One year later, Right to Work results uncertain

The predictions were both dire and dramatic.

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.

“This is not a game-changer because the game had already changed,” Ballard said.

Ballard noted that unions were in decline well before Michigan joined 23 other states with right-to-work provisions. The law, signed Dec. 11, 2012, says that public and private workers cannot be compelled to join a union or pay dues as a condition of employment.

By then, union membership in Michigan had fallen from 919,000 in 2003 to 629,000, according to the U.S. Bureau of Labor Statistics. Union members accounted for less than 17 percent of wage and salary workers in 2012. In 1989, they accounted for 26 percent. It was 45 percent in 1964.

“The other forces that have weakened unions for the last 60 years are far more important than this. If you draw a graph, the decline of manufacturing looks a lot like unions as a percentage of the labor force,” Ballard said.

As for business, it is hard to find evidence the measure has sparked new outside investment. Ten days after he signed the law, Snyder said the “phone's already been ringing” at the Michigan Economic Development Corporation office from outside inquiries.

Asked to identify any projects landed because of right-to-work, MEDC spokesperson Emily Palsrok cited none and instead issued a statement that said Michigan's business climate is “significantly improved” because of measures including business tax cuts, deregulation and right to work. Those have led to economic growth and the addition of 200,000 jobs since 2009, she said.

“These results are attributable to the full range of improvements listed and we know of no way to distinguish among them,” Palsrok said.

Michigan’s employment rate, meanwhile, remains relatively unchanged since the law was passed. The rate stood at 8.9 percent last January, and was 9 percent in October – compared with a national unemployment rate of 7.3 percent.

No results yet

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

“On a lot of these projects, it's not uncommon to have a one-or two-year time frame. It takes a bit of time for these projects to come through,” said Tracey Hyatt Bosman, managing director for Biggins, Lacy Shapiro & Co., a New Jersey-based corporate site selection firm that does work in Michigan.

Bosman said right-to-work status is one of many factors firms weigh in relocation decisions. But she said for some firms, particularly manufacturers, Michigan might get a look it would not otherwise enjoy. “A number of clients will say, 'Don't even look at someplace that's not right to work,'” Bosman said.

Supporters of the measure counsel patience in looking for results.

Earlier this year, Michael LaFaive, director of fiscal policy for the Midland-based Mackinac Center for Public Policy, a conservative think tank, said it takes “10 years before you can reasonably measure” its impact in a state.

In the meantime, the battle continues over its implementation within the public sector.

A group of public school teachers filed an unfair labor practice lawsuit in October, claiming the Michigan Education Association, the state’s largest teachers union, withheld information about how teachers could opt out of the union. They are backed by the legal arm of the Mackinac Center.

The MEA dismisses the claim as groundless. It also maintains that 99 percent of its 150,000 active and retired members are holding firm with the union.

Under MEA bylaws, members can only elect to leave the union during the month of August. The teachers in the suit said they tried to leave in other months and were unaware they could only do so in August.

Doug Pratt, spokesman for the MEA, said the opt-out provision - if not widely known - has been included in membership contracts for 40 years. As to any obligation to publicize that information, Pratt said: “Membership organizations don't work that way. We don't market how to quit.”

Indeed, many MEA local chapters scrambled to extend contracts with school districts, often in exchange for concessions, days before right-to-work took effect. MEA President Steve Cook estimated that as many as 30 percent of the union's teachers are covered by such contracts.

Other unions are battling the law's application to more than 31,000 unionized state workers, claiming it violates their protection under the state Civil Service Commission. The matter is on appeal to the State Supreme Court.

Right to work won't affect United Auto Workers employees in Michigan until after 2015, when the UAW contract with the Big Three automakers expires.

The impact of right-to-work on other unions:

  • The Michigan chapter of the American Federation of Teachers, which represents 35,000 members, reported “minimal” effect on its members. It provided no specific numbers.
  • SEIU Local 517M – which represents 8,600 school and state and local government workers – said the union has lost “less than 15 percent” of its members.
  • The Michigan AFL-CIO – which represents 1 million active and retired members – said it has “not seen a significant effect so far.” It provided no specific numbers.

Karla Swift, president of Michigan AFL-CIO, added: “We are deeply concerned that wages and benefits for all workers, not just union workers, could decline as they have in other RTW states.”

But economist Ballard said it is difficult to isolate the measure among many factors that affect economic development in a state. Those can include the education level of workers, natural resources, tax rates, infrastructure and community quality of life.

Analysis in 2011 by PolitiFact, a fact-checking project of the Tampa Bay Times newspaper, found that the unemployment rate in 22 right-to-work states was 9.17 percent compared with 9.65 percent in 28 non-right-to-work states.

In general, wages in right-to-work states are below those in non-right-to-work states. Ballard's own breakdown of per capita annual income in 2011 found that workers in non-right-to-work states average more than $6,000 more in income, at $44,515, compared with $38,046 in right-to-work states.

