March 24, 2023
Gov. Gretchen Whitmer on Friday signed bills repealing the state’s Right-to-Work law and restoring prevailing wage rates, doing away with Republican labor policies long despised by union groups.
Taken together, the legislation would end a 2012 law that prohibits compulsory union dues or fees and restore a construction-industry “prevailing wage” law the GOP repealed in 2018.
“Today, we are coming together to restore workers’ rights, protect Michiganders on the job, and grow Michigan’s middle class,” Whitmer said in a statement announcing the bill signings.
“These bills will protect health and safety, ensuring healthcare workers can put patient care ahead of profit, construction workers can speak up when there’s a safety issue, and employees can call attention to food safety threats and other problems,” she continued.
Democrats pushed the bills through the Legislature over protests from Republicans, who contend the changes will make Michigan less competitive for employers.
The 2012 Right-to-Work law, passed when Republicans controlled the Legislature and the governor’s office, allows workers to opt out of paying dues in union-represented jobs but still receive benefits.
A total of 27 states have the laws, which Democrats say encourages “freeloaders” and reduces union membership. Signed by then-Gov. Rick Snyder, Michigan’s statute was a major blow to unions in a state touted as the birthplace of the modern labor movement.
In the years that followed, union representation in Michigan dwindled and union members complained that colleagues who didn’t pay dues were still able to benefit from union workplace rules.
Under the new repeal law, workers who don’t want to become union members would have to pay fees or leave their job if their union shop requires fee payment as a condition of employment.
The repeal only applies to contracts with private sector employers, such as automakers and manufacturers, because a 2018 Supreme Court decision prohibits compulsory dues or fee payment for public employees.
Democratic Michigan lawmakers passed bills repealing the policy for both the public and private sector anyway in the event that federal precedent changes.
Prevailing Wage Restoration
The prevailing wage bill approved by Democrats will restore a law that guarantees union-scale wages and benefits on any government-funded construction project, including at schools.
The state’s former Republican-led Legislature repealed the law in 2018 after an expensive petition drive led by Associated Builders and Contractors of Michigan (ABC Michigan), which represents non-union construction contractors across the state.
Whitmer unilaterally restored prevailing wage rules for state-funded projects in 2021, a move that infuriated Republicans. The new legislation would restore a similar mandate for local government projects.
Projects financed by existing tax millages would not be impacted so long as they were in effect before the legislation takes effect under an amendment added by Democrats Tuesday. Construction workers could also take a contractor to court for damages or other relief if prevailing wage is not met.
Why They Can’t be Repealed Via Ballot Initiative
In passing the Right-to-Work and prevailing wage measures, Democrats used a procedural move that likely would prevent opponents from repealing it with a ballot initiative.
They added appropriations to the legislation to make it referendum-proof under the state Constitution. The Right-to-Work repeal bills include a combined $2 million in funding to inform businesses and employees about the change, and the prevailing wage bill contains a $75,000 appropriation for similar purposes.
It’s a big departure from Democrats’ past positions, as Whitmer and other Democrats condemned the practice when Republicans were in power.
In her 2018 campaign for governor, Whitmer promised to veto any such measures. She renewed that pledge in a 2019 executive directive, saying, “I intend to veto legislation that circumvents the right to a referendum.”
Rep. Regina Weiss, D-Oak Park, recently told reporters that Democrats “don’t want … a lot of outside interests to come in and try to push something through.” If voters don’t agree, they can elect new representatives in the next election, she said.
“The hope is that folks in Michigan will see the benefits…and that they will continue to endorse these choices moving into the future,” she said.
In response, business groups are contemplating a ballot measure that would enshrine Right-to-Work in the state Constitution which, if passed, would circumvent the repeal.
What Supporters Say
Supporters of the union-backed measures say it’s a restoration of Michigan workers’ rights and ensures they’re getting fair wages.
In 2012, thousands of union workers gathered at the Capitol to protest implementation of the Right-to-Work law. In the eyes of many union officials, repealing it puts Michigan back on the right track.
“After decades of anti-worker attacks, Michigan has restored the balance of power for working people by passing laws to protect their freedom to bargain for the good wages, good benefits, and safe workplaces they deserve,” Ron Bieber, President of Michigan AFL-CIO, said in a statement.
Sen. Darrin Camilleri, D-Trenton, said the repeal law is “tangible proof that the Republican attack on organized labor has failed.”
Unions also contend that a uniform prevailing wage policy will benefit workers and allow contractors to win construction contracts based on the craftsmanship and productivity of their workforce, not by lowballing how much they pay workers.
Unions backing the Right-to-Work repeal are major donors to Democrats. Five of the state’s largest unions made $3 million in political contributions across Michigan during the election, all but $51,000 of which went to Democrats, according to a recent Bridge Michigan analysis of campaign finance records.
What Opponents Say
Opponents of repealing Right to Work have said doing away with it would make Michigan less competitive for employers and force workers to pay for representation some don’t want.
Repealing Right-to-Work is “a massive, unforced error that weakens Michigan’s ability to compete globally,” Joseph G. Lehman, president of the Mackinac Center for Public Policy, said in a Friday statement.
Detroit Regional Chamber President and CEO Sandy K. Baruah said Right-to-Work repeal “weakens Michigan’s global economic competitive position and harms our ability to vie for new businesses and jobs.”
“As states compete for jobs in the global market, those with Right to Work laws have a distinct advantage,” Baruah said. “Michigan now loses this key economic development tool to the detriment of our employment base and local economies.”
Conservative lawmakers argued Right-to-Work gave workers an important choice about whether to support a union, and that prevailing wage increases construction costs and reduces local control.
Rep. Graham Filler, R-Duplain Township, argued that opening up contractors to the possibility of third-party lawsuits as prescribed in the legislation is “prevailing wage on steroids.”
“I don’t know why this was included, if they felt that just (restoring) prevailing wage wasn’t enough, that they had to go next level and really make it unattractive to be a business in the state of Michigan,” he said.
What the Data Says
Partisans on both sides of the Right-to-Work debate have wielded studies to support their positions. Studies backed by labor unions show Right-to-Work laws lowered worker compensation, whereas business group-backed research shows the law benefits economic growth.
Manufacturing wages have increased in Michigan, but they have not kept up with inflation. Nationwide, half of the states with the biggest wage increases are Right-to-Work states.
One recent study, which includes Michigan, concludes that Right-to-Work lowers unionization rates and leads to lower wages, in part by reducing the threat of unionization because unions have fewer resources — less money coming from dues — to mount organizing campaigns.
What Happens Now
The laws are slated to take effect 90 days after the legislative session ends, as Democrats didn’t have the two-thirds support necessary for the bills to take effect immediately upon signing.
Democrats likely won’t stop there when it comes to labor policy. Already this term, Democratic lawmakers have introduced legislation that would provide tax incentives to those who pay union dues.
That bill is drawing ire from conservatives and others who say the proposal would amount to taxpayer subsidies of unions.
In past legislative sessions, Democrats have backed dozens of labor-related bills that proposed, among other things:
- Expanding bargaining rights and union protections in education and other sectors
- Increasing the minimum wage to $15 an hour
- Requiring employers to give two-week scheduling notice, a concept known as “predictive scheduling”
- Requiring 30-minute breaks for every five hours worked
- Creating a tax credit to offset costs of child or dependent care
- Giving temporary workers the first opportunity to apply for open permanent positions
- Requiring severance pay for employees affected by company shutdowns or mass layoffs
Legislative Democrats told Bridge in January that all options are on the table now that Republicans aren’t setting the agenda.