DOVER — For unions, the right-to-work bill stalling in committee is a victory. For business coalitions, it’s a setback.
But for both, the issue isn’t over.
The Democratic-dominated Senate Labor and Industrial Relations Committee opted Wednesday not to release Senate Bill 54, which would bring right-to-work zones to Delaware in limited capacity.
In general, right-to-work laws guarantee that no worker can be compelled, as a condition of employment, to join a labor union or to pay dues to a union.
By allowing the head of the Delaware Economic Development Office (DEDO) to create right-to-work zones around manufacturing companies hiring at least 20 employees, the proposal would create jobs, supporters claim. It also would exempt the businesses from gross receipts taxes for five years.
Support from business federations and Republican lawmakers was not enough to overcome opposition from unions and Democratic lawmakers.
Despite the majority-Democratic committee blocking the bill, more proposals are on the horizon.
House Bill 87 would let municipalities designate areas as right-to-work zones. Sen. Colin Bonini, R-Dover, said he plans to introduce a similar proposal in the Senate and may opt to suspend the rules. That could lead to his bill being released directly to the Senate floor.
Individuals on both sides appeared to already have made up their minds about the proposal. On Wednesday, arguments centered on falling wages, the importance of unions and the willingness of companies to settle in non-right-to-work areas.
The bill’s sponsor, Sen. Gregory Lavelle, R-Sharpley, called the zones a tool that could aid the government. DEDO would not have to create the zones every time but could do so when the director wanted.
Supporters said companies greatly value having right-to-work laws and would help attract jobs to Delaware.
“Despite the efforts of our governor, Economic Development Office ... efforts to reach out to them, to get Volvo, we couldn’t even get a phone call returned,” Sen. Lavelle said.
Proponents of Senate Bill 54 believe the zones would bring additional jobs, whereas opponents cite the value of labor organizations in establishing employee protection.
Delaware’s manufacturing wages are down 19 percent since 2009, while similar wages are down 3 percent in non-right-to-work states and are up 5 percent in right-to-work states, said David Stevenson of the libertarian Caesar Rodney Institute, citing the Bureau of Labor Statistics.
The bill is not intended to hurt unions and actually could help them, he said. After Indiana adopted right-to-work laws in 2012, it added 120,000 jobs and 50,000 union members, he said.
However, union representatives pushed back in their testimonies.
“Bottom line is this bill, I don’t care how you want to paint it ... it’s an anti-union bill, it’s to bust unions,” said James Maravelias, vice president of the Delaware AFL-CIO.
Four of the six committee members are Democrats, and several of them appeared skeptical of the right-to-work supporters’ claims.
“The unions, a long time ago when they organized in this country, created the middle class,” claimed chairman Sen. Robert Marshall, D-Wilmington, said. Weakening unions would be a “setback,” he added.
Sen. Karen Peterson, D-Stanton, questioned how the law would work under the National Labor Relations Act, which provides for the right of workers to unionize.
Greg Mourad, vice president of the National Right to Work Committee, said while courts consistently have struck down local right-to-work statutes created by municipalities, a state law allowing for individual zones would be legal.
Delaware could be a test case, supporters noted. With no right-to-work states in the Northeast, Delaware would become the closest such state if it passed the bill, attracting businesses from up and down the Eastern Seaboard, several people said.
“We have manufacturing sites, we have a port, we have rail, we have the ability to use right-to-work as a piece of the puzzle to leverage those other pieces to bring manufacturing back,” said Kevin Fasic, a lawyer with Cooch and Taylor.
Despite a claim from Sen. Gerald Hocker, R-Ocean View, that the state has lost 50,000 manufacturing jobs, Bureau of Labor Statistics data shows it is down about 7,500 such jobs since 2007.
Twenty-five states, mostly concentrated in the South and Midwest, currently have right-to-work laws. Economists have not reached a clear consensus on the issue, and a 2011 study from the liberal Economic Policy Institute claimed that wages in right-to-work states are 3.2 percent lower after controlling for other factors. However, unemployment is also 1 percent lower, according to the data.
The proposal remains in committee, as no members made a motion to release it.
Afterward, Sen. Lavelle criticized DEDO for not sending a representative to the meeting, although the agency’s hands may be somewhat tied.
“I think it’s really the governor’s call at the end of the day, and the governor’s made his position fairly clear,” he said.
A spokeswoman for Gov. Jack Markell, a Democrat, recently questioned the benefits of right-to-work.
Thanking the Democratic caucus for allowing the bill to be heard, Sen. Lavelle noted right-to-work could be discussed again in some capacity.
Abandoned sites like the Claymont steel mill and Newport car plant would serve as suitable locations for manufacturers, who only need an incentive to come to the First State, he argued.
“Let’s keep talking about it,” Sen. Lavelle said. “Let’s look at the cold hard facts.
“First of all, I don’t think it’s a union-busting bill, but the cold hard facts if you’re talking about middle-class wages, middle-class families, they are struggling in Delaware.”