Why ‘right-to-work’ was always wrong for Michigan: Restoring workers’ rights is key to reversing growing income inequality in Michigan
The Michigan state legislature is poised to make history this week by repealing an anti-union “right-to-work” (RTW) statute enacted in 2012. This repeal is an important step toward empowering workers to address historic levels of income inequality and unequal power in our economy, and would mark the first time a state has repealed a RTW law in nearly 60 years.
For decades, Michigan boasted the highest unionization rate in the country—and relatively higher median wages resulted for the state’s workers. In this blog post, we find that as recently as 2005, Michigan’s unionization rate was 1.69 times the national rate, and the state’s median wage was 6% higher than the national median.
But after lawmakers passed RTW in 2012, Michigan’s unionization rates declined faster than in the nation as a whole, and the state’s relative median wage fell below the U.S. median. Attacks on Michigan workers’ rights have especially benefited the rich—declines in unionization rates have been accompanied by dramatic increases in income inequality, with half of all income in the state now going to the top 10%.
The repeal of RTW in Michigan—in tandem with Illinois voters approving a constitutional Workers’ Rights Amendment (which bans future RTW laws) in 2022 and Missouri voters overwhelmingly rejecting their legislature’s attempt to impose RTW restrictions in 2018—would also signal an important turning point after a decade of extreme anti-union state legislation in the Midwest that has suppressed wages and eroded job quality.
So-called right-to-work laws perpetuate inequality and result in lower wages and benefits for all workers
As Martin Luther King, Jr. pointed out in 1961, “right-to-work” is a “false slogan” because RTW laws provide neither rights nor work, and are in fact designed “to rob us of our civil rights and job rights [and] to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone.” Decades later, research bears out King’s contention that “wherever these laws have been passed, wages are lower.”
RTW laws are designed to diminish workers’ collective power by prohibiting unions and employers from negotiating union security agreements into collective bargaining agreements, making it harder for workers to form, join, and sustain unions. As a result, states with RTW laws generally have lower unionization rates than non-RTW states. Even after controlling for other factors that can be related to unionization (such as industry, occupation, education, age, gender, race, ethnicity, and foreign-born status), private-sector workers in RTW states are less likely to be covered by a union contract than peers in non-RTW states.
Consequently, workers in states with RTW laws have lower wages, reduced access to health and retirement benefits, and higher workplace fatality rates. Both unionized and nonunionized workers in RTW states are paid 3.1% less, on average, than workers with similar characteristics in non-RTW states, according to previous EPI research. Figure A illustrates that unionized workers are 58% more likely to have employment-provided health insurance and 65% more likely to have employment-provided retirement benefits than their nonunion counterparts.
Union workers far more likely to have employer-provided health and retirement benefits: Share of workers with health insurance and retirement benefits, by union status, 2022
|Benefit||Share of workers receiving benefit|
|Health care, union||73.2%|
|Health care, non-union||46.2%|
Note: Workers receiving employer-provided benefits is the product of multiplying the share of workers with access to benefits by workers’ take-up rates (both derived directly from the NCS). Access alone understates the union advantage, since sometimes take-up is also improved by unions obtaining better terms of access (i.e., lower share of health premiums they must pay or more-favorable matching rates in retirement plans).
Source: EPI analysis of 2022 National Compensation Survey (NCS) data from the Bureau of Labor Statistics.
RTW laws are historically rooted in racism and designed to maintain unequal power. When private-sector workers first gained legal protection to unionize after the passage of the federal National Labor Relations Act in 1935, unionization rates grew quickly (see Figure B). In response, anti-union, explicitly white supremacist campaigns to limit worker power and maintain Jim Crow labor relations pursued state legislation as a means to constrain workers’ newly won federal union rights via RTW policies, initially in Southern and Western states. These restrictions on collective bargaining rights have since spread to 27 states and continue to generate economic outcomes that disadvantage all workers.
State policies that reverse these legacies and empower all workers to unionize and collectively bargain should be considered top priorities for legislators in Michigan and across the country because they are fundamentally linked to key economic and labor market outcomes. Data show that unions reduce income inequality across the economy, counteract racial and gender labor market inequities, and reduce public-sector pay gaps.
By weakening unions, ‘right-to-work’ laws fuel economic inequality—especially in Michigan
Through bringing workers’ collective power to the bargaining table, unions are able to win better wages and benefits for working people—reducing income inequality as a result. In decades when union density was higher, there was less income inequality (measured as the share of income going just to the top 10%) than there is today, as seen in Figure B. But as unionization rates declined—particularly after 1979—income inequality worsened.
