Detroit Regional Chamber > Media Coverage > Right-to-Work: A Decade Later, Law’s Impact on Michigan Remains Murky

Right-to-Work: A Decade Later, Law’s Impact on Michigan Remains Murky

January 4, 2023

The Detroit News
Dec. 28, 2022
Riley Beggin and Jordyn Grzelewski

Charles Bell recalls how bitterly cold it was on the December day in 2012 when he and thousands of other protesters amassed outside the state Capitol in Lansing to protest the passage of a controversial right-to-work law that Republican lawmakers had surprised many by introducing.

He remembers seeing police horses out among the crowds and being pepper-sprayed.

“We did the best we could to bring attention to it, but it happened anyway,” said Bell, 59, who works at Stellantis NV’s Sterling Heights Assembly Plant and is president of United Auto Workers Local 1700 in Warren. “I just don’t see why it should be so difficult for people to get together and join a union so they can have better conditions, better pay and benefits. They make it so hard.”

In the December 2012 “lame duck” period between the election and the start of the new Legislature, Republicans in Lansing approved an overhaul of the state’s labor policy, allowing workers to choose whether to pay union dues in unionized workplaces.

Because unions are legally required to represent all employees, the policy allows workers to benefit from union representation without supporting it financially. Opponents of right-to-work policies, like Bell, say this weakens organized labor and hurts workers, while supporters like Brian Pannebecker of Harrison Township say it makes unions more accountable and fosters a more competitive business environment.

Pannebecker said as a UAW member, he was frustrated by the union’s liberal political stances and what he saw as a corrupt, unresponsive leadership.

“They weren’t representing us. They were taking care of themselves and lining their own pockets, and a lot of guys were sick and tired of it,” he said. “So we passed right-to-work so that we could hold our elected union officials accountable. And it achieved pretty much everything we had hoped for. We gained the right to hold them accountable by resigning from the union and not being forced to pay dues anymore.”

Democrats, who enjoy the lion’s share of union support, have been in the minority in Lansing ever since. Michigan has remained one of 27 right-to-work states in the country.

But 10 years later, Democrats’ fortunes have changed: They swept the ballot last month, retaking both the state House and Senate for the first time in nearly 40 years while keeping control of the governor’s office.

Incoming leaders in each chamber have signaled that repealing right-to-work is a priority, to the delight of labor advocates — and amid calls for caution from major business groups.

“They’re going to do it. They have the votes to do it. The question is how soon they do it,” said Adrian Hemond, CEO of the Lansing-based consulting firm Grassroots Midwest and a Democrat. “A lot of folks in organized labor would like it to be House Bill number one.”

Right-to-work’s Impact

A decade after Michigan became a right-to-work state, there is little consensus on its legacy. Most political analysts, economists and labor researchers who spoke with The Detroit News said it’s tough to say with certainty how right-to-work policies impact state economies.

That’s because most research on right-to-work states hinges on long-term analyses of southern states that adopted the policy decades ago in a different economic climate, said Tim Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo.

Other research compares border counties in right-to-work and non-right-to-work states, which provide a snapshot of local economies but don’t reasonably represent entire states, he said.

“There are many different things in the state that can drive economic development,” Bartik said, such as the quality of the local labor force, the availability of land for development, and infrastructure. “So it can be challenging to definitively come up with an answer.”

A recent study of border counties by graduate student researchers at Harvard University found a higher share of manufacturing jobs, increased labor force participation, reduced unemployment and higher in-migration in states with right-to-work laws.

Another study compared Michigan and other late-stage right-to-work laws with non-right-to-work states and found a small decrease in both wages and unionization rates, according to recent research.

That is one area where researchers usually agree: Right-to-work laws chip away at unions.

“Union organizing costs time, money and resources,” said Victor Devinatz, a professor at Illinois State University specializing in labor relations. When people are able to benefit from unions without paying dues, they’re disincentivized from joining, leaving the union with fewer resources to function, advocate and expand.

Economists agreed that a decline in unions can also impact wages in individual workplaces because union members are generally paid more than their non-union counterparts.

But they disagreed on what the impact is for wages overall — some said higher unionization has a “threat effect” in which companies raise wages to prevent union campaigns and compete with other companies. Others said higher unionization reduces overall wages because the high wages paid to union workers cause companies to hire fewer people, leaving more people to compete for the remaining non-union jobs, driving labor prices down.

