Michigan lawmakers gave final approval to the state’s first right-to-work laws today amid the unhappy chants of protesters gathered outside the state capitol. Gov. Rick Snyder quickly signed both bills, one for the private sector and another for government employees.
Among other things, the laws would prohibit forced union membership. Supporters, including Republican leaders in the legislature and the Michigan Chamber of Commerce, say it will create a better business climate and allow employees freedom of association. But critics condemn the bills for attempting to cripple unions’ ability to negotiate for better wages while allowing nonunion workers to get perks without paying for them.
Earlier this week, President Barack Obama criticized the laws, saying it would only dissolve workers’ rights to bargain for better wages and working conditions. Right-to-work bills are more about "giving you the right to work for less money,” he told cheering factory workers at a Michigan engine plant on Monday. But despite opponents’ claims, a Mitchell poll released earlier this month revealed that 40 percent of union households support the legislation.
Michigan becomes the 24th state with right-to-work laws. Although the legislation wasn't originally on his agenda this year, Snyder told reporters at a press conference last week he had been impressed by results in Indiana, another Rust Belt state that enacted a right-to-work law earlier this year.
“They've had 90 companies in the pipeline for economic development say this was a factor in deciding to look to come to Indiana," he said. "That's thousands of jobs. We need more and better jobs in Michigan.”
According to a Heritage Foundation analysis, right-to-work laws generally attract more business investment by ensuring that companies won’t have to worry about unions organizing and descending on their employees with forced memberships and expensive demands. As a result, manufacturing jobs abound and unemployment is lower in right-to-work states.
But right-to-work laws are highly unpopular with union leaders in Rust Belt states, where labor lobbyists have maintained union strongholds for years. Membership dues allow unions to hold significant influence over politicians and employers, influence that will weaken without the $100 million brought in annually by mandatory dues.
Last year, Wisconsin Gov. Scott Walker passed a stronger series of workplace and union reforms, including a ban on forced-membership; limits on bargaining rights; and a requirement for workers to start paying more of their income towards pensions and health insurance. The criticism that surfaced then is emerging now: right-to-work laws push wages and benefits lower, opponents say.
But those predictions have not come true in Milwaukee. The city is saving money on healthcare and pension costs and will come out $11 million ahead of budget this year. The law also freed up the healthcare bargaining process, allowing school districts to start bidding on the open market and forcing their usual providers to lower their rates.
Walker succeeded in passing his reforms in March 2011 and survived a recall election brought by opponents earlier this year. But the law now faces a series of lawsuits that could eventually bring it before the U.S. Supreme Court.
The conservative Mackinac Center for Public Policy in Michigan says compensation in right-to-work states can be even higher than elsewhere when costs of living are considered. A study by the Indiana Chamber of Commerce found personal income grew more between 1977 and 2008 in right-to-work states than in states with no right-to-work laws.
Right-to-work supporters like Gov. Snyder contend the laws are huge steps towards economic growth: “It’s about being pro-worker. It’s about hard-working Michiganders having the freedom to choose who they associate with. … The workers should have the ultimate decision should they belong or not.”