment.

"From its falling corporate tax rate and recently enacted right-to-work legislation to its overall fiscal stability, these results are proof that companies find Indiana one of the most attractive places to create jobs," Dan Hasler, Indiana secretary of commerce and CEO of the IEDC, said in a statement.

However, Indiana's employment figures don't illustrate a windfall over the past year. Employment shrank 1 percent from December 2011, the workforce is 1.7 percent smaller, and its 8.2 percent unemployment is higher than the national average, according to the Indiana Department of Workforce Development.

The number of people on Indiana's unemployment rolls did drop by 9.3 percent since December 2011 and the unemployment rate is down from 8.9 percent, according to the department.

Since passing right-to-work, companies have created about 5,000 jobs and pumped $500 million into Indiana's economy, said Matt Wagner, director of communication and legislation with Cumberland County-based Pennsylvanians for Right to Work Inc.

"I would say that's a significant boost to their economy, especially given the general economy's slow pace over the years," he said.

The largest benefit is the long-term investment that could mean more jobs in Pennsylvania, said Charles E. Greenawalt II, senior fellow of the Susquehanna Valley Center for Public Policy, a conservative Dauphin County-based think tank, and a professor of public policy and government at Millersville University.

He's seen that investment first hand. In the late 1980s, Greenawalt was the director of economic development for Green County, Va. That state has been right-to-work since 1947. Combined with lower wages and less regulation, companies were moving there constantly, Greenawalt said.

"I think (right-to-work) would improve the appeal that Pennsylvania would have for manufacturers and other companies," Greenawalt said.

With labor laws, there's always a trade-off, said Ray Gibney, an assistant professor of management in Penn State Harrisburg's Business Administration Department.

"It's a trade-off between wages and numbers of those employed," he said.

Wages can be 15 percent higher at unionized companies, and that has to be absorbed somehow, he said. That could mean the company doesn't hire as many workers or doesn't invest as much in its physical infrastructure.

In right-to-work states, wages might be lower but so is unemployment, Gibney said.

Union response?

Union response to the latest proposals has been muted. The Business Journal contacted five unions, and only one gave a response. The Teamsters; state council of the Service Employees International Union; the state's office of American Federation of State, County and Municipal Employees; and the Greater Pennsylvania Regional Council of Carpenters did not respond to requests for comment.

The unions are likely developing a strategy on how to rally and counter the proposals, Gibney said.

Rick Bloomingdale, president of the Pennsylvania AFL-CIO, said the benefits of right-to-work are unproven, and it's designed to tilt the rules at the expense of workers by killing collective bargaining power.

He pointed to right-to-work states that have high unemployment, lower rates of educational attainment and more health care issues.

Right-to-work states such as Georgia, Mississippi, South Carolina and North Carolina have unemployment above 8 percent, according to the U.S. Bureau of Labor Statistics.

But that doesn't account for right-to-work states such as Texas, Virginia and Oklahoma, where unemployment is at or below 6 percent.

Unpaid representation is an issue, too, Bloomingdale said.

"When someone goes to work for a unionized company, they know it's unionized, they know they have to pay dues, and they get all the benefits of those rights," he said. "People want these benefits, but they don't want to pay for them."

Overall, he said, right-to-work legislation weakens workers' voices in the workplace.

"We're going to fight because we see what it is: an effort to put workers in the poorhouse," Bloomingdale said. "We're going to fight with every fiber of our being."

Stephen Herzenberg, executive director of the Harrisburg-based liberal think tank Keystone Research Center, called right-to-work legislation "right to work for less."

Such laws place downward pressure on wages and prevent upward mobility of workers, he said.

"It's a misguided step backward, and I hope the Pennsylvania legislature has the wisdom to not go down that path," Herzenberg said.

The road not yet traveled

Pennsylvania isn't likely to follow Michigan and Indiana into right-to-work, Gibney said.

Pennsylvania has more union members and a longer history of union activity than Michigan, he said. That means legislators from both parties have districts with a lot of union voters, and they court that support for elections.

However, Republicans control both houses of the General Assembly and the governor's office, and many favor right-to-work, he said.

House Majority Leader Mike Turzai's office did not respond to calls for comment, nor did Gov. Tom Corbett's office.

Where right-to-work stands in leadership priorities is unclear. Corbett previously said he didn't think it was the right time for it but would sign it if it reached his desk.

"From a legislative standpoint, this is just about the best environment you could have for something like (right-to-work)," Gibney said.

If observers are skeptical based on past experience, proponents are optimistic.

Legislative right-to-work sponsors were all re-elected, and some polls suggest more than 70 percent of Pennsylvanians favor such legislation, Wagner said.

"This is obviously something that the people want," he said.

The proposals

Here are the bills being proposed as part of a package aimed at making Pennsylvania a right-to-work state:

House Bill 50, sponsored by Rep. Daryl Metcalfe (R, Butler County), would end union membership or dues payment by nonmembers as a condition of employment.

House Bill 51, sponsored by Rep. Kathy Rapp (R, Warren, Forest, McKean counties), would prohibit unions from collecting dues from non-union public school employees.

House Bill 52, sponsored by Rep. Fred Keller (R, Union and Snyder counties), would prohibit unions from collecting dues from non-union state employees.

House Bill 53, sponsored by Rep. Jim Cox (R, Berks County), would prohibit unions from collecting dues from non-union local government employees.

Jim T. Ryan

Jim T. Ryan

Jim T. Ryan covers Cumberland County, manufacturing, distribution, transportation and logistics. Have a tip or question for him? Email him at jimr@cpbj.com. Follow him on Twitter, @JimTRyanCPBJ.

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