Michigan Right-to-Work repeal: What workers, businesses need to know

• Michigan Democrats repealed the state’s Right-to-Work laws in 2023, and the law came off the books on Tuesday.
• Business groups and Republicans opposed the move, saying it would limit the state’s competitiveness.
• Controversy remains over whether the move will hurt the state’s economic development efforts.

Michigan workplaces are no longer governed by the Right-to-Work law, as the repeal took effect Tuesday of the decade-long regulation that allowed workers to opt out of paying dues in union-represented jobs but still receive benefits.

Gov. Gretchen Whitmer signed the law on March 24, 2023, months after Democrats won control of the governor’s office, state Senate and state House in the November 2022 election.

Repealing the law became one of the early policy priorities as Democrats eyed taking control of the legislature. The repeal passed along party lines in the House and Senate. The law is one of 142 that took effect Tuesday, three months after the Legislature adjourned. The repeal didn't get enough support to take effect immediately.

Here’s what you need to know.

What is Right-to-Work?

The law, which was approved by Republicans in a lame-duck session in 2012, banned requirements that workers join unions in order to receive their benefits.

Related:

• Gun, abortion, energy reform among 142 Michigan laws taking effect Tuesday
• Whitmer signs Right-to-Work repeal, prevailing wage restoration
• Big money rolls into Michigan Democrats from unions after Right-to-Work repeal

Democrats — who are backed heavily by unions including the Michigan Education Association and United Auto Workers —  said the repeal prioritizes workers and labor rights.

Right-to-Work has “negatively impacted the state,” said House Speaker Joe Tate, D-Detroit, said in late 2022.

What do both sides say?

Labor groups argue Right-to-Work hurts workers’ ability to organize by reducing dues for unions who need money to organize groups of employees. They also claim that wage growth is lower in states with Right-to-Work laws — which critics say is the goal of Right-to-Work.

Business advocates say the law helped economic development in Michigan, making it more attractive to national site selectors who evaluate locations for new business.

When Democrats announced their intent to repeal the law, Michigan was one of the nation’s 27 Right-to-Work states, many of which compete with the state for large-scale electric vehicle battery manufacturing such as Kentucky, Tennessee, Georgia and North Carolina. 

Who is affected by the change?

Only private sector employees. The repeal did not address the public sector.

However, few changes are expected, according to the Detroit Regional Chamber.

“Businesses that are union shops continue to partner with unions and only a small percentage of union workers opt out of paying dues,” the Detroit chamber said on Tuesday.

What if you don’t want to join a union?

Those in unionized workplaces don’t have to rejoin their union and can still opt out of union membership at any time, according to the Mackinac Center for Public Policy, a free market think tank.

“The primary difference now is that they will have to pay the union agency fees, which often come to 90% of full dues,” the Mackinac Center said on Tuesday.

During Right-to-Work, tens of thousands of Michigan union members opted out of union membership, according to Mackinac Center estimates, a move that cost unions at least $50 million annually in lost dues.  

What do businesses say?

Michigan’s two largest chambers, along with other business advocacy groups, opposed the move. Their concerns continue as the repeal takes effect.

“The repeal of Right-to-Work weakens Michigan’s global economic competitive position and harms our ability to vie for new businesses and jobs,” the Detroit Regional Chamber said on Tuesday. 

“As states compete for jobs in the global market, those with Right to Work laws have a distinct advantage,” the chamber added. “Michigan now loses this key economic development tool to the detriment of our employment base and local economies.”

Was Right-to-Work effective?

Studies vary about the impact of the law, depending on who paid for them. 

Labor-backed research has concluded the laws have eroded wages, led to higher debt and poorer health. Pro-business research has concluded it has a positive effect on economic growth. Much of that growth, however, has occurred in Right-to-Work states in the South, where warm weather and other factors already are attractive to business.

“Right-to-Work laws may have some positive effects on attracting manufacturing jobs,” Tim Bartik, an economist focused on development for the W.E. Upjohn Institute for Employment Research in Kalamazoo, told Bridge in late 2022.

One benefit could be attracting manufacturing jobs in areas that border other states, such as west Michigan areas close to Indiana. 

Yet those jobs, Bartik said, would not be high-paying positions. And setting statewide policy based on that manufacturing growth would not be likely to generate overall job gains or wage increases in Michigan.