Michigan Becomes Twenty-Fourth Right-To-Work State
Approximately 17.5 percent of Michigan workers are dues-paying union members, making it the fifth most unionized state in the nation. Michigan is one of the least likely candidates to adopt right-to-work legislation. However, on Tuesday, December 11, 2012, the Republican Governor of Michigan, Rick Snyder, signed Public Acts 348 and 349 of 2012 into law, making Michigan the twenty-forth right-to-work state. This is a stunning development in the home state of the United Auto Workers (UAW), considered to be a strong, pro-labor state.
Right-to-work laws prohibit union contracts from requiring employees to pay any dues or other fees to the union, a move that often reduces union membership and dues revenues. In states without such laws, workers at unionized workplaces generally are required to pay such dues or fees even if they do not wish to join the union. This is sometimes referred to as a closed shop arrangement. The following states are right-to-work states: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming.
Voter Rejection of Proposal 12-2
In 2012, the Michigan organized labor community strongly believed in the strength of the support for unions in the state that they sought to amend the State Constitution to “enshrine” the right to bargain collectively. On November 6, 2012, voters in Michigan were asked to vote on “Proposal 2-2.” The ballot read as follows:
Proposal 12-2: A Proposal to Amend The State Constitution Regarding Collective Bargaining
This proposal would:
- Grant public and private employees the constitutional right to organize and bargain collectively through labor unions.
- Invalidate existing or future state or local laws that limit the ability to join unions and bargain collectively, and to negotiate and enforce collective bargaining agreements, including employees’ financial support of their labor unions. Laws may be enacted to prohibit public employees from striking.
- Override state laws that regulate hours and conditions of employment to the extent that those laws conflict with collective bargaining agreements.
- Define “employer” as a person or entity employing one or more employees.
- Should this proposal be approved?
Supporters of Proposal 12-2, predominantly labor unions and labor controlled political action committees, spent approximately $23 million urging Michigan voters to adopt Proposal 12-2. The effort to adopt Proposal 12-2 energized opposition groups. Governor Snyder, business groups, the Chamber of Commerce, and conservative groups aggressively campaigned against the adoption of Proposal 12-2. Proponents had a significant lead at first, but that has eroded as business-backed groups have escalated their attacks. A Detroit news poll, released on October 12, 2012, found that 43.2 percent of the 600 people surveyed supported the proposal, and 41.8 percent opposed it. However, on Election Day, Michigan voters overwhelmingly rejected Proposal 12-2:
In the same election, voters in Michigan enthusiastically returned President Barack Obama to office:
Republican Presidential Candidate Mitt Romney received more votes in Michigan than Proposition 12-2 did. It was a shocking defeat for organized labor, which had placed a high priority on the passage of this proposal.
Adoption of Right-to-Work Legislation
Governor Snyder reported that he urged labor leaders not to place Proposal 12-2 on the ballot for the same reason he successfully, previously urged Republican legislators not to introduce right-to-work legislation — the issues are highly divisive. However, after soundly defeating Proposition 12-2 at the polls, on December 1, 2012, Republicans in control of the Michigan State Senate took up a public sector right-to-work bill that had been passed in the spring by the Republican controlled House of Representatives and moved a private sector right-to-work bill out of committee on December 6, 2012. The Republicans in the Michigan Legislature moved quickly, and on December 11, 2012, the legislature has passed both bills and presented them to the governor. The right-to-work legislation sped through the Michigan Legislature without public discussion, committee hearings, or any Democratic support. Despite thousands of union supporters descending upon the Capitol in protest of the legislature, Governor Snyder signed both bills during the evening of December 11, 2012, the same day that it passed the legislature, making Michigan the twenty-fourth right-to-work state. Indiana became the twenty-third right-to-work state in February 2012.
Michigan Public Act 348 of 2012, which applies to private sector employees in Michigan, provides that:
An individual shall not be required as a condition of obtaining or continuing employment to do any of the following:
- Refrain or resign from membership in, voluntary affiliation with, or voluntary financial support of a labor organization.
- Become or remain a member of a labor organization.
- Pay any dues, fees, assessments, or other charges or expenses of any kind or amount or provide anything of value to a labor organization.
Similarly, Michigan Public Act 349 of 2012, which deals with public sector employees, except for police officers and fire fighters, provides:
No person shall by force, intimidation, or unlawful threats compel or attempt to compel any public employee to do any of the following:
- Become or remain a member of a labor organization or bargaining representative or otherwise affiliate with or financially support a labor organization or bargaining representative.
- Refrain from engaging in employment or refrain from joining a labor organization or bargaining representative or otherwise affiliating with or financially supporting a labor organization or bargaining representative.
- Pay to any charitable organization or third party an amount that is in lieu of, equivalent to, or any portion of dues, fees, assessments, or other charges or expenses…
These new laws take effect 90 days after the legislature adjourns.
