Ballot Proposal 3 Would Replace a Good State Employee Bargaining System with a Slow, Litigious, Expensive One, Analyst Says

For Immediate Release

MIDLAND—Proposal 3, which Michigan voters will consider in November, would needlessly replace a collective bargaining system that has worked well for state employees without offering any justifiable benefits, according to a report released today by the Mackinac Center for Public Policy.

According to Paul Kersey, Mackinac Center labor research associate, “By permanently extending collective bargaining and binding arbitration to all state employees and enshrining both practices in the state constitution, Proposal 3 would create a system mired in endless litigation, plagued by unnecessary labor contract delays, and increasingly expensive for taxpayers.”

Proposal 3 will not improve relations between the state and its 44,000 unionized employees, according to Kersey, the author of the report. On the contrary, he said, it will create confusion and incite protracted battles that can be resolved only in court. “The proposal is vague in key areas, such as the respective authority of the arbitrators, the Legislature, and the Civil Service Commission,” said Kersey. “There is even the possibility that state-employee strikes could be legalized as a result of the proposal’s loose, indefinite language. There is no reason for Michigan to endure such confusion, especially since state employees already have a good, timely, and well-organized system of collective bargaining.”

Binding arbitration has been in effect for Michigan’s local police and firefighters since 1969 and for state police troopers since 1978. Kersey points out that under the police and firefighters’ system, the average arbitration award has come nearly two years late, a practice which could complicate the state budget process, lead to retroactive wage payments, and trigger financial crisis at the state level.

Binding arbitration already has inflicted financial hardship on Detroit according to Kersey. He cites an instance in the late 1970s in which an arbitrator worsened the City of Detroit’s financial condition by issuing an award that increased police wages by 26 percent. “The cash-strapped city was forced to lay off about a quarter of its force, and crime rates, which had been steadily dropping, took off again,” Kersey noted. “This is an extreme example, but the binding arbitration law hasn’t changed since then. There is nothing to prevent something like that from happening statewide if binding arbitration is written into the state constitution, especially since the amendment would potentially apply to all 61,000 state employees,” Kersey said.

The Mackinac Center report outlines the existing collective bargaining system established for state employees by Michigan’s Civil Service Commission (CSC), and finds that it has worked well both for state employees and for state taxpayers. Kersey cites surveys from both the Office of the State Employer and the American Federation of Teachers, which show that in most employment categories, Michigan employees are paid more than the nationwide average for state workers and more than the average for private-sector Michigan workers.

“On the whole, state employees are well paid in Michigan, and contracts are in place on time. This track record testifies to the quality of the CSC’s stewardship of state employee bargaining,” Kersey said. “State employees already have collective bargaining under Civil Service Commission (CSC) rule, and there’s no evidence that they are being shortchanged. State taxpayers, and those who depend on state government services, however, are likely to be set back when an unwieldy binding arbitration system supplants the CSC and makes state government less efficient and more expensive,” said Kersey.

The 8-page analysis, “Proposal 3: Establishing a Constitutional Requirement Extending Mandatory Collective Bargaining and Binding Arbitration to State Government Employees,” is available at in PDF format.