Right-to-Work Repeal Would Cost “Thousands” of Jobs, Says VEDP

Governor Ralph Northam at a recent announcement that an investment by Mack Trucks would create 250 new jobs in Salem, Va. Would Mack have committed to Virginia without a right-to-work law?

by James A. Bacon

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 78% 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

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
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