Rick Haglund: Why repealing Right to Work is unlikely to hurt Michigan’s economy
Pro-labor activists at the climate protest before the Democratic debate | Andrew Roth
On a bitter December day in 2012, the Michigan Legislature passed legislation — disguised as a measure to give workers more “freedom”— that in reality was designed to strip the financial and political power of labor unions.
Thousands of union members and their supporters protested at the Capitol, but to no avail. Republican lawmakers who controlled the legislature quickly passed the Right-to-Work bills without a hearing in their lame duck session and slinked out of town. Then-Gov. Rick Snyder, a Republican who once said Right to Work was “not on my agenda,” promptly signed the legislation.
Under Right to Work, workers cannot be forced to pay union dues as a condition of employment. But they are still covered by union contracts in unionized shops.
It was a gut punch to the labor movement in a state that gave birth to the United Auto Workers union and played a crucial role in creating the middle class.
But Democrats, who now control the legislature and governor’s office, are vowing to overturn Right to Work. Bills to repeal the law were introduced last month in the House and Senate.
Michigan workers have been dealing with the effects of this unjust law for over a decade, and today we took an important step toward restoring the power for workers to organize and collectively bargain for fair working conditions, which will benefit our entire state.
– Sen. Darrin Camilleri (D-Trenton)
“Michigan workers have been dealing with the effects of this unjust law for over a decade, and today we took an important step toward restoring the power for workers to organize and collectively bargain for fair working conditions, which will benefit our entire state,” said Sen. Darrin Camilleri, a Trenton Democrat who introduced the Right to Work repeal bill in the Senate.
Business lobbyists are unnerved by the prospect of Michigan being once again seen as a union-friendly state. They predict Michigan will become less competitive in attracting business investment, particularly in the manufacturing sector if the state ditches Right to Work.
“Being a Right-to-Work state makes Michigan more competitive with neighboring states and nationally,” the Small Business Association said in a recent news release. “It helps Michigan compete for desperately needed economic development projects and new jobs.”
That’s debatable. There is no clear consensus that Right to Work has had a major impact on job growth in Michigan or other Right to Work states. Dozens of studies have been conducted on the job and wage impacts of Right to Work, and you can easily find one that supports your view of the measure.
It’s also curious that the state’s economic development arm apparently does not tout Right to Work as an incentive for businesses to invest in Michigan. A Michigan Economic Development Corp. spokesman did not respond to my inquiry about whether it uses Right to Work as a recruiting tool and I could find no reference to it on MEDC’s website.
SBAM said labor force and wage growth in the nine years after Right to Work was adopted in Michigan far outstripped the state’s performance in the nine years preceding the law. But the earlier period was a time when Michigan’s automakers were continually downsizing and dragging down many other job sectors.
The auto industry’s strong rebound, which started just a couple of years before Right to Work passed in Michigan, has been a major igniter of state economic growth.
“My analysis of the research is that the effect of Right to Work in the states where it exists has been fairly modest,” said Michael Hicks, a Ball State University economist who has studied the measure. “Essentially, it has resulted in a relatively small number of new manufacturing jobs that are lower paid than the incumbent manufacturing jobs.”
It’s also hard to say whether Michigan’s economy would suffer from repealing Right to Work, Hicks told me. The last state to have done so was Indiana in 1965. The Hoosier state reenacted it 10 months before Michigan passed its version in 2012.
“We don’t really have good evidence of what will happen when [repealing Right to Work] occurs,” Hicks said.
University of Michigan economist Donald Grimes said he doesn’t think revoking Right to Work will have much impact on attracting new business investment in the state.
“I am sure the people making the site selection decisions knew that Right-to-Work status could change with the political winds and if you were making long-term investment decisions you were not going to count on that status remaining indefinitely,” Grimes told the Center Square.
“That may be why there was no readily apparent benefit from having become a right-to-work state in terms of job growth,” he said.
Another reason may be that only a small percentage of private sector workers are union members. Just 9.1% of Michigan private sector workers belonged to a labor union in 2021, according to Unionstats.com.
(Overall, union membership in the state grew last year, according to the Bureau of Labor Statistics, which doesn’t break down public and private union membership totals.)
Hicks said many new manufacturing jobs, such as those in computer chip plants, require at least some college education. And more-educated workers tend to be less interested in joining a labor union than lower-wage workers employed in, say, food processing plants.
Some business leaders fear that neighboring Indiana will steal jobs from Michigan and outbid it for new investment if Michigan repeals Right to Work. Hicks doesn’t think so, particularly if Michigan focuses on talent and livability.
“Indiana’s workforce is not really prepared for the 21st century,” he said. “If Indiana lures a factory of two from Michigan, it’s likely to be a canning or food processing plant. I’m not sure Indiana’s a winner if that’s what happens.”
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