State Sen. Greg Lavelle R- north Wilmington, has re-introduced legislation to create right-to-work zones in Delaware, citing the passage of a bill in Wisconsin.
Lavelle’s bill does not advocate making Delaware a right-to-work state, according to a release from the Senate Minority Caucus. Instead it would allow the Director of the Delaware Economic Development Office (DEDO) to create right-to-work zones as a way to bring new jobs to Delaware.
Under the measure, manufacturing businesses in a right-to-work zone that hire 20 new workers, would be exempt from paying the Gross Receipts Tax for five years. The tax is based on sales, not income.
Senate and House Republicans have pushed for this bill the last two years say such an initiative would create a more competitive environment. Delaware is surrounded by states without right to work laws.
Manufacturers, automakers for example, often bypass states without right to work laws. Right to work laws allow workers to not pay union dues, even if their bargaining unit is represented by a union.
The measure would face an uphill battle, due to the Democratic majorities in both houses and ties to organized labor
Last month, Wisconsin became the 25th right-to-work state, with a controversial bill that was signed into law on March 9. Earlier, the Wisconsin legislature essentially took away collective bargaining rights for public employees.
Lavelle said he hopes the bill, sponsored in the House by Rep. Daniel Short, R-Seaford, gets a fair hearing. Last year, the bill was held in committee.
“It’s the same legislation,” Sen. Lavelle said. “The only difference is that Delaware’s economy continues to underperform in manufacturing. The 25th state, Wisconsin, just passed right to work legislation, so we’re at a decided disadvantage in terms of recruiting companies to come to Delaware. Wilmington continues to have crime and employment issues and this will be a way, possibly, to incentivize job growth in the city of Wilmington.”
In 2012, Indiana and Michigan became the 23rd and 24th states, respectively, to adopt right-to-work laws. Since then, according to the U.S. Bureau of Labor Statistics, Indiana has added 41,000 manufacturing jobs while Michigan has created 63,000 additional manufacturing positions. Both states have benefitted from the presence of the auto industry, which disappeared from the state in 2008 and 2009.
The U.S. Bureau of Labor Statistics reports Wisconsin had 33,800 manufacturing jobs in Feb. 2005. That total has since declined by 25 percent.
The measure’s sponsors say there are multiple Delaware locations where new manufacturers could take root, such as the former General Motors Boxwood Road facility near Newport, portions of the City of Wilmington and areas of Kent and Sussex counties.
The bill is endorsed by the Delaware Chapter of the Associated Builders and Contractors, an organization representing merit shop non union contractors.
