March 10, 2023 | This Week in Government: House Passes Right to Work Repeal

To cheers from union workers in the gallery, House Democrats on Wednesday achieved a significant priority in repealing right to work while also restoring the prevailing wage for public construction projects.

It has been a union and Democratic dream to repeal right to work since it was passed by Republicans in 2012 in an event that brought 12,000 protesters to the Capitol. In 2018, the Republican-led Legislature repealed the prevailing wage through approving a citizens-initiated act to avoid a veto from then-Gov. Rick Snyder, a Republican who opposed the repeal.

Both policies inspired deep anger from union workers opposing the action then from Republicans. The state’s right to work means an employee cannot be legally compelled to pay dues to a union in order to be covered under their workplace’s collective bargaining agreement. Prevailing wage required union-scale wages to be paid to workers on public construction projects.

HB 4004 and HB 4005 both passed 56-53 along party lines. HB 4004 relates specifically to right to work in the public sector, and HB 4005 relates to right to work in the private sector. HB 4007, which concerns prevailing wage, also passed by a 56-53 vote.

“Labor is what built the middle class in this country,” Rep. Joey Andrews (D-St. Joseph) said during a speech from the House floor. “Unions are what enabled the American dream.”

The House adopted substitutes for both HB 4004 and HB 4005. Both introduced a $1 million appropriation for “educational purposes.” The inclusion of an appropriation makes the bills referendum-proof.

Gov. Gretchen Whitmer has drawn a line in the sand against using an appropriation to immunize a bill from referendum.

Republicans invented the tactic in 2000 to prevent gun control backers from putting the law granting an automatic right to a concealed pistol license up for referendum. A conservative Michigan Supreme Court majority held the Constitution’s prohibition on referendums for bills making appropriations to state institutions meant any bill with an appropriation, no matter how small, was immune from referendum.

In 2019, Whitmer vetoed line-item vetoed funding attached to a bill making changes to the Wrongful Imprisonment Compensation Act solely because she opposed violating referendum rights.

Asked Wednesday evening about the move to add an appropriation to the right to work repeal, Whitmer Communications Director Bobby Leddy said, “We support restoring workers’ rights and will be watching the legislation closely as it continues to move through the Legislature.”

If Whitmer signs the bill and leaves the funding in place, she would violate her own executive directive (ED 2019-7) that says, “I intend to veto legislation that circumvents the right to referendum.”

House Speaker Joe Tate (D-Detroit) said the Legislature would continue to have conversations with Whitmer’s office regarding policy bills containing appropriations.

Wednesday’s House session saw Democrats pass key priorities mostly opposed by Republicans. It was not without its hurdles, however. HB 4007 was temporarily delayed when Majority Floor Leader Abraham Aiyash (D-Hamtramck) accidentally took up a different bill, HB 4138, and then moved to pass on that bill for the day. The Democratic majority moved to reconsider the previous motion. Republicans claimed this tactic was against the rules.

The House Labor Committee heard testimony on all three bills Wednesday morning prior to recommending them to the floor. Four committee rooms were filled with people attending the hearing.

During the committee meeting, Rep. Doug Wozniak (R-Shelby Township) questioned Jessica Smith, a union worker who testified in support of the legislation. Wozniak asked Smith, who works as a meat cutter at Kroger, why 28 states had right to work laws if they weren’t effective.

“Laws are passed by politicians, and sometimes, politicians her from the highest bidder, and the highest bidder gets the loudest voice,” she said.

Several union workers also attended session on Wednesday in anticipation of the bills’ passage.

Republicans spoke in opposition to the bill package prior to the vote, saying that repealing right to work made the state less competitive economically and took away the choice of employees.

“We all have a shared goal, which is to make the state better. It’s very clear that these bills do not make the state better,” Rep. Graham Filler (R- Duplain Township) said.

Filler said the bill would put additional costs on construction companies that build infrastructure, make the state less competitive for attracting new businesses, take money out of people’s paychecks during inflation and waste state resources through the $1 million appropriation.

“People sent us here to help them make ends meet,” Filler said. “I want to keep more hard-earned dollars in your pocket, which this bill doesn’t do.”

