LANSING — In their first week in power, legislative Democrats are queuing up two major policy changes that would impact hundreds of thousands of Michigan workers — repealing the state’s “Right-to-Work” law and expanding the state’s Earned Income Tax Credit.
Don’t expect labor policy discussions to stop there.
In past legislative sessions, Democrats have backed dozens of labor-related bills that proposed, among other things:
- Expanding bargaining rights and union protections in education and other sectors
- Increasing the minimum wage to $15 an hour
- Requiring employers to give two-week scheduling notice, a concept known as “predictive scheduling”
- Requiring 30-minute breaks for every five hours worked
- Creating a tax credit to offset costs of child or dependent care
- Giving temporary workers the first opportunity to apply for open permanent positions
- Requiring severance pay for employees affected by company shutdowns or mass layoffs
- Reinstating prevailing wage, a law repealed in 2018 that required non-union employers pay union rates for construction projects. Democratic Gov. Gretchen Whitmer restored the requirement on state construction contracts last year
Those ideas were nonstarters while Republicans were in control of the Legislature for nearly 40 years. But Democrats now have majorities in the House, Senate and a partner in Whitmer. Leaders in both the House and Senate created labor committees, and Democratic lawmakers say there’s “an immense opportunity” to advance worker-friendly legislation this term.
“We’re not just going to look at it from a piecemeal approach or a singular, isolated approach, but really a holistic lens of, ‘What are the needs of the working people across the state?’” House Majority Floor Leader Abraham Aiyash, D-Hamtramck, told Bridge Michigan.
Workers need all the help they can get, said Elizabeth Kruger, a Lansing resident with 12 years of experience in the restaurant industry.
Kruger said she regularly worked 12-hour shifts without having a chance to sit down and developed several health problems related to the physical toll of restaurant work.
“I’ve had experiences when I was really sick with the flu, like tested positive for flu, and I was still expected to come in,” Kruger said. “And it’s very common for people just to say, ‘Well, I can’t skip work, because then I’m not getting any money.’”
Critics caution that tinkering with Right-to-Work and other existing labor policy could jeopardize economic gains made in the last decade. Steve Delie, director of labor policy for the Mackinac Center for Public Policy, said expanding labor rights “will set Michigan back and will only accelerate the rate at which people are leaving Michigan for other climates.”
“For much of this, it’s a question of trade-offs — it’s a question of what is the supposed benefit of this policy versus what are the supposed consequences,” Delie said.
A legislative maneuver
The renewed interest in labor policy comes amid an ongoing court battle that could result in a higher state minimum wage and new paid sick time requirements for workers.
On Jan. 1, the state minimum wage increased from $9.87 to $10.10 an hour, although all but 1 percent of Michigan workers are making more than that in the current market due to ongoing labor shortages.
A 2018 ballot initiative as proposed would have raised the minimum wage this year to $13.03 for traditional minimum-wage workers and to $11.73 for restaurant servers and others who also rely on tips. It also would have phased out the lower wage for tipped workers by 2024.
Before voters could weigh in, Republican lawmakers thwarted the effort. They adopted the measure before the 2018 election, then later watered down the wage provisions, as hundreds of people protested in the Capitol rotunda.
This past July, Michigan Court of Claims Judge Douglas Shapiro ruled that the maneuver violated the Michigan Constitution, although that decision was stayed until Feb. 19 and remains under appeal. Should it stand, the ballot initiatives as originally adopted would be reinstated.
Maricela Gutierrez, co-organizing director of the national One Fair Wage campaign, said the group is focused on ensuring that minimum wage increase takes effect and supporting employers who need assistance, as well as preparing for a 2024 initiative to increase the state minimum wage to $15 an hour.
“Our bread and butter is wages, but we also focus on creating better working conditions for workers,” she said. “Besides wages, there are so many other ways that the restaurant industry needs to be better.”
Aiyash said he and other lawmakers are waiting to see what the courts decide on the minimum wage issue, but he anticipates it will come up when lawmakers begin listening sessions with workers around the state.
“We’re going to be very meticulous and thoughtful, and we’re going to bring forward those that are actually directly impacted to help us think through some of the best policies,” he said.
Cooking up other reforms
Many of the proposals on Democrats’ radar — especially the concept of predictive scheduling — would have a big impact on the state’s restaurant and hospitality industry, where long shifts for employees and razor-thin profit margins for their employers are the norm.
