Michigan’s Economic Outlook Hit by Right-to-Work Repeal

Today, Michigan workers lose their right to choose to join or not join (or support) a union, without their decision affecting their employment. Signed into law last year, SB 0034 goes into effect today, repealing the Right-to-Work provisions that had protected private sector workers’ voices since 2012.

This repeal makes Michigan the first state in 58 years to legislatively rescind these worker protections. Michigan Senate Minority Leader Aric Nesbitt summarized today’s change:

Over 150,000 individuals in Michigan made the free choice to leave their union since 2013. Having the government force those same workers back into the unions they freely decided to leave is the antithesis of freedom. It’s un-American.

It should be noted that  71% of Michigan voters from union households oppose the repeal. Michigan House Minority Leader Matt Hall spoke with ALEC about the expansion of economic opportunity in Michigan after passage of Right-to-Work:

At the time, Michigan led the nation in terms of people leaving the state and had lower incomes and fewer jobs. Understanding the history of Michigan and looking at what we’ve been able to accomplish over the last 10 years is critical. We’ve made our state more competitive with job growth in cutting-edge areas like manufacturing and engineering. That’s because of Right-to-Work and other economic policies that we’ve brought forward – many of which were based on ALEC model policies.

As Minority Leader Hall mentioned, Michigan experienced an increase in employment rates from 2013-2018 that was 1.9% higher than non-Right-to-Work states. In the manufacturing sector, Michigan saw a 6.4% increase in employment, while non-Right-to-Work states saw an average decrease in employment in this sector of 1.1%. Not only did employment increase, but a study from The Mackinac Center found states with Right-to-Work laws experience faster wage growth compared to non-Right-to-Work states. In addition, workers in Right-to-Work states report an increase in life satisfaction.

Studies like these prompted ALEC members to approve the model Right-to-Work Act. It protects workers’ freedom to choose whether or not they want to support or join a union, without any impact on their employment. Twenty-six states have similar Right-to-Work laws in place, with ten states enshrining the protection in their constitutions. Tennessee most recently accomplished this in 2022, with nearly 70% of voters supporting the amendment.

Right-to-Work is one of the 15 policy variables measured in ALEC’s Rich States, Poor States Economic Outlook rankings. It’s also a key factor in ALEC’s latest publication, Labor Reform Policy: 50 State Factsheets. In December 2023, ALEC Executive Vice President of Policy and Chief Economist Jonathan Williams authored an op-ed for The Detroit News, explaining that Michigan should follow the lead of top growing states:

With enhancing population and increasing overall economic growth as widely agreed upon objectives, it follows that policymakers need non-partisan research and data-driven analysis. Since 2007, I have co-authored the annual report, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. Our research has focused on what works and what does not, from a policy perspective, as Americans “vote with their feet” across state lines. This movement of Americans has become especially relevant with our increasingly remote workforce post-pandemic. While numerous other factors can play a role in growth, we find free market economic policies help drive state competitiveness, migration and job growth.

Williams also pointed to Right-to-Work as a key policy that had spurred an economic comeback in Michigan:

State lawmakers and Gov. Rick Snyder were able to turn the corner by thinking outside the box and eliminating the disastrous Michigan Business Tax, enacting regulatory relief for struggling employers and supporting the rights of individual workers with Right-to-work. By 2017, the state had nearly erased the exodus of Michiganians to other states. It can be done again with smart policy choices.

The positive impact of Right-to-Work is impossible to ignore. In 2022, Kevin Stocklin of The Epoch Times reported on Bureau of Labor Statistics data that revealed “Right-to-Work (RTW) states added 1.3 million jobs since the start of the pandemic, while non-RTW states lost 1.1 million jobs.” In the story, ALEC Vice President of Policy Lee Schalk noted:

It’s not surprising to see the latest BLS numbers. It’s also consistent with the migration trends that we’ve tracked. This really came into focus during the pandemic as hundreds of thousands of people left non-right-to-work states like New York and California, and they flooded into right-to-work states like Florida, Texas, North Carolina, and a lot of southern states.

While a majority of states currently protect private sector workers’ right to freely choose which organizations to associate and not associate with, Michigan faces an uphill battle following today’s repeal. As Leader Nesbitt explained, the loss of Right-to-Work is a hit to the state’s economic outlook:

Repealing Right-to-Work puts a ‘closed for business’ sign on the state of Michigan. Economic development will dry up, driving businesses out of the state, weaking our communities, and endangering the stability of Michigan families.

Here’s to hoping Michigan will restore worker freedom and right the ship before too much economic damage is done.