Michigan’s Trajectory

Over the decade Michigan has had a right-to-work law, unionization rates in the private sector dropped from 11.3% in 2012, when the law was passed, to 9.1% in 2021, according to data from researchers at Georgia State University and Trinity University. When including public sector workplaces — which retain much higher unionization rates — Michigan’s unionization rate dropped to 13.3% in 2021 from 16.6% in 2012.

In that time frame, wages have risen, according to the Bureau of Labor Statistics. The average weekly wage at the end of 2012 was $954, compared with $1,290 at the end of 2021 — the equivalent of $1,062 in 2012, when adjusted for inflation.

Employment has also increased. From March 2013, two months before the right-to-work law went into effect, to September 2022, employment rose 8.3%.

By comparison, in Michigan’s non-right-to-work neighbor Ohio, employment grew by 5.3% in that time frame. But Ohio’s average weekly wage, when adjusted for inflation, grew 13% compared to Michigan’s 11%. Both failed to keep pace with growth in the nation’s average weekly wage adjusted for inflation, which was 16.7%.

Like Michigan, Ohio’s overall rate of union membership dropped, from 13.4% in 2011 to 12% in 2021.

It’s difficult to distill the impact of right-to-work, however, amid a decades-long trend of declining union membership in the U.S. Just 10.3% of wage and salary workers were members of unions last year, according to federal data, down from 20.1% in 1983, the first year for which there is comparable data.

“Right-to-work is one of the most vivid symbols, to both employers and unions, about the laws in the state and whether they favor the ability of employers” to hire, move and open or close operations without bargaining with unions, said Patrick Anderson, CEO of Anderson Economic Group.

He added there are “without question” companies that have come to Michigan since the law passed, but said businesses won’t admit publicly that they chose a state based on its labor laws.

Between 2011 and 2021, Michigan’s per capita GDP grew 3.5% while Ohio’s grew 3.4%.

And while Michigan has drawn significant investment — $7 billion from General Motors Co. and $2 billion from Ford Motor Co. this year for electric vehicles and other projects, for example — Ohio won a $20 billion investment that could grow to $100 billion from chip-maker Intel in January.

A recent analysis by Business Leaders for Michigan found Michigan ranked 31st of 50 states for business-related metrics including CEO business climate perception and labor force participation rate. Ohio ranked 23rd.

All told, right-to-work has had some effect — but it’s not notable, said Charles Ballard, a former economics professor at Michigan State University.

“The causation here is important to keep in mind. We didn’t get right-to-work and then unions became weak,” he said. “Unions weakened. And weakened and weakened and weakened. And then we got right-to-work because unions weren’t as politically powerful as they once were.”

Harley Shaiken, a labor expert based at the University of California Berkeley, said that right-to-work laws serve to diminish unions’ power further.

“It does what it’s designed to do: to weaken unions, to starve them of dues money,” he said. “And what that does is it diminishes unions’ powers politically by essentially cutting the money that they are able to get and weakening labor more generally. It influences politics, without question.”

Labor Law Overhaul

In December 2012, the wounds of the Great Recession were still fresh. Hundreds of thousands of jobs had been lost and the state’s economic driver — the auto industry — had come to the brink of extinction. Economic anxiety was high.

Two years earlier, as right-to-work laws gained in popularity, former Gov. Rick Snyder was elected as a moderate Republican who pledged repeatedly not to upend the status quo. He said right-to-work laws weren’t on his agenda because they were “too divisive” in the state’s slowly recovering economy.

Then the United Auto Workers and other unions backed a ballot initiative in 2012 to preemptively ban right-to-work laws by putting a right to collective bargaining in the state constitution. It failed 57%-42% in a statewide vote.

Snyder, through a spokesperson, declined to be interviewed for this story. But at the time, both he and union leaders pointed to the other for an explanation: Snyder said he tried to broker a compromise but had to side with the GOP-led Legislature after the ballot initiative. Union leaders said they had to put forward the ballot initiative to protect from the threat of right-to-work.

Meanwhile, earlier that year, Indiana had become a right-to-work state. Business leaders warned it would begin poaching jobs and investments that would otherwise go to Michigan.

“All at once the idea of Michigan, the home of America’s labor movement, becoming a right-to-work state went from something that you might wish for … to a very real, very serious question of the state’s economic competitiveness,” said Rich Studley, former CEO of the Michigan Chamber of Commerce and a proponent of right-to-work at the time.