Republican members also spoke in opposition to HB 4007, saying that it increased the cost of doing business in Michigan.

“This is a classic government solution to a problem that doesn’t exist,” Rep. Bill Schuette (R-Midland) said. “Simply put, our free market is working just fine, and this government solution creates a whole host of problems.”

Several organizations also voiced their opposition to repealing right to work laws.

“On House Bill 4004, it’s a public sector right to work bill. It’s been deemed unconstitutional by the Supreme Court of the United States, so the fact that it’s even being considered isn’t necessary,” said Steve Delie, director of labor policy for the Mackinac Center for Public Policy. “House Bill 4005, however, does affect the private sector. That bill has effectiveness to it, and we don’t think it’s good for the people in Michigan.

The Supreme Court decided that public sector workers are protected from being forced to provide mandatory financial support to unions in Janus v. AFSCME, which the court decided in 2018.

Amber McCann, press secretary for Tate, said that the legislation was written in such a way that if there was a change at the federal level, the law would allow for the change in Michigan.

Those who opposed the legislation also argued that repealing right to work would make Michigan less competitive.

“Right to work states have faster income growth. State population grows faster. Labor force frows faster. So, it’s got broad economic benefits,” Delie said. “Right now, workers in a unionized environment have that choice. They can choose to either join the union, if they think it’s doing a good job, if it reflects their values, or to not join the union. They may choose not to join because of the union’s political spending. They may choose not to join because they don’t think the union does a good job. They may choose not to join for a wide variety of reasons, but we think they should have that choice.”

Several Republicans also opposed what they called a rushed timeline for hearing and passing the legislation.

Rep. Jim Haadsma (D-Battle Creek), who chairs the House Labor Committee, noted that when right to work legislation was originally passed in 2012, there were no committee hearings.

The Michigan AFL-CIO praised the House’s quick action on the bills.

“Today, our pro-worker Democratic majority in the state House took historic action to undo the devastation caused by decades of attacks on workers’ freedom,” Michigan AFL-CIO President Ron Bieber said in a statement. “Since 2012, thousands of Michigan workers, labor leaders, and organizers across the state have been mobilizing and laying the groundwork for this moment. We applaud the House’s swift action to undo the damage caused by Betsy DeVos, John Engler, Rick Snyder and their worker suppression agendas.”

The Democratic majority in the Legislature has taken action in one or both chambers on all of its key priorities announced on the first day of the 2023-24 term – and then some – following a monster day Wednesday in the House.

As of Wednesday evening, an expansion of the Earned Income Tax Credit and reduction in retirement taxes have been signed by the governor. Expanding the Elliott-Larsen Civil Rights Act is almost to Gov. Gretchen Whitmer. Legislation repealing the century-old abortion ban has cleared both chambers. The House on Wednesday also took first steps on repealing right to work and reinstating the prevailing wage.

Even more than the top issues introduced on the first day of session have been completed. The House on Wednesday passed its first set of increased firearm regulations, moving bills to the Senate to require universal background checks.

Additionally, a bill that would repeal the requirement to hold back some third graders who aren’t reading proficiently is also on its way to Whitmer.

Wednesday was a big day in the Capitol.

In the House, Democrats held hearings and passed legislation expanding ELCRA. SB 4 is now near being law.”Amending Elliott-Larsen will help ensure Michiganders can’t be fired from their job or evicted from their home based on who they love or how they identify,” Whitmer said in a statement. “This is about doing the right thing, and it is just good economics. Bigotry is bad for business, and ensuring these protections will build on our reputation as a beacon of opportunity where anyone can succeed.”

Bills repealing right to work and restoring the prevailing wage (HB 4004, HB 4005, and HB 4007) also saw a hearing before being passed by the full House. Finally, in the House, another hearing was held on legislation increasing regulations on firearms. HB 4138, HB 4142, and HB 4143, which would require universal background checks, were reported and then passed by the House. The Senate took key steps on priorities, too. There, the chamber passed several bills repealing the state’s statutory abortion ban and associated criminal penalties.

