Michigan union officials opt to dump pensions to keep collecting mandatory dues

For union officials, self-preservation and the desire to avoid accountability to workers trumps their desire to maintain defined benefit pensions; they were willing to dump those pensions to continue mandatory dues.

Paul Kersey
Director of Labor Policy

As Michigan’s Right-to-Work law took effect at the end of March, Michiganders got an interesting look at union priorities. One of the most interesting revelations came out of Washtenaw County, which lies west of Detroit and includes Ann Arbor.

As a refresher, Michigan’s Right-to-Work law simply means that workers cannot be forced to pay union dues or agency fees in order to keep a job. In Right-to-Work states the overwhelming majority of workers who are covered by union contracts join the union voluntarily, making union membership a real choice. This makes union officials more accountable to the workers they are supposed to represent.

In Washtenaw County, local officials wound up renegotiating contracts last month with 15 unions representing county government employees despite the fact that the unions’ contract expiration date wasn’t until December of this year. But because of the way Michigan’s Right-to-Work law was written, if the unions had waited until December to sign new agreements the Right-to-Work law would have applied. This would have meant that county workers would no longer be required to pay union dues as a condition of employment and the unions would no longer be guaranteed a steady stream of dues revenue.

This prospect terrified union officials, who apparently had little confidence in their ability to coax workers to join voluntarily; in the last weeks of March they negotiated new 10-year contracts. With these new contracts the unions guaranteed themselves union dues for a decade. Or at least that’s what they thought.

In their rush to rewrite and ratify the contracts, they ignored a state law calling for an actuarial analysis before a change is made to a pension system. Under this law, an actuary needs to report back before changes are put into effect. Without the actuary’s report, it is not clear that the March contracts will take effect, and the deadline has passed for any new contract to be signed that is not subject to Michigan’s Right-to-Work law.

Despite this mishap, the union’s behavior reveals significant information about the union mindset. The unions gave up a lot in their attempt to cement their dues in Washtenaw County: under the new contract, workers would have transitioned from traditional defined benefit pensions to more modern defined contribution plans, something that unions have resisted anywhere else.

This shows something interesting about union priorities. For union officials, self-preservation and the desire to avoid accountability to workers trumps their desire to maintain defined benefit pensions; they were willing to dump those pensions to continue mandatory dues. Pensions may be important to unions, but forced dues are an even higher priority.