Michigan is about to become the 24th state with a “right-to-work” law. A “right-to-work” law makes union dues voluntary by prohibiting closed union shops in the private sector. In a closed shop workers represented by a union are compelled to pay union dues. Once the law is signed in Michigan, workers represented by new collective bargaining agreements are free to decline paying union dues. The Michigan law would make existing union-employer agreements exempt from the prohibition on closed shops. An argument in favor of the Michigan law is that companies considering alternate locations for a new plant, factory or facility will face the same right-to-work environment in Michigan as in southern and western states. For those who believe that states in the industrial Mideast have lost jobs in capital-intensive industries because of differences in labor laws, this law makes Michigan more competitive. It is also notable that Indiana, the most manufacturing state in the country, enacted a right-to-work law in 2012.
It is surprising that Michigan has enacted a right-to-work law because from 2010-2012 it had the fourth highest union membership rate in the country behind Nevada, New York and Alaska. Nevada is the right-to-work state with the highest union membership rate. Nevada, Michigan and Indiana are the only right-to-work states with private sector union membership rates above the national average of 6.9%. About 45% of total U.S. employment will now be in right-to-work states, where the average private sector union membership rate is 4.4%, less than half of the union membership rate of 8.9% in the other 26 states.
The following chart shows the uphill battle that private sector unions are likely to face at the ballot box in the years ahead. Workers under the age of 35, who are becoming a more important force in elections, have not been members of private sector unions and therefore may be less likely to oppose right-to-work legislation. Fewer than 3% of workers under the age of 35 in right-to-work states are union members. Fewer than 6% of workers under 35 are union members even in states without right-to-work laws.
Given the age gap in union membership, it should not be surprising if right-to-work laws are considered by legislatures in other states. Politicians in states competing for new businesses and jobs will continue to make the argument that jobs are being lost overseas and to states where unions are less of a force. As long as job creation is a primary concern legislatures will consider laws that will weaken the strength of private sector unions.