“You have to ask yourself, 'What states should we emulate? What are the right-to-work states?' They are disproportionately poor.”

Divide remains

Conclusions about right-to-work’s impact on workers and the economy often follow ideological lines.

The Economic Policy Institute, a Washington D.C. think tank funded in part by labor unions, concludes that right-to-work legislation lowers wages while not contributing to job growth. The Heritage Foundation, a conservative think tank, asserts that it leads to job growth and economic development.

While Ballard said the legislation could have “some effect” in driving down wages in Michigan, he sees deeper political motives behind its passage.

“Supporters of right-to-work felt compelled to represent it as something that was an economic move. You couldn't very well say, 'Why are we doing this? To reward my political friends and punish my political enemies.' That doesn't make a very good press release.”

A survey conducted by MSU earlier this year found state residents evenly divided about right-to-work's impact, with 43 percent convinced it would help the economy and 41 percent believing it would hurt.

At the time the legislation passed, there were considerations in Democratic Party circles to back a ballot initiative in 2014 to overturn the measure. That talk has quieted.

Asked if that was still under discussion, Democratic Party spokesman Josh Pugh said only: “We are focused like a laser on electing Democrats in the 2014 ballot.”

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Tue, 12/10/2013 - 8:53am
I am TRYING to figure out WHY after only a year, you (or anyone) questions the progress of this initiative when we had FIFTY YEARS OF JOB KILLING hostile unions preventing job growth!
Tue, 12/10/2013 - 10:39am
What you really have to love is that every mention of the Mackinaw Center or Heritage Foundation is always tagged as "the conservative"___ etc. But the MEA or Charles Ballard (both on the left side of the spectrum) are treated as nonpartisan, disinterested innocents floating around in a bubble of non- ideological public goodness! Why is this? Maybe as compared to "the Bridge" they are?
Guy Snyder
Tue, 12/10/2013 - 11:05am
How soon conservatives forget that Governor Rick Snyder and Michigan's Republican Party one year ago were promising near immediate economic relief by the adoption of "right to work" laws. It hasn't happened. Waiting ten years for an impact yields no confirmable and attributable results. Other economic factors will determine improvement or decline, especially at the national level. I knew the Republicans were wrong when these promises were made and, by and large, it appears they haven't learned anything over the past 12 months.
Tue, 12/10/2013 - 12:13pm
Hey Guy, please show us where that promise is. Most conservatives (and Libertarians) I know are fairly skeptical about the existence of any golden bullet that can turn something as big as the economy around in a year. I must have missed it and I'm sure I'm no the only reader who'd like to see it.
Thu, 12/12/2013 - 12:27pm
Matt, are you working?
Thu, 12/12/2013 - 4:38pm
Not sure at what time you are referring, but at that time of your question, I suspect I was eating lunch?
David Waymire
Tue, 12/10/2013 - 6:38pm
It takes 10 years....hmmm....well here is the list of the poorest states in the nation measured by per capita income. Most have been RTW for longer than 10 years. So I guess...the results are in. Anyone looking at RTW that doesn't take out the oil states is trying to fool folks. North Carolina RTW forever Indiana RTW (but only recently. It has a way to go...down) Georgia RTW forever Arizona RTW long time Alabama RTW forever New Mexico (an exception) Kentucky (Another exception, but trying to become RTW) Arkansas RTW Utah RTW West Virginia (Getting there...just keep breaking the coal unions...) South Carolina RTW Idaho RTW Mississippi RTW High per capita income states Connecticut Nope Massachusetts Nope New Jersey Nope New York Nope Maryland Nope North Dakota RTW...but it's all about oil Wyoming RTW...and oil. Virginia RTW...but it's all about Washington, DC New Hampshire Nope Alaska Oil Minnesota Nope Washington Nope I believe, according to Mr. LaFaive, we can call this experiment over. And we can bet on which way Michigan will be going. Unless, of course, we discover oil. Or move the federal government to Michigan.
Wed, 12/11/2013 - 11:17am
David, If you want to take out oil states shouldn't you also take states that have benefited from being or being bedroom communities to huge financial service or regulatory centers (Maryland is also a DC bedroom community)? Not that these states are generally heavily unionized either. In that light, there goes almost every state you just listed on the high income side. So your point that RTW vs Non RTW states are poorer, isn't as valid as saying NonRTW states are just bluer.
David Waymire
Wed, 12/11/2013 - 1:54pm
I'm just saying, Matt, that if RTW were the key to prosperity, as advocates claim, at least some of the states at the top would be RTW without the help of oil or the federal government. But they are not. And at the same time, you would expect there to be NO states at the bottom that are RTW. Instead, the top states are those with large numbers of college grads. And you get large numbers of college grads by preparing, attracting and retaining those grads. You do that by providing them with good schools, safe cities, good mass transit, nice parks/museums/amenities, good colleges -- which means, for better or worse, higher taxes. Which was the real point of the defund the left, and make it harder and harder to raise taxes. But when you do that, you make it harder and harder to attract college grads. It's a negative reinforcing loop. Which explains Mississippi, etc. at the bottom.
Wed, 12/11/2013 - 10:18pm
