Politics

GOP lawmakers seek labor reform in Michigan

Photo of F. Vincent Vernuccio
F. Vincent Vernuccio
Director of Labor Policy, Mackinac Center for Public Policy

While most of the nation focused on the Wisconsin government union fight in recent weeks, Michigan has been pushing major labor reforms in both the private and government sectors. The goal is to ease budget woes and make the state more economically competitive. Elected officials in Michigan face painful decisions about how to bring the state back from the brink.

Michigan’s economy has been in free fall for years. Republican Gov. Rick Snyder is battling a $1.4-billion budget shortfall. And to make matters worse, in 2009 the state had the worst domestic product decline in the nation and its population dropped below 10 million for the first time in a decade.

Everyone may need to share in the sacrifice, but, as in Wisconsin, organized labor is protesting loudly against any attempts to curb their privileges. On Wednesday, March 16, thousands of union members converged in Lansing to protest cuts for state workers and an “Emergency Manager’s Amendment,” which would allow the state to take over unwieldy government union contracts. The protest resulted in over a dozen arrests for trespassing and “obstructing a police officer.”

Several of those arrested were not union members but college students, whose boosting of protesters’ numbers the unions may actually need. The poor state of Michigan’s economy has dragged down union membership in the once-solid labor stronghold. The Department of Labor (DOL) reported in January that Michigan lost 11.7 percent of its union members in 2010. The state now has 627,000 members, the lowest number since DOL started tracking state membership in 1989. Only 16.5 percent of the state is now unionized — still higher than the 11.9 percent national average but far less than its high of 26 percent in 1989.

Gov. Snyder is asking government employees for $180 million in concessions to help fix the state’s budget gap. This could include wage concessions and increased contributions to state employee’s health insurance and pension plans.

A proposed bill would take away mandatory binding arbitration privileges from police and firefighters. In exchange for a third party settling contract disputes, public safety personnel agree to give up their right to strike. Unions favor this type of negotiation arguing that it levels the playing field. Supporters of the bill maintain the current process reduces the flexibility of local governments and drives up labor costs through mandated compensation increases.