Indiana’s Republican lawmakers have no holiday surprise in store for Hoosiers. Their very public wish list for 2012 is topped by a right-to-work bill, and the contentious debate ahead ensures it will be the defining issue for the upcoming session.

Republican lawmakers have made no secret of their intention to make Indiana the 23rd right-to-work state. And on the other side, labor representatives have made it clear they will fight to prevent it. Their protests already have stirred interim study committee debate and the legislature’s Organization Day. Laborers will greet lawmakers with another protest on Jan. 4.

Senate President Pro Tem David Long, R-Fort Wayne, says the issue isn’t about busting unions.

“It’s about the cold, hard reality of jobs, and the fact that Indiana is losing too many opportunities to bring more jobs to our state because we do not have a right-to-work law,” he says in a commentary on Page 12A.

But State Rep. Win Moses, D-Fort Wayne, said the issue wasn’t as simple as jobs.

“It is a complex issue that many people don’t understand,” he said, “The term ‘right to work’ confuses them because they think they ought to be able to do that. But when you explain that wages are essentially established at union levels and go down from there, then the light goes on.”

The supporters’ case

A right-to-work law doesn’t guarantee anyone a job; instead it prohibits union membership and dues payment as a condition of employment. Supporters insist a union shop rule, which requires all employees to pay dues if they are covered by a collective bargaining agreement, is a deterrent to job creation.

Gov. Mitch Daniels issued a statement in support of a right-to-work bill on Thursday. The Indiana Chamber of Commerce has made the issue its top legislative priority, as have the Greater Fort Wayne Chamber of Commerce and the Regional Chamber of Northeast Indiana.

John Sampson, president and CEO of the Northeast Indiana Regional Partnership, told the audience at a legislative preview conference in Indianapolis last week that officials in the 10-county region feel so strongly about the advantage of right-to-work status they they’ve offered to serve as a pilot region “if this doesn’t go right for the state.” He cited northeast Indiana’s 30-year decline in per-capita income.

Sampson even suggested that the issue was so important that it was “worth a non-civil discussion” in the upcoming session.

The Indiana Economic Development Corp., the state’s lead economic development agency, adopted a resolution supporting a right-to-work bill last week. A spokeswoman for the IEDC cited Remy International when asked to name a company that would choose a right-to-work state over Indiana.

John Weber, Remy’s president and CEO, confirmed that was the case.

“You would never say never, but it would be very hard to see a set of circumstances that would overcome that when there are alternatives that are not far away that offer the same amenities, that would offer the same tax environment.” he said. “To us, frankly this is not pro- or con-union; it’s about our employees’ right to choose. Why would we impose that on them?”

Remy has operations across the globe, including plants in China, Brazil, Hungary and the United Kingdom. Its U.S. operations include plants in Oklahoma, Mississippi and Virginia, as well as Anderson and Peru, Ind.

Weber, who once worked at General Electric in Fort Wayne, said he would like to consider Indiana for a large plant Remy is planning to open, but wouldn’t “until we get this fixed.”

“I’m not from Indiana, but I’m a fan of Indiana. I think it’s a terrific place to do business. The governor has done a fabulous job. … It’s a great place for our employees to live, and I would love to have the opportunity to invest further in the state, but that’s a barrier.”

Opposing views

Not everyone agrees. Labor unions constitute the loudest voice against right-to-work, of course. They insist its passage will drive down wages and benefits, and there’s evidence supporting their case. A February study by the Economic Policy Institute, controlling for demographic and socioeconomic variables, found that wages in right-to-work states were 3.2 percent lower than in non-right-to-work states. The average full-time, full-year worker in a right-to-work state earns about $1,500 less annually. EPI is a left-leaning institute generally favorable to organized labor but is well-respected for the reliability of its research.

Likewise, the rate of employer-sponsored health insurance is 2.6 percent lower in right-to-work states, according to the study, and employer-sponsored pensions are 4.8 percentage points lower there.

