Against a backdrop of loud opposition from protesters, Indiana has become the first Rust Belt state to enact the right-to-work labor law prohibiting labor contracts that require workers to pay union representation fees.

Republican Gov. Mitch Daniels signed the bill Wednesday after it passed the Senate following weeks of discord that saw House Democrats boycott the Legislature and thousands of protesters gather at the Statehouse.

"Seven years of evidence and experience ultimately demonstrated that Indiana did need a right-to-work law to capture jobs for which, despite our highly rated business climate, we are not currently being considered," Daniels said in a statement.

"This law won't be a magic answer but we'll be far better off with it. I respect those who have objected but they have alarmed themselves unnecessarily: no one's wages will go down, no one's benefits will be reduced and the right to organize and bargain collectively is untouched and intact.The only change will be a positive one. Indiana will improve still further its recently earned reputation as one of America's best places to do business, and we will see more jobs and opportunity for our young people and for all those looking for a better life," he said.

Supporters say the measure helps create a pro-business climate that attracts employers and increases jobs. Opponents say right to work leads to lower wages and poorer quality jobs.

Indiana will be the first state in a decade to enact a right-to-work law, although few states with legislation in place boast Indiana's union clout, borne of a long manufacturing legacy. The move is likely to embolden national right-to-work advocates who have unsuccessfully pushed the measure in other states following a Republican sweep of statehouses in 2010.

Protesters say the fight isn't over and note that Indiana passed right to work once before but repealed it. Thousands of union members gathered inside the Statehouse chanted "Shame on you!" and "See you at the Super Bowl!" as the vote was announced, a preview of their plan to hold a rally outside in the Indianapolis streets.

Earlier this week, Daniels called it a "colossal mistake" for protesters to try to disrupt Super Bowl festivities, predicting it would backfire on them.

The Republican-controlled Senate approved the bill in a 28-22 vote Wednesday morning. 

"We're giving freedom to workers who don't want to be a part of something they don't believe in," said Republican Sen. Carlin Yoder, shortly before the vote.

But testifying against the bill Wednesday, Sen. Vi Simpson, D-Bloomington, said there was no evidence that right to work created jobs.

Passage of the law closes one chapter in the contentious debate that sparked a five-week walkout by outnumbered House Democrats last year and saw them stage numerous boycotts this session. This year, however, Republicans outnumbered Democrats in the House and Senate, and House Democrats facing stiff fines if they walked out for a lengthy period.

The Associated Press contributed to this report.