Snyder announced the plan to pass right-to-work the morning of Dec. 6, and bill language was made public hours later. By the end of the day, the bill had passed the state House without committee hearings and thousands of union supporters had come to the state Capitol to protest. It was signed into law within a week.

Advocates, like Studley, argued the policy had undergone “months of high-profile, spirited debate” as voters considered the merits of the ballot initiative. But UAW President Ray Curry told reporters at an event earlier this month that he wants to see the law repealed in part because of how it was passed.

He contended that right-to-work laws have not been an impediment to the Detroit-based union’s organizing efforts across the country or had a significant impact on membership levels in Michigan. Still, he is fully supportive of repeal efforts.

“It’s important to repeal it,” Curry said. “In a dark hour, this was (passed) as legislators were actually exiting (the Capitol). And if you think about how that legislation played out … what was the point of doing it?”

Though private-sector union membership in Michigan has declined in the last decade, some right-to-work proponents and advocates agreed that the law alone has not had a catastrophic effect on unions like the UAW.

Bell, the UAW Local 1700 president, said he’s seen only a small number of members opt out of paying dues. Pannebecker, who opted out after right-to-work went into effect, noticed a similar trend at his plant — but he argued the effect was to make the union more accountable to rank-and-file members.

“It didn’t mean that they were going to get out of the union or the union was going to collapse,” said Pannebecker, who was a spokesperson for Michigan Freedom to Work, a group that lobbied for right-to-work. “What it meant was, the union reps, people in the plant, had to listen to us — because now the union members had the power.”

Meanwhile, Jennifer Root, executive director of SEIU Michigan, said that the law’s passage a decade ago “felt like a gut punch” for many members — and the prospect of repealing it motivated them to get involved in political organizing.

Mary McClendon is a certified nursing assistant at a nursing home and a steward with SEIU Healthcare Michigan who volunteered as a member political organizer during this year’s election in part because of right-to-work. She said right-to-work has been “horrible” for the state and driven down wages.

“It’s making it hard for workers like myself to try to even form strong unions,” she said. “We need to repeal (it so) wages can be raised across the board and create better jobs that allow people to support their families and live with dignity and pride. We need it, and we need it now.”

What’s Next

Democratic Gov. Gretchen Whitmer, a state senator in 2012, at the time called the legislation “petty and vindictive politics at its most disgusting.” A spokesperson for her office did not directly comment on whether she would sign a right-to-work repeal or if it should be a priority next year, but said Michiganians “sent a strong message in the election” that they want a governor and Legislature “who will get things done and deliver results.”

“There’s a lot of work ahead of us, but Governor Whitmer is going to keep her foot on the accelerator to get it done,” spokesperson Bobby Leddy said via email.

State Rep. Joe Tate, D-Detroit, the incoming Speaker of the House, did not respond to a request for comment but has signaled an openness to re-evaluate right-to-work.

In a statement, incoming Senate Majority Leader Winnie Brinks, D-Grands Rapids, contended that Michigan’s right-to-work law is unpopular and said state government leaders “will be bringing folks to the table to evaluate all options to make Michigan a place where workers want to come and stay.”

Many of the state’s leading business groups — the Michigan Chamber, the Grand Rapids Chamber and the Small Business Association of Michigan — have urged Whitmer and Democratic leaders in the state Legislature not to make a change.

“Michigan needs to be poised for continued growth and opportunities to support businesses (and in turn, families and communities) of all sizes in the years ahead,” said Wendy Block, vice president of business advocacy and member engagement at the Michigan Chamber. “Repealing Right to Work would be a step backward for the state and hardworking Michiganders.”

Sandy Baruah of the Detroit Regional Chamber said the group considers it to be “settled Michigan law and not a policy priority,” and Randi Berris with Business Leaders for Michigan urged leaders to focus on “key issues that will make us a Top 10 state” such as K-12 education, talent retention and economic competitiveness.

Earlier this month, the Detroit Regional Chamber released the results of a statewide poll of registered voters suggesting that repealing right-to-work is not top-of-mind for many. Half of respondents were neutral or undecided, while 28.6% were in favor of overturning the law and 21.5% were against it.

Meanwhile, workers like McClendon, of SEIU Healthcare Michigan, vowed to hold members of the incoming Democratic majority to their promises.

“I want to see real changes in our lives in the communities,” she said. “We have put these people in office. They have made promises. Now, we want you to hold true to your promises.”