On March 24, Michigan Gov. Gretchen Whitmer signed into law S.B. 34 and H.B. 4007, which respectively repeal the state’s right-to-work protections and reinstate prevailing wage requirements for public construction projects. The actions reward labor unions’ substantial financial and political contributions to Michigan Democrats’ unified state governmental control and garnered significant opposition from ABC of Michigan, the wider business community and Republican lawmakers.
Michigan enacted right-to-work laws in 2013, and state Democrats have long sought restoration of organized labor’s power to compel dues payments from nonunion workers despite Michigan voters’ overwhelming opposition to a constitutional amendment advanced for that purpose by the United Auto Workers beginning in 2012.
As of March 24, 26 states have active right-to-work laws guaranteeing freedom from coerced financial obligation to labor unions as a condition of employment. Academic investigators have made compelling arguments associating right-to-work laws with higher employment, improved socioeconomic mobility, population growth and lower childhood poverty.
H.B. 4007 codifies Whitmer’s 2021 executive action to require prevailing wage for state contracting. The state’s original prevailing wage law was repealed via a statute initiated in 2018, the result of a large-scale signature-gathering effort led by ABC of Michigan that forced the legislature to consider and vote on repeal. Over 252,000 Michiganders signed the petition in support of that effort. Prevailing wage requirements are intended to undermine nonunion contractors’ competitiveness for public procurements by standardizing the payment of union wage rates via methodologically defective surveys.
A 2017 study by Michigan’s Mackinac Center for Public Policy found state prevailing wage requirements would transfer about $230 million annually from Michigan taxpayers to unionized workers and confirmed extensive existing findings that such requirements increase construction costs by 15%. Union officials applauded Democrats’ fast action to artificially bolster work availability via public coffers for the 14% of Michigan’s workforce that is unionized. H.B. 4007 includes a variety of devices to enhance nonunion contractors’ exposure to compliance burdens and associated liability, including a $5,000 penalty per violation.
Michigan constitutional provisions prohibit veto referenda on spending legislation. In signing each bill, Whitmer breached a campaign promise to veto policy measures that include nominal appropriations intended to insulate legislation from voter review. S.B. 37 and H.B. 4007 respectively include $1 million and $75,000 referendum-proofing spending items intended to preempt Michigan voters’ revision of the legislation.