FORT WAYNE, Ind. -- In the weeks after “Right to Work” became law in Indiana, Michigan-based Android Industries was anointed a poster child for the job growth state officials predicted would flow from the measure.
Company officials insisted it was no accident they picked Indiana to open an automotive plant in suburban Fort Wayne in 2012. It supplies mounted tires for full-sized pickup trucks assembled at an adjacent General Motors plant.
"Recently, Indiana became a right-to-work state and offers us a competitive location and a skilled work force to complement our state of the art technology,” the firm said in a statement in March 2012. “All of these factors went into choosing Indiana as an optimal location."
But a closer look belies that claim, since Android Industries, in fact, laid plans for the Indiana expansion well before it became law in February 2012.
An official at the plant confirmed as much to a reporter last month.
“Right to Work has nothing do with us being here,” said Jeremy Urshel, listed as human resources generalist for the firm. Another official said the firm signed the contract with GM in November 2011.
Indeed, despite claims by Michigan Republican Gov. Rick Snyder that the policy is paving the way for “thousands” of new Indiana jobs, there is no clear evidence for that assertion.
Snyder has joined former Indiana GOP Gov. Mitch Daniels as a robust advocate for Right to Work labor standards now in place in 24 states. Michigan and Indiana are the first in the Midwest to adopt the measure, which says that employees cannot be compelled to pay union dues or so-called agency fees in a unionized shop.
Labor leaders and Democratic Party officials contend the Michigan law – signed by Snyder on Dec. 11 -- is not about jobs growth, but rather is aimed at undercutting union membership, revenue and ultimately its political clout.
Promotion outruns results
In the meantime, officials at the Indiana Economic Development Agency have promoted it for nearly a year as an engine for growth, stating that some 90 companies said Right to Work would influence their decision “of where to locate current projects.” It withheld the names of all but a handful, though, citing confidentiality. Each of the firms cited was an Indiana one.
Daniels signed the Indiana statute on Feb. 1, 2012, its stipulations to apply to labor contracts signed after March 15. By Feb. 29, the IEDC already was claiming the measure was adding jobs to the state.
In Michigan, Snyder repeated the IEDC figures and took them a step further as he suggested that firms outside the state were coming to Indiana because of Right to Work.
Snyder said that “90 companies in the pipeline for economic development say this was a factor in deciding to look to come to Indiana. That's thousands of jobs. We need more and better jobs in Michigan.”
On Dec. 21, 2012, Snyder said the “phone's already been ringing at the (Michigan Economic Development Corp.) since we passed that legislation. People are starting to look at Michigan."
He said it would be “premature” to name firms.
In Indiana, though, the first firm cited as evidence Right to Work was paying off quickly backtracked on public statements from the IEDC.
“We are not a union shop. The effect that this was going to have was not going to affect our decision one way or another,” said Eric Holloway, president of MBC Group, whose company makes hard plastic packages for electronics such as cellphones and chargers. Its $4.1 million expansion in eastern Indiana is expected to create some 100 new jobs.
Officials at a suburban Indianapolis steel mill told Bridge Magazine an expansion there had nothing to do with Right to Work, despite a statement from IEDC suggesting otherwise.
“It was really not a factor,” said Barry Schneider of Steel Dynamics, Inc. “We are a non-union facility.”
Bridge contacted the IEDC several times to help identify a manufacturing operation whose plans had changed due to Right to Work, but IEDC did not identify such a firm.
Debate swirls around wage claims
And while political forces in Michigan continue to trade insistent claims and counterclaims over the issue, the impact of this labor measure on job growth and wages remains hard to pin down.
Michigan Democrats 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 conservative Heritage Foundation cites studies it says proves that Right to Work policies create jobs while having little impact on wages.
A 1998 study by the University of Minnesota concluded that manufacturing growth in Sunbelt – and Right to Work – states had more to do with other business policies and other factors than RTW standards.
A 2011 joint academic study on two RTW states found evidence the policy led to increased manufacturing employment in Idaho, but no discernible effect on employment or wages in Oklahoma, a state that adopted RTW in 2001.
Gary Chaison, professor of labor relations at Clark University in Massachusetts, summed it up this way: "Very little is actually known about the impact of Right to Work laws.”
He added that “whether jobs grow in states with Right to Work laws, the answer is inconclusive despite the proclamations of pro- and anti-union forces.”