If My Man Mitch is anything, he is a fabulous politician. This past weekend, the controversial Indiana Right to Work (RTW) bill was signed into law by Governor Daniels. Coincidentally, or luckily, for Mitch Daniels, the media was a little too distracted by Hoosiers zip lining through Super Bowl City and celebrities venturing out on once-in-a-lifetime trips to midfield to focus on the protests surrounding the first law of its kind in the Midwest. In case you had your eyes on the flying Doritos baby, and not on the plaid clad union members this past Sunday, here are the basics of this new law that has really stirred up the politics pot.
So, what is the law even talking about? Don’t we all have the right to work? Well, some might argue its title is a little ironic, but the law is designed to both give freedom of choice to individual workers concerning union membership, rather than force coercion into payment of union dues in exchange for collective bargaining rights, as well as to attract business to the state, creating employment growth and economic vitality.
While that all sounds good in theory, union leaders have cried out against the unfairness of the law, as it allows workers to receive union benefits without paying union dues. Many also argue the only business Right to Work states attract are low wage jobs. Oh yeah, and the Indiana Democratic Party receives one-third of its funding from unions. That might explain why House Democrats have held walk outs more times than anyone can count this past year.
Unions and Democrats did their best to fight RTW in Indiana, but there’s no use crying over spilled milk. Right to Work is active in 22 other states. It won’t be overturned, but could it be improved? Mitch has a reputation for running Indiana more similarly to private enterprise, and his push for this law simply furthers his status as a smooth businessman. As every businessperson knows, labor is one of the highest and most variable costs of production.
In regards to domestic competition, the law makes Indiana more attractive than its neighboring, heavily unionized states to business. Boeing proved this case when it moved production of a manufacturing plant from Washington, a non RTW state, to South Carolina, a RTW state. However, in global manufacturing supply chains, labor costs can’t creep any lower in any of the United States — RTW or not — compared to those in a foreign state with a developing economy. Our labor costs as a nation are some of the highest in the world. This is the primary reason for outsourcing work: If you were a manufacturing company, would you like to pay your workers thirty-five dollars an hour in the United States, or two dollars an hour in the Philippines?
This simple example begs the question: why is our country pushing for unskilled, low wage jobs as if we are stuck in the Industrial Revolution? The economy of the Philippines is not nearly as developed as ours, so why would we try to compete with them or any other low cost labor country?
America is seen by many as the leader in innovation of the high-tech sector and the center of the financial world, yet we are failing to fully capitalize on this ideal. If Mitch Daniels really wants to bring jobs to the state, or Obama to the entire country for that matter, he should consider improving the education system. More graduates earning higher degrees equals better paying jobs equals lower unemployment. Was that really so hard?