HB 4006 and HB 4032 were ordered enrolled after final Senate action. SB 2, SB 37, SB 39, and SB 93 await additional House votes.”Today, we voted on a bill package that does exactly what the majority of people in Michigan have said they want,” Sen. Rosemary Bayer (D-Keego Harbor) said in a statement. “These fundamental decisions are so personal – no government should be telling us what to do. My abortion was necessary to save my life. I’m glad I’m here today because of that, and to be able to vote on this bill and ensure this life-saving healthcare is protected and kept safe and legal here in Michigan.”

Ten years after business groups, union critics, Republicans, and free market-oriented organizations achieved what long was considered unthinkable, making Michigan a right to work state, they slammed House action Wednesday to repeal that statute and revealed nascent discussions about a ballot proposal to restore the law.

Two prominent supporters of the move in late 2012 to outlaw requiring workers under a collective bargaining agreement to join the union or pay it a non-member fee said Wednesday as the new Democratic majority in the House moved legislation to passage that interest is high about pursuing a constitutional amendment that, if passed by voters, would supersede any bill passed by the Legislature and signed by Gov. Gretchen Whitmer.

“There’s been quite a bit of interest,” said Jase Bolger, a strategist and consultant who was the House speaker in 2012 and key to passing the right to work legislation. “There’s not yet been money raised or spent, but I can say in the last 24 hours I’ve gotten some significant outreach.”

Putting a constitutional amendment would require at least 446,198 valid signatures from registered voters to make the November 2024 ballot, so organizers would likely need about 600,000 to provide for enough cushion against invalid signatures.

Putting together the funds to pay for a campaign would likely be simple.

The same funders who paid for the successful $30 million opposition campaign to Proposal 12-2 in 2012 are interested in funding a proposal for 2024, Bolger said.

In 2012, unions pursued a ballot proposal to enshrine collective bargaining in the Constitution. That would have preempted right to work and gone further, but voters crushed the proposal, with 57.4% voting no and 42.6% voting yes. That was in a year when then-President Barack Obama won Michigan in the presidential race with 54.2% of the vote. While he had 2.56 million votes, Proposal 12-2 got just 1.95 million votes in favor, meaning about 700,000 Obama voters voted against the collective bargaining proposal.

“The same people who were involved in that defeat have had initial discussions about the constitutional amendment,” Bolger said.

Sources said one of the discussion points among right to work backers is it’s a no-lose proposition. Unions would be forced to spend a huge sum, likely in the tens of millions, to defeat the proposal instead of putting those resources into other candidates and causes.

Further, one source said it will help reinvigorate a dispirited Republican donor network in the state.

A memo circulated on the topic suggests, “should Democrats achieve this repeal then a more permanent solution is needed to secure freedoms for Michigan workers for good.”

It also said polling shows public support solid for a right to work law and points to Tennessee voters passing a constitutional amendment to put right to work into that state’s constitution by a 2-to-1 margin.

“There needs to be additional work to determine if we go forward, but I know that there’s strong interest, and I know that it’s very possible,” Bolger said.

Brian Calley, president and Chief Executive Officer of the Small Business Association of Michigan, which has slammed the legislation repealing right to work, said he anticipates a constitutional amendment will be pursued.

In 2012, Calley was lieutenant governor and, along with several power players then in the Republican firmament, encouraged a reluctant Gov. Rick Snyder to back a right to work law.

“A constitutional amendment, I think, is a fairly likely outcome,” he said. “The polling has been consistently encouraging over the last 10 years. The economic performance has been undeniable. The support specifically among union households, it turns out people like to be in charge of which organizations they join.”

A steady drumbeat of criticism from business organizations against the Democratic effort to repeal right to work hit Wednesday as the House Labor Committee moved the bills to the House floor for an eventual vote.

“The action by the House Labor Committee not only caves to union demands, but comes directly at the expense of workers, employers and taxpayers,” said Wendy Block, senior vice president of business advocacy and member engagement for the Michigan Chamber of Commerce, in a statement. “Right to Work is better for hardworking Michiganders and our job providers, communities, and economy. It’s about freedom and personal choice – the ability of employees to decide whether to pay dues or other equivalent fees to labor unions as a condition of employment and in how to spend their wages. It’s about our economic competitiveness and retaining current jobs and attracting next generation jobs. We simply can’t afford to turn back the clock to the outdated policies of the past.”Annie Patnaude, state director for Americans for Prosperity-Michigan, said the bill shows backing unions is more important than worker freedom to House Democrats.

