Michigan Gov. Gretchen Whitmer signed the “right-to-work” repeal Friday. Courtesy | Facebook

Michigan Gov. Gretchen Whitmer signed two bills Friday repealing the state’s “right-to-work” law and restoring prevailing wage rates, reversing two major Republican labor policies passed since 2012.

The “right-to-work” repeal under HB 4004 and SB 34 means employees may be required to pay union dues as a condition of employment. HB 4007 and SB 6 reinstate the prevailing wage law, repealed in 2018, which requires governments to pay union-level wages on state-funded projects.

State Rep. Andrew Fink, R-Hillsdale, and state Sen. Joseph Bellino, R-Monroe, voted against both bills.

“Making choices to make Michigan less competitive is a foolish way to operate in a shrinking state,” Fink said.

City Engineer Kristin Bauer said she is unsure how the new law might affect city projects, but a $2.9 million federal grant for water and sewer projects already falls under the national prevailing wage law.

“If federal dollars are attached to the project, you have to pay Davis-Bacon wages,” Bauer said.

According to the U.S. Department of Labor, the Davis-Bacon Act requires contractors working on federal projects to pay their employees the prevailing wage of the region. The law does not apply to state-funded projects.

Bob Griffis, Hillsdale County Road Commission manager, said road maintenance will be unaffected because the commission already pays prevailing wage.

“Prevailing wage is an existing thing we do,” Griffis said. “We won’t be affected by the new law.”

Rep. Brenda Carter, D-Pontiac, who sponsored the bill, said in a press release that the decision will benefit workers and improve public infrastructure.

“We are showing the nation that Michigan is a worker-friendly state, where workers can be sure they will receive a fair wage for their hard work,” Carter said. “By ensuring fair, competitive wages, we will ensure that we attract and retain a highly-trained workforce because we do not want to see critical infrastructure projects built by contractors that cut corners.”

According to the bill’s text, a new rule will allow third parties who allege a violation to file a complaint with the state government, which may investigate the employer.

Jimmy Greene, president of Associated Builders and Contractors of Michigan, said this new, anonymous complaint channel invites abuse.

“If I accuse you of something, I immediately bring the wrath of this commissioner upon you and I never have to reveal my name,” Greene said. “You’re asking me to believe that nobody would ever use that for economic gain or to literally kick a non-union contractor off a job. I’m not going to believe that.”

The new rule could raise construction costs, according to Greene.

“This new prevailing wage dissuades anybody who is not union from bidding on this kind of work,” Greene said. “What this means economically is fewer bidders. This is supply and demand. You have higher costs associated with that prevailing wage job already, which will drive costs even further upward because you have less competition.”

Hillsdale College Associate Professor of Economics Christopher Martin also said the new law will raise the cost of public construction.

“I think both theory and empirical evidence point towards the new rules raising the cost of public projects,” Martin said. “Some workers will benefit from receiving higher wages. Taxpayers as a whole, as well as workers who might have been hired without the policy, will lose.”

Max Nelsen, director of labor policy at the conservative nonprofit Freedom Foundation, said the new law will do more harm than good.

“Prevailing wage laws artificially increase the cost of public projects by inflating labor costs beyond market rates, meaning taxpayer dollars don’t go as far as they otherwise would in a truly competitive bidding process,” Nelsen said. “By adopting prevailing wage laws, the government forces itself to pay more for public works projects than it needs to because it wants those jobs to be awarded to higher cost union labor for political reasons.”

The “right-to-work” law, passed in 2012, prevented unions from compelling employees to pay dues to work. Union membership in Michigan dropped to 14% in 2022, down from 16.6% in 2012 when the law was passed, according to the U.S. Bureau of Labor Statistics. Michigan is the first state in 58 years to repeal a “right-to-work” law.

Susan Smith, executive director of the Hillsdale County Economic Development Partnership, said she sees no point in repealing the “right-to-work” laws.

“You’re limiting people’s freedom of choice,” Smith said. “I don’t think that’s a democratic thing to do. If people wish to join a union, they’re free to do so. If they wish to not be a part of the union, they have that option. As long as they know, I don’t think we need to have any more freedoms taken away from us in Michigan.”

State Rep. Jimmie Wilson, D-Ypsilanti, said in a press statement that workers’ rights are a top priority for Michigan Democrats.

“With the repeal of so-called ‘right-to-work’ laws, or as I like to call them ‘right-to-freeload’ laws, we have shown the rest of the country what it means to be a union state,” Wilson said. “I am proud that Michigan is once again a place where my four sons have the same union rights I did.”

Fink pointed to a 2022 study from the Mackinac Center, a conservative Michigan think tank, which found that counties in “right-to-work” states had higher employment levels compared to bordering counties in states without such laws.

“Because of our unusual peninsular geography, relatively few communities in Michigan border another ‘right-to-work’ state,” Fink said, “leaving us to bear the brunt of such a policy change.”