Research suggests that employees in right-to-work states have lower wages, on average, than their counterparts elsewhere. According to Richard Hurd, professor of labor studies at the ILR School at Cornell University, that is because unions are weaker in right-to-work states and aren’t as effective in bargaining for higher wages. On average, only two-thirds of workers join unions in right-to-work states. The average full-time, full-year worker in a right-to-work state makes about $1,500 less annually, according to the Economic Policy Institute, a left-leaning organization. The rate of workers covered by employer-sponsored health insurance is 2.6 percentage points lower, while pension coverage is 4.8 percentage points lower. On Tuesday, December 11, 2012, before the legislature passed the right-to-work laws, President Obama called the legislation the “right-to-work for less.”
It is estimated that given the option, approximately one third of bargaining unit members in a right-to-work state will refuse to join the union or pay union dues. The effect in Michigan may be that the number of dues-paying union members falls from approximately 659,000 to under 440,000, causing unions in Michigan to lose one-third of its revenues and close to one-third of the contributions to the political action committees controlled by those unions. Loss of members and money equates to the loss of clout for the UAW and other Michigan labor unions.
Under Michigan law, opponents of the right-to-work laws have ninety days to obtain signatures on petitions totaling at least 8 percent of the votes cast in the state’s last gubernatorial election to force a public referendum on these laws. It is expected that unions will pursue that option, in addition to seeking the recall of the Governor and legislative members that supported the bill.
Next Stop for the Right-to-Work Movement
Looking at the map, Alaska, Ohio, and Wisconsin appear to be ripe targets for right-to-work advocates. These three states are rank among the top 20 states in terms of unionization.
|State||Union Members||Percent of Workers||Ranking|
All three states are controlled by Republican Legislatures and Republican Governors:
|State House Party Enrollment|
|State||House of Representatives||Senate||Governor|
None of these three states showed as much support for President Obama as Michigan did. In Michigan, President Obama beat Romney by nine points. Romney defeated President Obama by 14 points in Alaska, and President Obama only beat Romney by 1.9 percent in Ohio and 5.7 points in Wisconsin.
|2012 PRESIDENTIAL ELECTION RESULTS|
Alaska, Ohio, and Wisconsin all appear to be better candidates than Michigan for passing right-to-work legislation. Alaska, Ohio, and Wisconsin are all more Republican than Michigan. While Ohio and Wisconsin have significant union member population, they are not as heavily unionized as Michigan. Wisconsin Governor Scott Walker did not rule out signing a right-to-work bill into law in his state; however, he did publicly state that he would not push the adoption of right-to-work legislation as part of his agenda. Ohio Governor John R. Kasich, a Republican, has said making Ohio a right-to-work state isn’t a priority. However, Kasich has not opposed it either causing Ohio Democrats to quickly call on him to do it in a “crystal-clear” way. Alaska last considered right-to-work legislation in 2011, when it failed to make it out of the Alaska House of Representatives.
There is virtually no chance that New York will even entertain discussion on the adoption of a right-to-work law. New York has the highest percentage of unionized workers at 24.1 percent. The New York Assembly is solidly in control of the Democratic Party, and although Republicans share control of the State Senate with a small group of Independent Democrats, the number of Democrats outnumbers Republicans in the State Senate. President Obama beat Romney by 26.6 points in the 2012 election, so voters may be characterized as liberal leaning. New York Governor Andrew Cuomo, a Democrat, has strong ties to organized labor and considers himself to be a supporter of the organized labor movement.
Union Membership at a Glance
Union membership in the United States is near an all time low. The United States Bureau of Labor Statistics issues an annual report on union membership. On January 27, 2012, the Bureau of Labor Statistics reported that the union membership rate in 2011 (percent of wage and salary workers who were members of a union) was 11.8 percent, essentially unchanged from 11.9 percent in 2010. The number of wage and salary workers belonging to unions was reported to be 14.8 million. By comparison, in the first year for which comparable union data are available, 1983, union membership was 20.1 percent and there were 17.7 million union workers.
Just 6.9 percent of private sector employees are union members, compared to 37 percent of public sector workers. Education, training, and library employees have the highest unionization rate at 36.8 percent. The lowest union membership rate occurs in sales and related occupations (just 3.0 percent). New York State is first in the nation in terms of unionization as 24.1 percent or workers are union members. North Carolina has the lowest unionization rate of any state at 2.9 percent.
The Michigan victory for the right-to-work movement has paved the way to seek similar reform in other Republican controlled states. Additional successes could result in significant losses of union membership, revenue, and influence, which will make it difficult to continue the difficult task of organizing workplaces. If this momentum continues and spills into Wisconsin and Ohio, New York may find itself in a competitive disadvantage with its neighbors in the competition to lure new business development in the state. New York has suffered from this comparative disadvantage as it has lost business and industries to North Carolina, South Carolina, and Florida, yet it has not even considered the adoption of right-to-work legislation. It remains to be seen whether New York voters and elected officials will feel the same if it starts to lose business to its neighboring right-to-work states.
For more information on the impact of this decision, please contact:
- Sean P. Beiter (716.566.5409; email@example.com)
- Or another member of Goldberg Segalla’s Labor and Employment Practice Group