Part of the Washington Examiner's weeklong commentary series on labor unions. To see the entire series, click here.
Indiana Gov. Mike Pence did not sign his state’s new right-to-work law. That was done by his predecessor and fellow Republican, Mitch Daniels, in 2012.
But the current governor is an enthusiastic supporter, arguing that there is already evidence that it is acting as a jobs magnet for the Hoosier State.
Pence, who personally witnessed the federal government’s economic dysfunction up close for 10 years as a congressman, explained to the Washington Examiner how states like his own are “blazing a trail … for economic freedom.”
Pence: Indiana is a right-to-work state and we operate as such. I believe it was a reform in favor of economic freedom that was not only historic -- Indiana was the first industrialized state in the Midwest to recognize the right to work -- but it's clearly had an impact in our economy since.
I’ll give you a couple of data points. Since the passage of our right-to-work legislation, 120 companies have communicated with our economic development team that our enactment to right-to-work would factor into their decision-making.
Eighty-two of those projects have progressed to the pipeline stage and account for the potential of more than 9,000 projected new jobs and more than $2.9 billion in investments.
Of the 82, 64 companies have already accepted. The state’s incentive offer is accounting for more than 7,900 projected new jobs. So, we think it had an undeniably positive impact on Indiana’s competitiveness.
Examiner: You think those changes are directly attributable to the law, not to anything else, not to the change in the economy otherwise?
Pence: Well, the group that I was talking about specifically said that the fact that Indiana became a right-to-work state was a factor in their decision-making but obviously, we're a low-tax state, too.
We have a triple-A bond rating. We've been working hard to create a pro-business regulatory environment. We have a great workforce, we're the best location in America, and [have] a national reputation for education innovation and reform. Those are all factors.
We’re continuing even in this session of the General Assembly to try and improve our position with more education innovation and more tax reform.
We’re pushing corporate tax reduction as well as reform of the business personal property tax, the tax on the equipment.
So, I'll just indicate that it was a factor in the decision-making of those 120 companies we could quantify but I think the reason Indiana has the lowest unemployment rate in the Midwest, the reason that we've seen the growth that we've seen over the last several years, is a combinations of all those factors.
Examiner: Do you think [right-to-work has] been around long enough for it to have a quantifiable measurement?
Pence: Well, I would just say that with regard to our experience — and I always tell people, it’s not in the state constitution, but I know that part of my job description is to be salesman-in-chief for Indiana, and as salesman-in-chief, I can tell you, it is a subject that comes up often in economic development discussions with companies outside the state of Indiana.
Companies that are looking [for a place to locate] would often point first to our fiscal health — the fact that we have [a] triple-A bond rating, nearly $2 billion in reserves, and a very, very strong balance sheet. But I would say that right-to-work factors as a top-three conversation item in all of our competitive discussions with businesses that are looking to locate in our part of the country.
Examiner: What, in your estimation, is the worst aspect of the type of closed-shop rules that the right-to-work law has done away with? How exactly do they harm the economy? What exactly do they do?
Pence: Well, I actually just think it's more personal than that. I've long believed that no one should be required to join the union as a condition to their employment.
My grandfather was a member of the bus drivers’ union in Chicago, Ill., for 40 years. I understand the contributions that unions have made to the life of the nation for more than a century. I respect that and would defend the right of any Hoosier to join a union if they so desire.
But it was the requirement of joining a union as a condition of employment that has always been my primary reason for supporting right-to-work.
I believe that assertion of personal liberty and personal choice is the reason why it was supported in our state — all the economic benefits notwithstanding — I think that’s probably the greatest value, just preserving a personal choice of individuals in the workplace.
Examiner: Do Indiana, Michigan — and, to a lesser extent, Wisconsin, since it was only public sector — but nevertheless, do those three represent a trend?
Pence: Well, look, Indiana's been blazing a trail for low taxes, balanced budgets, and economic freedom in the Midwest, and I say with a wink and a smile that we're happy to see our friends in Michigan follow us on right-to-work after Indiana led the way.