Union officials also point to unemployment rates, noting that right-to-work states have fared generally the same as other states during the economic downturn. Seven of the 10 states with the highest unemployment rates in June were right-to-work states, according to the U.S. Bureau of Labor, including Nevada, with an unemployment rate of 12.4 percent.

Nancy Guyott, president of the Indiana State AFL-CIO, noted Thursday that Indiana created more manufacturing jobs from 2009 to 2011 than all of the Midwestern right-to-work states combined.

The pilot-project approach that the regional partnership’s Sampson suggested for northeast Indiana is a tactic that the U.S. Chamber of Commerce has tried elsewhere, according to Guyott. Furthermore, the region’s success in job creation is well known.

“There’s plenty of data out there how northeast Indiana stands right now. It’s either one of the best or the best poised for jobs,” Guyott said. “To offer it up as a potential pilot is specious at best.”

Morton Marcus, former director of the Indiana Business Research Center at Indiana University, dismisses the entire right-to-work debate as unnecessary.

“It’s largely an attempt by people who have long-term hostilities toward unions to stomp down on them,” he said. “Right-to-work deals largely with labor, representing under 10 percent of Indiana’s workforce. Right-to-work laws have not been a factor in the location of the Honda plant in Greensburg. They have not been a factor in location of the Toyota plant in Princeton, and General Motors exists in Fort Wayne without the benefit of right-to-work.”

Marcus said that in his 40 years of work as an Indiana economist, he had never heard of a company that refused to locate here for that reason.

“Some would prefer not to deal with unions, but if you are in the auto industry, you know that’s the reality,” he said. “To me, all of this is a big fight over a small issue. The fact that the IEDC can find only one company as an example proves it.”

What’s ahead

Regardless, the battle is set to begin next month. Ironically, it coincides with Indianapolis’ Super Bowl moment, where the star attraction will be 100-plus NFL players’ union members.

With a 37-13 GOP majority in the Senate and a 60-40 Republican House majority, there is little the minority party can do to stop the bill, according to Moses.

“We will protest,” he said. “The number of constituents who contact their legislators is important.”

Legislation approved at session’s end this past year will restrict House Democrats from staging another weeks-long walkout, but they can stall the process.

“We will be very deliberate and considerate in our proceedings,” Moses said. “The new rules allow different tactics than have been allowed in the past. … We’ll see how the bill is constructed.”

The real restraint for Republicans, however, will be the November election.

“This has not been discussed in an election season,” Moses said. “The labor rallies will continue and the people coming down (to protest) are only part of it. They only begin to reflect the strong feelings people have on this.”

The right-to-work bill’s momentum is also fueled by an assumption that everyday Hoosiers support it. House Speaker Brian Bosma awkwardly made that assertion at the legislative preview Thursday, just minutes after Ball State University officials presented poll results showing just 27 percent of Hoosiers support right-to-work, while 48 percent have no opinion or are undecided.

“Clearly, neither side on this issue has closed the deal,” said Ray Scheele, co-director of the Bowen Center for Public Affairs. “There is a lot of persuasion left to do.”

If Hoosiers haven’t reached consensus on right to work, there at least are other views on what’s needed to help the state’s 275,000 unemployed. Democratic lawmakers have offered their own jobs legislation: a “work sharing” bill that gives employers an alternative to layoffs by evening out economic slow periods. Affected employees would receive a portion of the unemployment benefit they would receive if laid off. Similar programs in 22 states have shown success.

Marcus has his own idea for economic development.

“I think one of the first things I would do is work on starting a combined program out of IU and Purdue and any other interested institution to improve the management of Indiana corporations,” he said. “The real problem is not our labor teams, but our management. My experience with Indiana firms is they are fundamentally content.”

He even offered an example – a Fort Wayne-area firm that a decade ago was still using draftsmen to design its products.

“It wasn’t using CAD (computer-assisted design), as everyone else was doing,” he said. “It took a student at IPFW pointing out to his father that it just wasn’t productive to do it that way. That’s blindness on the part of management.

“That’s the kind of legislative program I could get behind,” Marcus said. “Let’s send our managers back to school.”