Editor’s Note: A bill to repeal Virginia’s right-to-work law is currently working its way through the Virginia House of Delegates. More dangerously, a bill to require “Agency Shop Fees” will be considered Sunday in the Senate Commerce and Labor Committee, and would require non-union employees where there is a union contract to pay up to 60 percent of union dues to the union – an average of $450 each year from more than 19,000 workers. Business leaders have made clear that this will have the same effect as full right-to-work repeal. And here is the effect of that repeal …
The repeal of Virginia’s Right-to-Work law would result in the loss of dozens of economic development projects, “thousands” of manufacturing and supply-chain jobs, and $9 million to $25 million per year in annual General Fund revenue just from the state’s current project prospect pipeline, reports the Virginia Economic Development Partnership (VEDP) in a fiscal impact statement for HB 153.
The bill, introduced by Del. Lee Carter, D-Manassas, with six co-patrons, would repeal the Right-to-Work law, which prohibits making union membership a prerequisite for employment. Virginia is the northernmost Right-to-Work state on the East Coast, and the law has been a pillar of the state’s economic competitiveness. Scrapping the law would have a particularly devastating impact on rural areas and small metros where manufacturing and supply-chain operations comprise a large part of the economic base.
As the fiscal impact statement explains, a state’s Right-to-Work status is a primary factor considered by company executives and site-selection consultants scoping out sites for corporate expansions. A 2019 survey by Area Development found that more than 70% of corporate executives and 38% of site-selection consultants indicated that it is “important” or “very important” for a state to have a Right-to-Work law. Site selection consultants have told VEDP that a change in the policy would impact Virginia’s competitiveness for economic-development projects, especially in the manufacturing and supply-chain sectors.
Over the previous 18 months, Virginia announced nearly 60 projects in the manufacturing and supply chain sectors that represented 8,500 jobs and $6 billion in capital investment. VEDP believes many of these announcements would not have occurred if Virginia were not a “right to work” state at the time the companies made their location decisions.
VEDP is currently working on 349 potential projects in the manufacturing and supply chain sectors with more than 37,000 total jobs and more than $11 billion in capital investment. … VEDP’s position is that Virginia’s competitiveness for these potential projects will be materially compromised if an outright repeal of “right to work” were to advance. …
VEDP conservatively estimates that repeal of Virginia’s “right to work” status would result in the loss of new project announcements representing thousands of manufacturing and supply chain jobs, particularly in rural and small metro areas, and that the Commonwealth would lose approximately $9-$25 million in general fund revenue per year from our current prospect pipeline, a loss of revenue that would grow over time as Virginia is not considered for future projects or is not selected due to changes in its “right to work” status.
Here are some of Virginia’s recent economic development successes in the past two weeks that might have been put at risk had the Right-to-Work law been repealed:
Custom Truck One Source
Manufacturer and distributor of specialized trucks and heavy equipment
$2.6 million investment, 61 new jobs
Bedford County
Feb. 4, 2020
ePac Flexible Packaging
Digitally printed flexible packaging
$6.5 million investment, 35 new jobs
Henrico County
Feb.3, 2020
Acesur
Olive oil manufacturing
$11 million investment, 29 new jobs
City of Suffolk
Jan. 32, 2020
Mack Trucks
Manufacturing of medium-duty trucks
$13 million investment, 250 new jobs
Salem
Jan. 30, 2020
Blue Ridge Designs
Manufacturer of screen-printed apparel
$2.28 million investment, 118 new jobs
Carroll County
Jan. 29, 2020
GMAX Industries
Manufacturing and sourcing of medical disposable products
$10.5 million investment, 40 new jobs
City of Franklin
Jan. 27, 2020
Traditional Medicinals
Herbal tea manufacturing and processing
$29.7 million, 56 new jobs
Franklin County
Jan. 21, 2020
Patton Logistics Group
Logistics and warehousing operation
$12 million, 33 new jobs
Pulaski County
Jan. 21, 2020
A version of this commentary originally appeared in the February 5, 2020 online Bacon’s Rebellion.
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During my 37 years in Virginia local government economic development I witnessed the impact of right to work in business recruitment. Almost without exception the businesses that I worked with cited this law as a primary reason for their interest in Virginia. Most were explicit that only right to work states were being considered. To change this now might satisfy someone’s short sighted political agenda, but it would undoubtedly disqualify Virginia from the plans of many potential new businesses and would either drive many existing ones to leave or cancel their future expansion plans.