Michigan’s Republican-controlled House and Senate forced through “right-to-work” legislation on Dec. 6, making the Great Lakes State the latest battleground over worker rights. The move, of course, comes after recent GOP-led anti-union measures were passed in Wisconsin and Indiana. Michigan stands to join 23 other states with RTW laws, which make it illegal for collective bargaining agreements to require nonunion employees to pay fees (even though these nonunion employees get all of the same benefits as their unionized peers under negotiated contracts).
Since the actual effect of RTW laws is to restrict workers’ rights – by making it illegal for them to enter voluntary contracts with unions to collect union dues – the name is misleading. Even more misleading, however, are claims that these laws boost a state’s economy.
Union members and their supporters are well aware of RTW’s consequences, which is why large numbers of them – shocked by the lack of transparency and speed with which Republicans advanced the “Workplace Equity and Fairness Act” – protested at the State Capitol in Lansing. In fact, the bill’s details weren’t made public until it was read on both the House and Senate floors. Rules, however, mandate a five-day gap between votes in the two chambers that are on the same legislation, so enactment came the next week.
After two years in office of denying that RTW was on his agenda, Gov. Rick Snyder confirmed that he would sign the measure. According to the AP, Snyder pointed to reports that almost 90 companies have set up shop in Indiana (not true, by the way) after that state enacted RTW.
“That’s thousands of jobs, and we want to have that kind of success in Michigan,” said Snyder.
But this won’t be the case. Proponents love to claim that RTW laws significantly improve job growth and workers’ wages. The evidence, however, shows the exact opposite of these claims to be true. EPI’s Sept. 2011 paper, ‘Right to work’: The wrong answer for Michigan’s economy, highlighted several reasons why RTW doesn’t work:
- RTW doesn’t boost economic growth. There’s no relationship between RTW laws and a state’s unemployment rate, per capita income, or job growth.
- RTW has no significant impact on attracting employers to a state. Surveys show RTW as a minor or non-existent factor for employers when they’re considering locations.
- RTW lowers wages. Both union and nonunion workers earn an average of $1,500 less per year in RTW states.
- RTW threatens employment benefits. Workers – both union and nonunion – are less likely to have either health insurance or pensions through their jobs in RTW states.
RTW cuts wages and threatens to undermine job growth by reducing people’s discretionary income. When people have less discretionary income, they spend less, which in turn hurts the economy.
Since non-manufacturing industries make up 85 percent of Michigan’s economy, widespread wage and benefit cuts as a result of going RTW will have a significant negative effect on economic conditions, without providing any plausible boost to the competitiveness of companies that remain or open up in Michigan.
(The Economic Policy Institute is a labor-backed think-tank).