Judge John Sedia of the Lake County Superior Court struck down Indiana’s right-to work law as unconstitutional Monday, a decision hailed by organized labor as a step toward repealing legislation many believe curbs the collective bargaining rights for unions. Indiana became the 23rd right-to work state in February 2012 when Gov. Mitch Daniels (R) signed the bill into law.
The bill sparked protests in a traditionally strong union state that has roughly 269,000 union workers, according to the U.S. Bureau of Labor Statistics. Unions are now celebrating the decision, hoping that it will be upheld by the State Supreme Court.
“The right-to-work law took effect earlier this year. Right now we are just beginning to see some of the impacts, the lack of collective bargaining and lack of workplace protections. Those proponents of the law billed this as a magic bullet, saying unemployment would go down. Unfortunately we see the alternative,” said Jeff Harris, a spokesperson for the Indiana State AFL-CIO, in a statement to Mint Press News.
Not the final say…
WXIN-TV reports Judge Sedia’s ruling found that a provision in the law requiring unions to represent workers who do not pay union dues violates the state constitution.
“There is no court which is more loathe to declare any state statute unconstitutional than this one,” Sedia wrote in his ruling.
The ruling was applauded by the the International Union of Operating Engineers Local 150 and the six individuals who launched the challenge shortly after the law was signed into law. Other unions not directly involved in the action have expressed their support as well.
“Companies continued to leave Indiana, personal incomes fell — this type of downward spiral isn’t solely because of right-to work, but it is going to make matters worse,” Harris said.
Republicans are not surrendering the battle just yet. Indiana Attorney General Greg Zoeller (R) reportedly will appeal the decision, meaning that the law will remain in place and will only be repealed if the Supreme Court upholds the lower court’s decision in its ruling.
Right-to-work supporters are confident that the law will be upheld when it is heard by the state Supreme Court. “This is not unexpected in Lake County. I’m sure they went forum shopping when they filed the suit,” said Rep. Jerry Torr (R-Carmel) in a statement to the Indianapolis Star. “I am confident that this decision won’t stand.”
Free rider problem
Labor leaders believe that the Indiana Constitution is on their side. The state constitution prohibits citizens from receiving services without paying for them. Union leaders say that at the core of right to work laws is a “free rider” problem allowing workers to opt out of paying union dues.
Here’s how it works. Collective bargaining almost always guarantees that workers will enjoy higher wages and superior benefits. According to the Economic Policy Institute, union workers are paid 13.6 percent more on average, and are 28.2 percent more likely to have employer-paid health insurance compared with non-union workers. Union leaders and negotiators are paid to secure these contracts for their dues-paying members.
By giving workers the right to opt out of paying dues that allow unions to negotiate for higher wages, individuals can be “free riders” who enjoy the benefits that others essentially have paid for. Unions, in turn, are weakened because they have less money at their disposal to fight for better contracts.
“Right-to work allows individuals to get a service that others pay for, for free. It forces dues paying union members to represent people who are not paying their fair share. If you can get something for nothing, more and more people will take that option. It’s a way to drain unions of their resources,” Harris said.
“It’s like if you said that the part of your taxes that pays for the fire department is now optional. You don’t have to be anti-fire department but when someone tells you that part of your taxes are optional some people will stop paying. Any organization would become financially unviable in that situation,” said Gordon Lafer, professor of political science and labor studies at the University of Oregon, in a statement to Mint Press News.
Fighting against right-to-work
What do right-to-work supporters say in support of this legislation? “Right-to-work laws reduce the financial benefit from organizing workplaces where unions have limited support. This makes unions less aggressive and encourages business investment, creating jobs. States can and should reduce unemployment by becoming right-to-work states,” writes James Shirk, a senior policy analyst for the Heritage Foundation.
Using economic data from states with right-to work laws, a 2011 study by EPI shows that right-to work laws often lead to lower wages and decreased employer benefits.
“Right to work laws lower wages for union and nonunion workers by an average of $1,500 a year and decrease the likelihood employees will get health insurance or pensions through their jobs, writes Gordon Lafer, an economist at EPI in Washington D.C. “By lowering compensation, they have the indirect effect of undermining consumer spending, which threatens economic growth. For every $1 million in wage cuts to workers, $850,000 less is spent in the economy, which translates into a loss of six jobs.”
In Wisconsin, a state that has had right-to-work legislation since 2011, there has been a sharp decline in job creation, wages and economic outlook.
Despite promising to create 250,000 new jobs, Wisconsin has fallen from 11th to 44th place in job creation rankings of states during the time that Gov. Scott Walker (R) has been in office. Wisconsin’s wages are also declining at twice the national level, according to a report by the Milwaukee Journal Sentinel.
“If you look at other right-to-work states, there are higher rates of workplace safety violations, more workplace deaths, lower wages, all sorts of economic indicators have been turned upside down,” Harris said. “It’s why we are pleased with this court’s decision.”