GRAND RAPIDS, Mich. (WOOD) — Michigan Gov. Gretchen Whitmer is expected to sign a repeal of the state’s “right-to-work” law soon. But while the battle over the law has been hotly contested, economic experts say it didn’t actually do much.
The law allowed employees in unionized jobs to opt out of membership and paying dues.
Paul Isely, the associate dean of Grand Valley State University’s Seidman College of Business, said in the decade since Michigan lawmakers passed it, little has changed.
“It’s really hard to tease out any measurable effect either on unions or on businesses of having it,” Isely said.
U.S. Bureau of Labor Statistics data shows union membership in Michigan was already falling before “right-to-work” was implemented, from 21% in 2002 to 16% when the law was first put in place in 2013.
“Unionization had been dropping in Michigan for several decades as the number of workers in the Big Three (automotive companies) started to drop,” Isely said. “That was culminated during the Great Recession around 2010 when we had the bankruptcies of Chrysler and GM.”
Union membership continued on a slight decline in the decade since “right-to-work” passed, according to the federal data.
“There’s been movements up and down,” Isely said. “Those movements up and down are just a function of how many people are employed or not employed at a given point in time, more than they are about the institutions that are unionized.”
Isely said “right-to-work” didn’t impact economic development, either.
“Right after ‘right-to-work’ was put into place in 2013, we saw stories of companies that were willing to look at Michigan that hadn’t been willing to look at Michigan before,” Isely said. “But if we pull ourselves out and look at the number of jobs created, or the number of new businesses created in Michigan, we don’t see any measurable change before or after the law.”
Tim Bartik, an economist with the W.E. Upjohn Institute for Employment Research in Kalamazoo, told News 8 there’s “limited evidence” on the effect of the “right-to-work” law. Bartik said a recent study showed it reduced wages by about 1%. Still, he added it’s hard to study its impact because other economic changes are happening at the same time.
“RTW is difficult to study because: (1) it is a statewide change which occurs when other things are inevitably changing in a state, so hard to measure the separate effects of RTW, and (2) Historically, RTW was mostly in the same states, so not much variation over time,” Bartik wrote in an email.
“In particular, if RTW reduces wages, as is found in the more recent study, this will tend to reduce employment in industries that depend on local consumer demand,” he continued. “Lower wages transfers income from workers to business owners, and the workers are more likely to consume locally than are the business owners, many of whom are stockholders living in some other state.”
Isely agreed with Bartik that whatever impact the law had was supplanted by economic changes.
“What we can say is whether it’s a positive effect on business or it’s a positive or negative effect on unions, the effect is small enough to be washed out by everything else that’s happening in the economy,” he said.
Instead, Isely believes the message sent by removing the law is what could lead to tangible change. It’s about perception.
“I think it’s important to say that the symbolism is important and how that symbolism comes across to the rest of the country will really impact us over the course of the next 10 years,” Isely said. “We don’t know how the rest of the country will perceive this. … If they perceive it negatively, it will increase our costs in other ways to convince businesses to come here. If they perceive it as positive, then they’ll be more likely to come here.”
Both the Michigan House and Senate have passed “right-to-work” repeals. Once finalized, the governor is expected to sign them.