April 24, 2015 6:16 p.m. ET
Ohio Gov. John Kasich is considering a presidential run—and undoubtedly hoping to leverage his leadership of the quintessential swing state in the Electoral College. But if Mr. Kasich wants to compete against the likes of Wisconsin Gov. Scott Walker, he must stand up for employees and against antiquated labor laws that have made Ohio uncompetitive against its Midwestern neighbors.
Reforms to state labor laws have spread quickly through the region, leaving Ohio behind. In 2011 Wisconsin’s changes to its public-sector labor rules drew the media spotlight. In 2012 Indiana and Michigan passed right-to-work laws, ending requirements that employees pay union dues or agency fees to keep their jobs. Gov. Walker followed in March, signing legislation to make Wisconsin the 25th right-to-work state.
Labor reform has even rolled through states whose legislatures lack the political will to enact it themselves. In Kentucky, 12 counties have used their authority under home rule to pass local right-to-work laws. In Illinois, Republican Gov. Bruce Rauner signed an executive order enabling similar right-to-work zones. Then Mr. Rauner, joined by three state employees, filed a suit in federal court arguing that forcing workers who aren’t union members to pay “fair share” fees is unconstitutional.
Ohio and Gov. Kasich were once at the forefront of this trend. In March 2011, Mr. Kasich signed S.B. 5, a bill that included a variety of public-sector labor reforms, including limits on the ability to strike, limits to collective bargaining, and contribution caps for health-care benefits. But S.B. 5 is a story of mistakes—ones from which Ohio’s neighbors learned.
The law didn’t exempt firefighters and police, which allowed opponents to paint it as a threat to public safety. Supporters failed to predict, and thus prepare for, the union-funded effort to undo the law by referendum. More than $30 million was poured into the repeal campaign, much of it spent on scaremongering TV ads, and voters ultimately vetoed S.B. 5 in November 2011, 62%-38%. Days after the vote, a reporter with the Columbus Dispatch asked then-House Speaker William G. Batchelder III whether lawmakers would do things differently the next time around. “Oh, God, yes,” Mr. Batchelder replied. “If a fellow falls down the stairs, the next time he’ll turn on the light.”
Yet despite the furor, the GOP wasn’t routed at the polls. In the 2012 elections, Republicans picked up one House seat; in 2014 they gained five more. That put Republicans in control of 65 seats to the Democrats’ 35—the largest supermajority either party has held since the chamber became a 99-member body in 1967. The GOP held control of all statewide offices, too. Polls conducted in the aftermath of S.B. 5’s repeal showed that a majority of Ohioans said that workers should have the choice of whether to contribute dues to unions.
Even so, for the past four years Ohio’s legislature and Gov. Kasich have treated labor reform like a hot stove—once burned, they dare not touch again. But there are now signs that state leaders are getting back their nerve.
On Wednesday, the Ohio House of Representatives passed a budget that prohibits what are known as project-labor agreements in any construction that uses state funds. A project-labor agreement allows unions to negotiate wages and terms for workers on a construction site before any of them are even hired. The union-dictated rules then apply to all bidders, including nonunion employers, frequently requiring contributions to union benefit plans to which the nonunion employees may not even be eligible.
Studies by the Beacon Hill Institute at Suffolk University show that these agreements increase the cost of construction projects by 12%-18% and decrease competition by nonunion contractors. Experience has borne this out in Columbus: When a project-labor agreement was dropped between rounds of bidding for school construction contracts, the new bids came in as much as 22% lower.
Ohio House Speaker Cliff Rosenberger has given Gov. Kasich a modest but significant opportunity to remove impediments to the state’s success. The governor wields a line-item veto, so when the bill arrives on his desk, he can choose to keep or to strike the ban on project-labor agreements.
That’s assuming the ban makes it through the state Senate, which still must approve the budget. Pressure is mounting on the chamber to strip out the provision. Mr. Kasich could express disapproval quietly behind the scenes, encouraging senators to cut it. Or he could come out strongly and publicly in support of ending project-labor agreements, aiding passage of the reform.
The governor should take the latter step—and many more. As Ohio goes, so goes the nation. No Republican has won the White House without carrying the Buckeye State. The last Democrat to do so was John F. Kennedy. Mr. Kasich overcorrected after S.B. 5 was defeated, strongly suggesting that right to work is unnecessary for Ohio. “We have a pretty good labor climate here,” he told the Cincinnati Enquirer. He swung so far in the other direction that he picked up the endorsement last year of Local 18 of the International Union of Operating Engineers, which for years has run billboards claiming that workplace freedom “poisons workers.”
The polls say otherwise: Businesses and employees across Ohio are clamoring for right to work. The governor needs to walk back his error and take another crack at labor reform—for the sake of his state’s economy and his own presidential ambitions.