Currently, only Oregon and cities such as New York City, Philadelphia, Seattle, Chicago, and the California cities San Francisco, Emeryville and Berkeley have some form of predictive scheduling laws in place.
Rep. Kara Hope, D-Holt, previously introduced a plan to apply the concept to Michigan and said she anticipates a system similar to that in Oregon, where large employers are required to provide two weeks’ notice on shift schedules and notice and additional pay in the event of changes, would offer workers more flexibility and potentially promote worker retention.
“If someone knew two weeks in advance that they were going to be working whatever days, they have the opportunity then to schedule a dentist appointment or go to their kids’ school parent-teacher conferences or give them an opportunity to participate in some of the things that a lot of us take for granted,” she said.
Kruger, who worked for several restaurants before taking her own business, Honey Bun Bakery, full time, said more predictive schedules and stricter adherence to employee breaks would go a long way toward improving workplaces.
“It definitely depended on the restaurant — on average, I would get the next week’s schedule about five days before that week started,” Kruger said of her own experience. “Which is definitely hard to work around, especially if you have more of an open availability…because then you don’t know, well, am I going to be working in the morning? Am I working late in the evening this time? And it can be all over the place.”
For employers, though, adding one-size-fits-all restrictions or penalties in an industry with high turnover could cause “unintended consequences that can be negative both for employers and employees,” especially as the hospitality industry continues to recover from the COVID-19 pandemic, said Wendy Block, vice president of business advocacy and member engagement for the Michigan Chamber of Commerce.
Going into the new legislative session, Block said the chamber remains hopeful there’s “more common ground than some would think” due to the tight margins in both chambers.
Democrats hold a two-person lead in both the House and Senate.
“We’re not sure that there’s too much here that is broken, that needs to be fixed, but we’ll be working to understand what proponents of these policies are hoping to accomplish and what they believe it fixes,” Block said.
There’s little decisive research on whether scheduling reforms, mandated sick time, family leave or other policies floated in Michigan do a good job striking the balance between employer and worker interests, said Brian Asquith, an economist with the W.E. Upjohn Institute for Employment Research in Kalamazoo.
One policy that has shown beneficial outcomes for workers and employers alike is the Earned Income Tax Credit, Asquith said, noting that such credits typically ease financial burdens of employees while encouraging more people to enter the workforce.
Currently, lawmakers are mulling increasing the credit to up to 30 percent increase of the federal credit, which applies to families of four making less than $57,000 a year. The state credit is now 6 percent of the federal credit. Raising it to 30 percent would save some 700,000 state families $400 a year or more.
Lou Glazer, president of Michigan Future Inc. and a key backer of the Earned Income Tax Credit expansion proposal, said both a minimum wage increase and the proposed EITC expansion would “increase the reward for low-wage workers to work, which should put more people back in” the labor pool.
On the ground, a sudden minimum wage hike has the potential to negatively impact employees if their employers make up the difference by scheduling people for fewer hours, Kruger said, and tipped workers in higher-end establishments fear they could lose out on money they’re currently earning if their base wage goes up and employers opt for a no-tip policy.
But a wage increase is sorely needed for many in the industry, Kruger said, expressing hope that an emphasis on fair labor practices at the state legislative level could help iron out issues.
The research on Right-to-Work is inconclusive: although the policy may have had some positive effects on attracting manufacturing jobs in Michigan, one recent study concluded Right-to-Work lowers unionization rates and leads to lower wages.
On certain labor issues, like Right-to-Work, the battle lines are already drawn — and starting out the legislative session on such a partisan issue could complicate future economic development discussions, said Rep. Andrew Beeler, R-Port Huron.
“Right-to-Work has kind of been the 1,000-pound gorilla in the room, and that’s what everybody goes toward,” he said. “It’s going to be a difficult bill, and the fact that it’s first, I think, will really set the tone for how we negotiate.”
Beeler expressed optimism that there’s room for bipartisan work on labor, suggesting providing additional support for students interested in career tech education and creating a more business-friendly environment: “If we are creating an environment where people want to come here and invest, that’s good for (the) workforce.”
Hope, the Holt Democrat championing predictive scheduling legislation, said the choice is simple.
“I don’t think the idea that someone