The “stealth unionization” of independent contractors who either work for state government or whose customers accept government health and welfare benefits was dealt a blow by a Michigan House committee on Tuesday with the approval of House Bill 4003. Sponsored by Rep. Paul Opsommer, R-Dewitt, the bill is a response to a highly controversial policy implemented under the Granhom administration whereby tens of thousands of home day care workers and home health care workers were forcibly corralled into a government employee union under the pretext that their customers received some form of government assistance.

An estimated $8 million in union dues per year are taken from these two groups and handed over to state government employee unions run by the United Auto Workers, AFSCME and the Service Employees International Union.

Sherry Loar of Petoskey runs a child care business out of her home. The stealth unionization plot meant that she found herself involuntarily tossed into a government union and forced to pay dues merely because some of the lower-income parents of the children she cares for accept government assistance to help them pay for her services. Loar is one of three plaintiffs who sued the State of Michigan over this policy with the help of the Mackinac Center Legal Foundation. She testified in favor of HB 4003 during a hearing last week.

“My house was placed into a union!” an outraged Loar told the House Committee on Families, Children, and Seniors.

The dues were required each time Loar accepted a customer who was using a government child care voucher to pay her. As this is a child welfare program, the net effect of the policy was to take taxpayer money intended for the care of low-income children and instead hand it over to the unions. Though this policy applied to 45,000 child care providers, the majority — including Loar and her co-plaintiffs — were not part of the vote that allegedly created the union.

Patrick Wright, director of the Mackinac Center Legal Foundation and the lead attorney for Loar in her case against the state, also testified regarding the impact of the stealth unionization policy.

“Unions were taking money that was intended for kids and families,” noted Wright.

Wright also told the committee that the practical implications of the policy could be far-reaching if government is allowed to use such a standard for unionizing other occupations. He mentioned that doctors that accept patients on Medicare and grocery store owners who accept food stamps as just two other possibilities that the state could declare to be government employees.

The day care union was operated with the cooperation of the Michigan Department of Human Services under former Gov. Jennifer Granholm, using a convoluted legal mechanism called an “interlocal agreement.” The union was known as the Michigan Home Based Child Care Council. Because of the interlocal agreement, the DHS under Granholm was able to continue the policy of supporting the MHBCCC without legislative input — and even in the face of overt Legislative opposition and the legal challenge mounted by the Mackinac Center on behalf of Loar and the two other plaintiffs. 

However, shortly after being appointed by Gov. Rick Snyder, the new DHS director, Maura Corrigan, announced that DHS was reversing the Granholm-era policy and removing its support for the MHBCCC. Corrigan severed the state’s involvement by stating that the DHS did not consider the day care providers to be state government employees and would thus no longer allow the DHS to extract dues payments from their checks.

Opsommer’s bill seeks to assure that no future state department can do what the DHS did under Granholm. If enacted, the bill would require the Legislature’s approval before a state department could declare a new class of government employees and take dues payments from them.

“The Legislative power was taken away by a governor trying to help a political ally,” Wright told the committee. “And it took the money away from kids.”

Gov. Granholm openly boasted of the creation of the MHBCCC when speaking to the AFSCME convention in 2008:

“In Michigan because of the partnership between AFSCME and the governor's office, this means that 45,000 new AFSCME members, quality child care providers, will be on the ground providing care to children. That is great for our state."

The bill now moves the floor of the Michigan House for consideration.

Portage Northern High School teacher Dave Laing told the Kalamazoo Gazette recently that he feels teachers are being unfairly portrayed as greedy and overpaid. According to the article, he is a union negotiator for the Portage Education Association. The “Dave Laing” on the Portage Northern staff website is listed as teaching physical education classes.

From the article:

He referenced his daughter, a college student majoring in chemical engineering. “When my daughter graduates college, she’ll probably start out making more than I’m making at the end of my career,” said Laing, who has been teaching for 24 years.

How likely is it that Laing’s claim will happen?

According to the National Association of Colleges and Employers’ 2011 spring salary survey, a bachelor’s degree in chemical engineering translates to an average salary offer of $66,886. It also happens that Laing’s daughter has selected the highest-compensated major for new graduates on the entire NACE list, meaning that her father is comparing himself to what may be the nation’s absolute most valuable and highest-compensated bachelor’s degree. Even “Business Systems Networking/Telecommunications” — still the tenth highest-compensated major on the NACE ranking — lists bachelor’s degree job offers with average starting salaries of $10,000 less than the chemical engineers.

A teacher with a bachelor’s degree only would need to have 25 years of service to make $68,230 in the Portage district. However, if the teacher had a master’s degree and 14 years with the district, that teacher would make $69,274 this year. If that teacher holds a master’s degree plus credits, the teacher would make $67,371 in the 12th year.

According to the state, 41 percent of the teachers in the Portage district have master’s degrees.

If Laing is in his 24th year with only a bachelor’s degree, then he’d have a base pay this year of $65,354. That would jump to $75,505 with a master’s degree, and $80,035 with a master’s plus credits, according to the teacher’s union contract. But next year, Laing hits the 25th year step and gets a 4.4 percent raise, meaning those salaries will jump to $68,230 (bachelor’s), $78,826 (master’s) and $83,556 (master’s plus credits).

But Laing might have something in common with his daughter if she lands her first job in the private sector. It’s possible that both may pay about the same percentage of their health care coverage.

Portage teachers pay 20 percent of the health care premiums, which is comparable to what the average worker pays in the state of Michigan. It is also very unusual for public schools in Michigan, which often require that teachers pay only half of the average cost sharing — or less. The Kaiser Family Foundation estimates that the average employee in Michigan pays about 21 percent of their health care costs when they sign up for employer-provided health insurance.