“Instead of respecting workers’ right to choose union membership, lawmakers would rather strong-arm private sector workers,” she said in a statement. “The irony is that according to the AFL-CIO, union membership in Michigan grew after the state passed right to work – proof that freedom is good for everyone. This is yet another step backward for Michigan.”

Amanda Fisher, state director for the National Federation of Independent Business, called the legislation a “direct threat” to the group’s members, small businesses, and the state’s economy.

“The record of the last decade is clear: worker freedom leads to greater economic growth and prosperity for all Michiganders,” she said in a statement.

And the Michigan Manufacturers Association, which endorsed Whitmer for reelection, called the action a disappointment that would make the state less competitive.

MMA President and Chief Executive Officer John Walsh said the state’s ability to attract and retain business is at stake. Walsh voted for the legislation as a member of the House when it passed in 2012.

“MMA strongly opposes the repeal of right to work and will work to block this ill-conceived legislation,” he said in a statement. “This is a critical moment in Michigan’s history. Manufacturers will be less competitive if right to work is repealed.”

A $1.34 billion supplemental appropriations bill that includes $630 million for Ford Motor Company to aid its new electric vehicle plant in Marshall was signed into law Wednesday by Gov. Gretchen Whitmer.

HB 4016 (PA 5, immediate effect) contains several other major spending items:

• $212 million in federal funds for energy efficiency updates at residences;
• $75 million in federal coronavirus relief funds to pay for recruiting workers into health care and training;
• $67 million in federal coronavirus relief funds to pay for long-term care workforce recruitment, retention, and training;
• $63.5 million ($14.5 million General Fund) to increase Medicaid rates to nursing homes by 2% retroactive to January 1;
• $60 million in federal American Rescue Plan funds to pay for a competitive grant program for local government or nonprofit-run community centers; and
• $25 million General Fund for restoring residential water services and paying unpaid water bills.

In total, the bill contains $828.6 million in spending from the General Fund.

“I’m proud to sign this bipartisan legislation to grow our economy, protect public health, and lower costs for families,” Whitmer said in a statement. “We are coming together to recruit and retain health care workers, invest in regional economic development and infrastructure to secure thousands of good-paying American manufacturing jobs, and lower utility costs for families. I look forward to working with my legislative partners to build on this legislation to continue lowering costs, creating jobs and investing in communities across Michigan.”

Jennifer Root of SEIU Michigan praised the funding for nursing home workforce development.

“Nursing homes in Michigan are facing a staffing crisis and we applaud Gov. Whitmer and the Legislature for leaning in to making real, meaningful investments in Nursing Home Workforce Development,” she said in a statement. “We know that investing in these careers will mean better jobs, higher quality of care, and will benefit all Michigan communities.”

The effect of lowering the age for Michigan Reconnect and appropriating dollars to the Michigan Regional Empowerment program for competitive grants were among the few budget items for fiscal year 2023-24 discussed Wednesday by the Senate Appropriations LEO and MEDC subcommittee.

Department of Labor and Economic Opportunity Director Susan Corbin presented the governor’s recommendations before the subcommittee, of which Gov. Gretchen Whitmer proposed $2.87 billion ($832.4 million General Fund) for the agency.

One of Whitmer’s proposed items is lowering the age for Michigan Reconnect Program from 25 to 21, using $140 million in federal funds in the fiscal year 2023 supplemental to support the expansion.

Committee Chair Sen. Mary Cavanagh (D-Redford Township) asked Corbin to share the benefits of lowering the age, to which Corbin said more than 400,000 individuals would be eligible.

“There is a population in our state that would be missing out on opportunities if we didn’t lower the age to 21, and so by lowering the age to 21, it’s just sort of a nice continuum with the current Reconnect program, now offering it to anybody over the age of 21 and knowing that anybody who graduates this year is eligible for the Achievement Scholarship,” she said. And then also the dollars that the governor has proposed to help support those people whose education was disrupted by the pandemic.”