So you would say that if Mississippi were to repel their RTW and find they are just as poor a year later, the union labor movement is a failure? Keep in mind it's not my side of the spectrum that's skeptical of any single golden economic bullet. Likewise if Michigan doubled its college grads do you believe we wouldn't just quadruple our college grad exports, with the taxpayer's investment?
David Waymire
Mon, 12/16/2013 - 4:10pm
No, Matt. I'm saying that if after following the same policies for 20 years you've seen no results, you might try something different. You might try looking at the states with the highest per capita income, and ask what they are doing. Maybe you don't shift your Right to Work position, because it's irrelevant to winning in the knowledge economy. But you might decide to invest in yourselves and your people by raising taxes, getting your education system back on track, fixing your cities, and attracting college grads. Because that's the only thing that will make you more prosperous. I wouldn't be walking around telling rich states they should follow me.
Jonathan Ramlow
Tue, 12/10/2013 - 7:27pm
There seems to be a consensus here that Michigan's economy is a very complex creature and, therefore, having patience with RTW for up to 10 years would be valuable before conclusions are reached about it's effects. Could we also reach a consensus that Michigan's health care industry (not to say the American health care industry overall) is also a very complex creature and, therefore having similar patience with the Affordable Care Act would be valuable as well, before it's effects are judged?
Wed, 12/11/2013 - 2:36pm
Jonathan, There is no consensus, the economy, personal health, medical care, etc. are not complex when they are broken down to their parts and self serving politics are remove from each. I worry whenever consensus is claimed or strived for; consesnsus stiffles competition of ideas and activities. RTW was the consequence of the politcal effort to excempt union bargaining agreements from state laws, they tried to change the Constitution (lost) making an opening for RTW. It was politics on both sides and has been for a very long time. The economy is simple, it's about competition. Stop trying to control the competition and focus on the functions those in competition can't provide (for the state it is roads, rules/laws for consistency, public safety). A simple example is regulations, the state writes health and safety rules to control the workplace and yet has little expertise in how the workplace functions. If they want a better economy then write the rules to facilitate improving performance and intellectual competition. Don't write rules that are prescriptive and stifle innovation and form barriers to performance improvement. As best I can tell individual health is mostly influenced by lifestyle choices, people chose and get the consequences. The politics is an effort to remove responsibility from the individual by shifting the consequeunces on to the community. The politics makes it complex by trying to control who does what and who pays for what. Better to help the individual to be able to choose and open up for more competition. There shouldn't be consensus and everything is simple when you look at how it works without politics.
Barry Visel
Wed, 12/11/2013 - 7:49am
For me, the main issue with regard to RTW or ACA (or anything similar) has nothing to do with the economy, health care, or whatever...but everything to do with personal freedom and liberty.
Thu, 12/12/2013 - 4:45pm
You are correct. If we suggested that anyone should be compelled to join and contribute to a church our friends here on the left would go ape s--- nuts! When you boil it all down I don't see the difference.
Thu, 12/12/2013 - 9:15pm
If RTW was really in the best interest of the 'workers' and not big business and its 1% owners, why do you think our Leg ramrod this provision though in less than a week, with no public comment, and our Gov. saying all along he wasn't for it, yet signed it at the last minute? If our Legislature and Gov. were so proud of this, why was it kept so quiet until the last minute? Of course they did this in this manner because they well know that the citizens vote, not big business, therefore in order to let the big money talk, they had to push this through as quietly and quickly as possible.
Sun, 12/15/2013 - 9:56am
The machinists working for Boeing in Seattle turned down a new contract last September. Boeing promptly announced that they would seek a new location to build their new version of the 777. Is Michigan in the running for this new assembly plant. Compared to other states, Michigan has an exceptionally large number of machinists, metal workers and skilled trades workers - and a RTW law. Would Willow Run be a good site for Boeing's new plant? What about an expanded Coleman Young airport and the nearby planned industrial park? You might think the strong advocates of the RTW would be working overtime to attract a major new airplane assembly plant. It might convince some that there are benefits to the new RTW law.
Barry Matthews
Sun, 12/15/2013 - 10:41am
Representative Ray Franz (101st district), in a telephone discussion, insisted that each individual worker should be required to negotiate his/her own benefits and wages with his/her employer. I wonder if our State Legislators would be willing to negotiate their income and benefits on a individual basis with the electorate.
Wed, 08/06/2014 - 3:42pm
I can tell you what the right to work laws did to my household- my husband's wages went from $26+/hr to $9/hr... thanks Michigan voters!
Wed, 08/06/2014 - 3:43pm
OH- and we lost all of our health insurance and other benefits!!!
Wed, 07/13/2016 - 12:09pm
Meijer in Michigan forces people to join the union by telling them they have a contract with the union and if you DON"T join you still have to pay the dues required to not be a member of the union. Is this legal?