Attacks on workers’ right to unionize benefit the rich: Union membership and share of income going to the top 10%, 1917–2021
|Union membership rate||Share of income going to the top 10%|
Similarly, declining unionization rates in Michigan have been accompanied by a rising share of income accruing to the top 10%, but Michigan’s income inequality has become even more extreme than nationally. Figure C shows that declines in Michigan’s union membership rate since 1978 were accompanied by a stark increase in income inequality, with the share of income going to the top 10% growing from one-third to now half of all income in the state.
Attacks on Michigan workers’ right to unionize benefit the rich: Union membership and share of income going to the top 10%, 1978–2022
|Year||Michigan union membership rate||Michigan share of income going to the top 10%|
Note: Union data refer to workers 16 and older. Self-employed and self-incorporated workers are excluded from the sample. Union membership data in 1981 are suppressed due to insufficient sample size. Union membership data are not available in the 1982 CPS.
Michigan used to boast the highest unionization rate in the country. In 1978, 34.9% of Michigan workers were union members, placing its unionization rate at 1.55 times the national average (as shown in Figure D). As recently as 2005, Michigan’s unionization rate was 1.69 times the national rate. During those same periods, median wages in Michigan were about 6% higher than the national median. But in the past decade, unionization rates in Michigan fell faster than in the nation as a whole, and the state’s relative median wage fell along with it. Today, Michigan’s median wage has fallen below the U.S. median.
Eroding union advantage ends Michigan's wage advantage: Unionization rate in MI relative to U.S. and MI median wage relative to U.S. median, 1985–2022
|MI median wage relative to U.S.||MI unionization rate relative to U.S.|
Note: The relative unionization rate is the share of employed workers who are members of a union in Michigan divided by the same share for the entire United States. The relative median wage is the median wage in Michigan divided by the national median wage. Unionization and median wage data are rolling three-year averages.
‘Right-to-work’ laws erode job quality but have no measurable impact on job growth
Despite persistent claims from RTW proponents that weakening unions will lead to state job growth, comparisons of RTW and non-RTW states over decades show no relationship between employment levels and RTW laws.
Figure E illustrates the employment-to-population ratio—the share of workers ages 25–54 with a job—among three sets of states: those that have remained non-RTW, those that adopted RTW before 2010, and those that adopted RTW after 2010. The prime-age employment-to-population ratios among these states reveal no clear differences. There are no measurable employment advantages between RTW or non-RTW states.
Right-to-work does not buy any advantage in creating jobs for state residents: Prime-age (25–54) employment as a share of population, by pre-2010 RTW, post-2010 RTW, and non-RTW states
|Year||Pre-2010 RTW||Post-2010 RTW||Non-RTW|
Note: Lines are weighted averages of three sets of states: those without RTW laws, those who have passed RTW laws since 2010, and all other RTW states.
Prior studies have likewise shown no causal link between a state’s RTW status and its job growth. For example, studies of Oklahoma after the state enacted RTW in 2001 found a significant reduction in private-sector unionization, but no measurable effect on employment growth. Similarly, researchers at the University of Kentucky examined state economic performance across Southern U.S. states from 1964 to 2004 and found that RTW status had no relationship to state economic outcomes. When studies have claimed to find such effects, it is often due to failure to control for other critical factors such as education levels of the workforce, proximity to transportation hubs, advances in technology, or natural resources.
Michigan can lead the way to restoring worker power and democracy after a decade of attacks in Midwestern states
The very need for Michigan to take special action to restore workers’ union rights is a reminder that for too many U.S. workers, the internationally recognized human rights to organize and collectively bargain are either entirely off limits under broken federal labor laws or restricted by a patchwork of state statutes (RTW among them) left to shifting political whims of legislative leaders.
During the past decade, corporate-backed lobby groups have waged an attack on workers’ rights in Michigan and neighboring states by pushing to weaken public-sector workers’ collective bargaining rights, repeal state prevailing wage laws, and pass RTW legislation. Following the 2010 midterm elections, newly elected Republican governors and legislative majorities prioritized these and other forms of extreme anti-union state legislation—especially in the Midwest. EPI analysis at the time documented a clear pattern of cookie-cutter, anti-union bills introduced in multiple state legislatures and driven largely by politics rather than economics. Backed by a network of wealthy individuals and industry groups, including the Chamber of Commerce, National Association of Manufacturers, Americans for Prosperity, and the American Legislative Exchange Council (ALEC), these state legislative attacks focused on undermining worker power in both the public and the private sectors.