Sen. Kristen McDonald Rivet (D-Bay City) asked about the tri-share program, which would require the employer, the state, and the employee to each pay a third of child care. McDonald Rivet asked about the concern of pushing a third of the cost on businesses and asked Corbin if she thought it was working.

McDonald Rivet also said that many businesses were wondering why that’s the solution.

“Those are all the kind of conversations that we’re having. Obviously, the tri-share program is just a tiny, tiny slice of what’s happening in Michigan around child care, and just a tiny, tiny potential solution,” Corbin said. “We have 13 hubs around the state now, and I think those hubs cover 59 counties. We have over 200 families who are participating in the tri-share program, but our experience has been that employers are a little bit slow to adopt.”

Corbin also said LEO is trying to solve issues when statewide employers want to participate, saying she is open to any thoughts from McDonald-Rivet’s local stakeholders.

Included in recommendations for LEO is $200 million appropriated to the Michigan Regional Empowerment Program, $100 million for competitive grants for the Community Downtown Economic Development Program, and $65 million in federal funds for electric vehicle charging infrastructure.

The Regional Empowerment Program would provide grants to help those hoping to launch major regional economic development projects that could be used for affordable housing, broadband, workforce development, and manufacturing.

Sen. Mallory McMorrow (D-Royal Oak) asked about the empowerment program, saying the Amazon HQ2 in Virginia was a good example of how a state can leverage regional and economic development to targeted investments.

McMorrow asked if the competitive grants were competitive with other regions.

“Traveling around the state the last couple of years … we’ve heard proposals from locals on the ground about this kind of concept if there was a fund where a local region, a local community could come together. And these are not set regions, not a pre-established region, but there are so many projects around the state where communities already know what they need to be doing,” Corbin said. “So we envision a fund where self-identified regions could come together. … And the state would have an opportunity to come in and support projects that local regions truly believe could be transformational.”

MSHDA TALKS BENEFITS OF INCREASING HOUSING SUPPLY

The Senate subcommittee also heard from Gary Heidel, former executive director of Michigan State Housing Development Authority, about ways to help residents struggling with access to affordable housing.

Amy Hovey, the new executive director for MSHDA, was absent from the subcommittee due to personal matters. Heidel currently serves as MSHDA chief of staff, and on Wednesday, he spoke before the subcommittee about the various programs the state has to help Michiganders.

“When we do our data analysis, what’s going on in Michigan, 48% of renters are paying too much for their housing,” Heidel said. “Between 2013 and 2020, the average home sales price went up 84%. That’s something happening nationally.”

Heidel said the state has a gap of approximately 150,000 affordable housing units, and at least 47% of the housing stock is more than 50 years old. One of the biggest needs is home repair, Mr. Heidel said.

MSHDA made some headway during 2022, financing more than 11,000 units to help those facing foreclosure, spending $970 million to help divert people from being evicted from their homes under the COVID Emergency Rental Assistance Program, and financing more than 20,000 homes through the Housing Choice Voucher Program.

After sharing the highlights, McMorrow asked about the aging housing stock, saying many older homes are often torn down for half a million houses to be built in their place.

“How can we better incentivize or support builders, contractors? Because they’re looking at their bottom line and saying it doesn’t make sense to invest time and energy to do a cost affordable rehab versus a complete teardown and rebuild,” she said.

Heidel said the supply of affordable housing needs to increase, primarily through new construction and also through substantial rehab. However, solving the problem also means increasing the talent in Michigan’s construction industry.

After the Great Recession and the end of COVID, Michigan lost a lot of construction talent, Heidel said.

“That’s why we’re attacking it in two ways. One, more resources to do more repair, but second, to actually train more workers,” he said.

Cavanagh asked what could be done to lower the cost of rent. Heidel said it depends on the ability to finance more rental housing, which includes a low-income housing tax credit and getting financing to subsidize the cost of the projects to reduce rent.

“The problem of the cost of rent has a lot to do with the supply of housing, and when you have limited supply, prices go up,” Heidel said. “And so obviously one of the things we want to be able to do is to increase the supply which has a direct impact on lowering the cost.”