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Employee choice would send strong signal for economic development

By Jim Henderson

Kentucky workers are some of the most productive in the nation.

I know that our state has a lot to offer prospective employers. Our central location and access to major interstates provide convenient transportation that companies need. In addition, our rank as the state with the lowest energy costs helps keep production expenditures down.

But I also know that Kentucky has one large hurdle to overcome – the current ban on employee choice – before we can maximize economic development and ensure that our children don't have to move out of the state to find a good job.

We are the only southern state that forces people to join and pay dues to a union if one is present in a workplace. This policy sends a signal that Kentucky is not a job-friendly commonwealth.

This issue especially hinders our efforts in Simpson County – and any other county, for that matter – that borders Tennessee, an employee-choice state. We regularly compete for businesses with Tennessee, northern Mississippi, northern Alabama and Arkansas – all of which have employee choice. Time and time again, companies don’t even give Simpson County a look because Kentucky is not an employee-choice state.

A national study conducted by Thomas J. Holmes in the “Journal of Political Economy” found that manufacturing employment increases 30 percent to 40 percent when crossing the border from a state without employee choice into one that allows workers to make their own decisions about union membership.

Conversely, manufacturing employment declined by one-third when moving from the border in an employee-choice state over to the border of a non-employee choice state. It’s a telling contrast for areas that are separated by less than a few miles in distance, but are worlds apart in terms of economic development.

We recently lost the opportunity to have a Massachusetts company relocate in Simpson County. It moved to middle Tennessee instead and cited the issue of employee choice as a factor in its decision. Nissan North America recently announced that it is moving its headquarters and 1,300 jobs from California to Nashville.

When Colgate announced plans to close its historic plant in Indiana, just across the river from Louisville, did it make the convenient move to Kentucky? No, it left a non-employee choice state, skipped over Kentucky, another non-employee choice state, and landed in – you guessed it – Tennessee.

Our neighbor to the south has leveraged that advantage into greater prosperity for its people. According to the U.S. Bureau of Economic Analysis, in 1969, Kentucky and Tennessee were neck-and-neck in a race to the bottom of all states in per capita disposable income. Today, Tennessee has climbed to 31st while Kentucky ranks 45th.

Most of us have the perception that American jobs are leaving for other countries. While this is true in many cases, it’s not the case for the majority of outsourcing.

The Bureau of Labor Statistics reports that in job loss due to outsourcing, 70 percent of those work activities were reassigned to other places in the United States. That’s why it's important for Kentucky to have every economic development tool available and every possible advantage that we provide.

If we're willing to spend hundreds of millions of tax dollars on incentives to bring more jobs and brighter futures to the commonwealth, why won’t we take another step in making those goals a reality by enacting an employee-choice bill that doesn’t cost a dime?

In 2001, Oklahoma became the latest state to pass employee choice.

Oklahoma now has one of the best-performing economies in our nation. According to the U.S. Census Bureau, the year after it adopted employee choice, Oklahoma was the only state to post a statistically significant rise in real household income. An additional 54,000 Oklahomans also were covered by private health insurance during that same time period.

By giving employees a choice about whether they want to join and pay dues to a union, Kentucky would take itself off the economic development “No Call” list. Most companies that are looking to expand in the United States don’t even consider Kentucky because we are not an employee-choice state.

We must take action today. For a place like Simpson County, which borders Tennessee, enacting an employee-choice policy would remove a competitive disadvantage. That’s why I support Gov. Ernie Fletcher’s efforts to make Kentucky a better place for economic development. And that’s why I am asking the General Assembly to pass employee-choice legislation during the current session.

The cost is nothing, the opportunity is great and the time is now.

Jim Henderson is judge-executive of Simpson County, Kentucky. This article, which has been edited for length, originally appeared in the Franklin Favorite on Feb. 16, 2006. It is reprinted with permission from the Bluegrass Institute for Public Policy Solutions.

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