In 2011–2012, Wisconsin, Ohio, and Indiana joined Michigan in passing legislation to substantially restrict collective bargaining rights of public-sector workers. During the same period, 19 states introduced RTW legislation, and Indiana joined Michigan in passing a RTW law. Within the next five years, Republican-majority legislatures in Kentucky, Missouri, West Virginia, and Wisconsin all passed RTW laws (in Missouri, voters restored full bargaining rights for covered private-sector workers by repealing the new RTW law via a 2018 ballot initiative).
As illustrated in Figure F, 27 states now have RTW laws on the books. The majority of these RTW laws were enacted in Southern and Western states in the mid-twentieth century, but after 2010, five states—all in the central U.S.—have newly adopted RTW laws.
States with RTW laws limiting worker power: States with statutory restrictions on all workers' collective bargaining rights due to so-called "right-to-work" laws
|State||“Right to work”|
|District of Columbia||Non-RTW|
|North Carolina||Pre-2010 RTW|
|North Dakota||Pre-2010 RTW|
|South Carolina||Pre-2010 RTW|
|South Dakota||Pre-2010 RTW|
|West Virginia||Post-2010 RTW|
Source: Author's analysis of "Right-to-Work States," National Conference of State Legislatures.
Figure G shows the losses in unionization broken down by RTW status, differentiating among the states shown above that adopted RTW either before or after 2010. Unionization has declined far more sharply in the states that adopted RTW most recently, falling 3.8 percentage points between 2010 and 2022. By 2022, unionization rates were 4.8% in states that had adopted RTW prior to 2010, 9.7% in states that adopted RTW after 2010, and 14.6% in non-RTW states.
Recent RTW-adopting states have seen large decline in union membership: Percentage point change in share of workers who are members of a union between 2010 and 2022
|Change in membership, 2010–2022|
The steep declines in unionization rates in Michigan and other states that adopted RTW in the past decade (often as part of a package of multiple anti-union legislative changes) have devastating and multi-faceted impacts for workers. By lowering the share of workers who have union coverage, RTW laws weaken workers’ bargaining power and allow business owners and corporate shareholders to capture more of the income generated by firms, resulting in lower wages and benefits.
All workers experience a wage disadvantage in states where RTW laws are in place, and data show these disparities are especially pronounced for women and workers of color (who make up two-thirds of today’s union workers). When unions are strong, they improve wages and benefits for all workers (not just those in unions) and reduce racial and gender wage gaps, helping to counteract disparate outcomes resulting from occupational segregation and discrimination in the labor market. When unions are weak, women and workers of color have less hope of working under a union contract, where equal pay for equal work and non-discrimination protections are enforceable guarantees.
Because unions also have powerful effects on workers’ lives outside of work, states that constrain worker bargaining power end up with less equitable economies and less robust democratic participation from voters. Disparities in worker power across states shape the quality of life, the strength of democracy, and the well-being of all workers, unionized or not. Workers who live in states with higher levels of unionization not only earn higher average wages, but also are more likely to have access to unemployment insurance, paid sick leave, and paid family and medical leave than workers in states with lower union densities. Likewise, strong correlations between state-level voting restrictions and low union density show that the future of state-level democracy is itself linked to strengthening workers’ ability to exercise basic rights to organize and collectively bargain.
Repealing RTW and restoring prevailing wage laws are critical steps to rebuilding worker power and reversing this economic damage, but much more remains to be done. Far too many U.S. workers still lack any legal pathway to a union contract, and until Congress enacts major federal labor law reforms, states like Michigan must continue to take the lead on ensuring all workers—including the millions of public-sector, agricultural, and domestic workers who are otherwise excluded from federal labor law—have full union rights.
At a moment of historic inequality and record corporate profits, it is no surprise we are also seeing historically high levels of approval for unions. Workers are looking to unions as critical vehicles for fixing what’s broken at work and in our wildly unequal economy. The large gap between the share of workers who want a union and the share of workers who are in a union underscores that our system of weak federal labor laws, which are further undermined by RTW measures in over half of U.S. states, is not working. Fundamental reform is required to rebuild an economy that guarantees all workers the freedom to unionize and collectively bargain, and no longer leaves most workers behind.
Past generations of Michigan workers birthed industrial unions that turned poverty-wage factory jobs into living-wage careers, transformed the nation’s manufacturing sector, and sustained worker-led multiracial organizations that laid a foundation for 20th-century civil rights and women’s rights movements. Repeal of RTW in Michigan is a crucial first step to ensuring that current generations of workers have the same chance to come together to reinvigorate our democracy, confront new forms of 21st-century inequality, and restore a fair balance of power to our economy.
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