Is Right-To-Working in Michigan? Reflection‏

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by Arthur Christopher Schaper

661px-RickSnyder

Governor Rick Snyder (R-Michigan) passed “Workplace Fairness and Equity”, or right-to-work (RTW) legislation in December 2012, just a month before the next legislative session, and just after the disappointing federal elections.

(Read this clip to learn that 2012 was not so bad for Republicans).

In a public address before the legislative vote, Gov. Snyder outlined and explained his reasons for right-to-work reform in labor-friendly Michigan:

Today I want to talk to you about workplace fairness and equity, often called right-to-work by many people But I think workplace fairness and equity is a better way to describe it, because it’s about being pro-worker, and giving workers the freedom to choose who they associate with.

  1. First, it’s about being pro-worker. It’s about hard-working Michiganders having the freedom to choose who they associate with. I encourage unions to be more proactive in presenting the case as to why it’s good to belong to a union and why people would want to join.

Without right-to-work legislation, employees are forced to join unions, and they have no say in. Many times, union leaders do not bother to explain why employees have to join.

But ultimately, I want to be pro-worker and say: “The worker should have the ultimate decision should they belong or not.”

  1. The second one is about being more healthy in Michigan in terms of our economy. If you look at the numbers, the last two years we’ve done well, we’ve added over a hundred and forty thousand jobs. We’re forecasted to add another hudnre and ten thousands jobs over the next two years over the next two years. But if you add that up, that’s only two hundred and fifty thousand jobs. We’ve lost over seven hundred and fifty thousand jobs during the years 2000 through 2010. I want to see that rate go up to even bigger and better. And when I looked at Indiana, here’s an opportunity to see that pace increase.

So for two good reasons, it’s time to look at workplace fairness and equity in Michigan and be pro-worker.

Right-to-Work (RTW) did not pass without heavy (and violent) resistance from labor unions, but nationally, the reforms received significant support.

Right-to-Work protests in Lansing, Michigan448px-MI_Right-to-Work_Protest_-_11_December_2012_-_crowd3

Libertarian Republican Ron Paul praised right-to-work, and specifically Snyder’s reforms.

Elkhart, Indiana had the highest unemployment in the nation, then had the highest job growth within four years. How did this turn around come about? Manufacturing industries rebounded, but the pro-business government policies, particularly RTW, convinced many business to relocate their headquarter to Indiana (as opposed to Ohio and Michigan).

Would RTW benefit Michiganders and their economy, as Governor Snyder promised?

Pro-Worker

About the rights of workers, however, Snyder’s reforms seem to have paid off.

Reason.com reported that home caretakers finally had a choice whether the Service Employees International Union could represent them or not. Many of them chose to leave. The article reports:

That’s what happened in Michigan. That hard-fought right-to-work law gave home healthcare workers the chance to choose whether Service Employees International Union (SEIU) would actually represent them. Home healthcare workers, who are often family members of the patients they serve and sometimes not even actually paid, were forced by the state beginning in 2005 to accept SEIU as their bargaining representative and pay them dues, which were deducted from state Medicaid checks for the people the workers were serving.

Even if the caretakers was not getting paid, the union was still collecting union dues form the Medicaid checks. Unbelievable and unconscionable, since those taxpayer-funded subsidies were designed for sick, homebound individuals, not unions.

Two residents in Michigan, including a pro-union police officer, felt frustrated because the union they were forced to join did not bargain for better pay or benefits, but just took money, which one resident called “stealing”.

The report continued:

The Mackinac Center calculates that SEIU has skimmed more than $34 million from the Medicaid payments across the state and will lose more than $4 million in annual dues and fees from the plunge in membership. The Mackinac Center is suing to try to get some of those dues the union has already taken back.

MLive reported later on (September 2014) that teacher’s unions must comply with the right-to-work law:

The administrative law judge, Julia Stern, recommended Tuesday that the Republican-controlled Employment Relations Commission order the Michigan Education Association to no longer limit school employees to leaving the union solely in August of each year. She said the law that took effect last year incorporated a federal law interpreted to give public employees the ability to leave their union anytime.

Even though Governor Snyder signed the legislation, unions did not report to their members that could leave or stay, and the Michigan Education Association still maintained an obscure, limited time when employees could opt out.

The ruling directly affects seven employees in four school districts who complained that they were unable to drop their membership after missing a little-known window in 2013. If the decision stands, it could have broader implications for other unions.

Then

The Mackinac Center Legal Foundation and the National Right to Work Legal Defense Foundation filed lawsuits and labor complaints on behalf of the teachers, accusing the union of not publicizing the opt-out period and threatening to send members who unsuccessfully tried to leave in other months to collections for not paying their dues.

In other words, the largest union in the state was not complying with the law. The union even tried to con teachers out of opting out, and sent collectors to harass and intimidate members for their dues.

Michigan became the 24th Right-To-Work State in 2012Michigan_Locator_Map_with_US

Unions are pushing back, and losing, against these reforms, and individuals are enjoying greater freedoms than they had pre-RTW.

The Michigan Policy Network identified immediate consequences of the legislation,  mostly to the unions:

First, it seems that unions’ concerns about a drop off in dues payments were indeed valid.

In fact, labor experts predict that all public sector unions will have the most difficulty collecting dues because of the additional legal restrictions placed on them by right-to-work and other complimentary laws (lawmakers favoring such restrictions typically reserve the harshest sentiment for unions representing government employees) (Haglund, 2012).

Clearly, Snyder’s legislation has expanded the individual liberty of the individual worker, and have impoverished the power of Big Labor (particularly public sector unions).