I really do believe that when you’re talking about the industrial Midwest that a strong fiscal foundation, low taxes, sensible red tape, economic freedom in the workplace, are all a winning combination for really relighting the full potential of the industrial Midwest.
I just really believe that here in the heartland, getting back to the practice of those basic principles is going to be a key toward real economic renewal, and not only for this part of the country but for the country as whole.
I’m very biased regionally about this but I just really believe that for our country to reach her full economic potential in the 21st century, we’ve got to get the industrial Midwest firing on all cylinders again.
Economic freedom in the workplace, I believe, is an important aspect of the kind of policies that will invite investment and growth in the areas of economic strength, manufacturing, and industry.
Examiner: What does the return of right-to-work laws say about the status of unionism itself? Union leaders don’t seem to know how to argue against them or even talk about them.
Pence: I don’t think I’d have a comment on that. For me, it was just the right thing to do, and I was very pleased that the Indiana General Assembly adopted the right-to-work legislation and that my predecessor signed it into law before I was elected as governor.
Had they not done so, I would have championed the issue. From my first day in office, I have long believed that one should not be required to join a union as a condition to your employment.
But I also think it’s just as important that we always articulate the freedom of every person to join a union or a voluntary association in this country. So I’d leave the larger conclusions about it aside.
I think it was a right thing to do for Indiana, and we have some real evidence that it’s part of a winning story. We call Indiana “the state that works” and I believe that part of that successful equation in Indiana today is the economic freedom in the workplace.
Examiner: Do you think the National Labor Relations Act should be amended to make way toward the standard nationally?
Pence: I have long supported the right to work. I served on Capitol Hill for 12 years. So I think my record on that is pretty clear, but I just believe it was the right thing to do here in the Hoosier State.
I’m grateful for it. It’s been a great, great part of a widening success story here in Indiana, and I really appreciate the chance to visit with you about it.
Examiner: More broadly, do you think organized labor — at least the Wagner Act model — is fading out, and if so, is anything going to replace it? Do you have any thoughts on that?
Pence: I really wouldn’t. I’d leave that to others. I just say that — well, I don’t believe a person should ever be, or have to be, required to join a labor union as a condition of their employment.
I would never want to deny or stand in the way or the right of any Hoosier to join a union if they so desire. I think the issue here for me, and I think this resonated with Hoosiers when it was passed into law, was the issue of personal freedom and I’m a person of choice.
That’s where I’ll stay focused and we’ll keep telling Indiana’s story and work every day to improve it.
Examiner: What do you say to critics who argue that right-to-work laws are meant to undermine unions by causing them lose members, just [to] play the devil’s advocate?
Pence: Well, I actually think there’s some evidence in a number of right-to-work states where union participation was actually higher than in non-right-to-work states.
It’s a question of personal choice, it’s a question of allowing employees to make their own decisions and allowing employers and employees to work out beneficial arrangements in ways that will help them build a great, successful workforce and also lay a foundation for real prosperity.
We saw 42,500 net new jobs created in Indiana last year. We’ve dropped down to the lowest unemployment rate in the Midwest. Our labor force is actually growing in Indiana — when the nation’s labor force is contracting.
I think all of that is a testament to our fiscal responsibility to our pro-business regulatory environment, to our low taxes, and I believe right-to-work is a part of that winning equation.
Examiner: Have you got any feedback from the rank and file about union members in Indiana? What do they tell you?
Pence: Well, I have but we’ve been working very hard in the Hoosier states since I was elected to make career and vocational education a priority in every high school in the state of Indiana again.
So we’ve been working with trade associations and labor unions to collaborate with the state of Indiana in that regard.
I can tell you, we’re just determined to have the best-educated and the best-skilled workforce in the country and I think our discussions are all about the future and about how we build on a future of really boundless opportunities for all of our people.