Executive Summary*

Michigan’s statewide ballot in November will include Proposal 2, described officially as “a proposal to amend the state constitution regarding collective bargaining” — that is, exclusive workplace bargaining by certified unions. If approved by voters, the measure would have two general effects.

First, the proposal would enshrine collective bargaining powers in the Michigan Constitution. Collective bargaining is already permitted by longstanding state and federal law, but under Proposal 2, these powers would have a broader sweep and could generally be changed only by a state constitutional amendment, not an act of the Legislature. Second, Proposal 2 would establish a radical new constitutional proposition: the power of most union contracts to override, with only limited exceptions, all state and local laws concerning “wages, hours, and other terms and conditions of employment” or the “financial support” of unions. These phrases are remarkably broad, giving union contracts the power to nullify a wide range of laws, including numerous laws meant to control government spending.

State labor law has permitted unionized collective bargaining for state employees since 1979; for local government employees since 1965; and for a much smaller group of private-sector workers since 1939. Federal labor law has permitted the same for most private-sector workers since 1935. In one sense, Proposal 2 would provide unions and their members with an insurance policy against the unlikely repeal of these laws.

But by placing collective bargaining power in the constitution, Proposal 2 would do more than that. If Proposal 2 were adopted, even small modifications to the scope of collective bargaining for state and local government employees in Michigan would require a state constitutional amendment.

Note that in most cases, Proposal 2 would not affect private-sector workers. Most private-sector employees are governed by federal law, not state law and the state constitution. Proposal 2 primarily concerns state and local government employee unions, since states, not the federal government, have the sole power to determine whether state and local government employees should be allowed to bargain collectively.

Proposal 2’s radical power lies in a subsection that allows state and local laws to be overridden by provisions of collective bargaining agreements that deal with “wages, hours, and other terms and conditions of employment.” This phrase is a legal term of art that is incredibly broad. It covers obvious compensation issues like health insurance benefits to social health questions like smoking on the premises to obscure matters like the price of candy in factory vending machines.

Proposal 2 similarly allows state and local laws to be overridden by elements of collective bargaining agreements “respecting financial support by employees of their collective bargaining representative.” Contract provisions could thus nullify laws that separate government and politics by preventing government collection of union political money or union dues, which almost always have a significant political component.

Many state laws would be immediately vulnerable to nullification by the terms of government-employee collective bargaining agreements. Included are:

  • Public school management provisions:

– protecting good teachers from being laid off due to a lack of seniority;

– creating greater flexibility in assigning teachers to areas of need;

– allowing notification of parents about ineffective teachers;

– freeing school boards to allow interdistrict and intradistrict choice;

– enabling districts to contract freely with private providers of noninstructional services

  • Educations reforms meant to modernize the tenure system and make it easier to remove poorly performing teachers.
  • A law that puts caps on government contributions towards government-employee health insurance (the so-called “80-20” law)
  • The Freedom of Information Act.
  • A law that prohibits government employers from collecting money for unions “PACs” (called “separate segregated funds”)

Proposal 2 would also preclude the Legislature’s enacting a “right-to-work” law — that is, a law that prevents unionized employees from losing their jobs if they object to union membership and choose not to financially support the union.

Proposal 2 would affect many laws meant to control government spending. As a result, the proposal could lead to at least $1.6 billion in projected savings being lost each year, primarily due to changes to the 80-20 health insurance provisions, employee pension contribution and school district contracting for noninstructional services. Contractual changes to public school employee retiree health care benefits could put at risk a total of $7.1 billion in anticipated taxpayer savings, while changes to either the state employee pension system or the public school employee pension system could add billions of dollars more.

Hence, as the study concludes, Proposal 2 “seems less likely to protect jobs than to create larger demands on workers’ income to supply better wages, hours, and other terms and conditions of employment for government employees.”

 * Citations provided in the main text.