Even Left-leaning blogs have reported on the investors and businesses which invested in pushing right-to-work in Michigan.

DailyKos referenced a piece from Mother Jones about the eminence grise DeVos family:

Michigan was seen as a test ground for what the DeVos family was attempting to do with its money. The main actor was Dick DeVos who, despite spending $35 million of his family’s money in 2006, still lost by double digits to Jennifer Granholm. After licking his wounds for several years and regrouping, DeVos turned his attention to attacking the main supporters of the Democratic Party: labor unions.

Identifying who and why right-to-work passed in Michigan neither discredits nor validates the reforms. Will these reforms generate the growth envision by Snyder?

Pro Economic Growth

How else has RTW worked out for Michigan?

One General Motors company in Torrance, CA relocated to Michigan in  early 2013:

A General Motors engineering plant in Torrance dedicated to technologies for alternative-fuel vehicles will be relocated to Michigan, company officials said Monday.

The report focuses on the consolidation of costs. Likely RTW figured in the company’s decision to establish new facilities in Pontiac, Michigan as well as consolidation of existing facilities.

In September 2013, Detroit Free Press reported:

As Michigan marks its first Labor Day as a right-to-work state, it’s clear the sweeping changes some predicted on both sides of the emotional debate haven’t happened yet.

That key word “yet” is very important. Economic reforms like right-to-work (combined with the impacts of long-term political stability) are crucial factors determining whether businesses relocate and settle in Michigan.

Michigan’s unemployment rate has dropped to 8.8% in July from 9.3% a year earlier. That’s well above the 7.4% August national rate and second highest below Illinois (9.2%) among the five Great Lakes states.

A modest improvement in job growth, but an improvement nonetheless.

“You need 10 years before you can reasonably measure any impact of the adoption of right-to-work law in any state,” said Michael LaFaive, director of fiscal policy at the Mackinac Center for Public Policy, which supports the law. LaFaive co-authored a report released last week titled “Economic Growth and right-to-work Laws.”

In December 2013, BridgeMi reported that neither Labor nor Business have seen dramatic changes, neither for better nor worse, yet:

But one year after Gov. Rick Snyder signed right-to-work legislation, it has yet to prove either the body blow to labor or the boon to business many foretold. That comes as no surprise to experts like Michigan State University economist Charles Ballard.

The report then concedes that the Labor Movement was already in decline, with union participation reaching all-time lows. One interesting point in the BridgeMI article connected the decline of manufacturing with union participation. One the surface, this correlation is evident as well as obvious. The causation factor merits further discussion, i.e. did union presence cause businesses to close up and flee the state?

Then the article concedes:

Given that the law applies to contracts negotiated on or after last March 28, business relocation experts were not expecting an immediate impact.

As this article was written in December, 2013, one year after RTW passed, the effects did not have time to manifest.

MLive also revealed that employment grew faster than union membership, but that labor membership had not changed dramatically.

A couple of reasons why may include the number of Michigan unions which were not abiding by the law. (See above)

About economic growth, Bruce Walker of the Acton Institute Power Blog reported that Michigan showed some gains in employment and economic growth, but also recognized that other factors contribute to the overall recovery of any state:

From 1971 through 1990, however, right-to-work laws increased average annual employment and real personal income growth by about 0.9 percentage points and increased average annual population growth by 1.3 percentage points. Further, from 1991 through 2011, the effect in each category was slightly smaller than in the previous period, but each was still statistically significant.

From the other comments I have read on columns discussing the impact of Michigan’s RTW law, readers share concerns that more businesses may move in faster, if Snyder wins reelection. His victory in November ensures that another administration in Lansing, Michigan won’t tamper or repeal the legislation. Whereas Indiana had a solid Republican legislature in 2012, post-election another Republican governor, fiscal hawk Mike Pence, greeted a supermajority Republican legislature. Combined with a fiscally conservative political culture which has endured for decades in Indiana, and businesses can trust that their fortunes will not change drastically.

A member of the Labor Relations Board added another element to the discussion:

In most cases, collective bargaining agreements have not yet expired, so workers have not had an opportunity to opt out.

Now that the law is approaching its two year anniversary, though, have there been other marked improvements in the Wolverine State’s business climate?

Toyota is expanding operations in Michigan2013_Toyota_Prius_Persona_Series_(8403072517)

More recent reports suggest yes.

The National Federation of Independent Business argued that Michigan’s higher ranking for economic competitiveness resulted from the right-to-work law. Competitiveness does not mean that more businesses have moved in, though.

Have businesses moved in or expanded operations in Michigan? Yes.

Kalamazoo and Jenison, Michigan have witnessed the conversion of empty storefronts into thriving businesses. Toyota and other foreign auto makers are expanding engineering and direct-procurement employment in Michigan, according to Forbes Magazine. MLive reports that Chinese and Israeli firms are investing in Western Michigan, as well. More entrepreneurs are moving into Michigan, too.

The articles above did not identify right-to-work as a direct reason for the increase in economic investment and job growth, but a pro-business climate does include fewer restrictions on individual employment.

So, is right-to-work working in Michigan? Upticks in business expansion and job growth indicate small advantages, but more time is needed.

Regarding the freedom of the worker to enjoy freedom of association and keep more of his paycheck, RTW has been a rising success.

600px-Right_to_work_campaign_badge,_c.1976

Watch Gov. Snyder December 6, 2012:

Arthur Christopher Schaper is a teacher-turned-writer on topics both timeless and timely; political, cultural, and eternal. A life-long Southern California resident, Arthur currently lives in Torrance.

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