News Story

Michigan Poorer Than Average Of Right-to-Work States

Trends show RTW states growing faster in population, jobs and income

Michigan State University Professor Charles Ballard told an audience at the Detroit Economic Club recently that per-capita earnings in right-to-work states are about $5,000 less than in non-right-to-work states.

What he didn't say was that Michigan's per-capita earnings as a non-right-to-work state were below right-to-work states in 2011.

The per-capita income in non-right-to-work states was $43,666 in 2011. The per-capita income in the 25 right-to-work states was $38,308. Michigan’s was $36,264.

In an email, Ballard said that right-to-work didn’t necessarily cause a state to have low income.

“My point is that, since per-capita incomes in RTW states are substantially less than per-capita incomes in non-RTW states, it is very difficult to make a serious case that RTW is the path to a more prosperous economy,” Ballard said. “It doesn’t necessarily say that RTW is the path to poverty, but it does point us toward other explanations.”

Mackinac Center for Public Policy Fiscal Analyst James Hohman said that it would be an improvement for the state if Michigan's per capita income reached the average of right-to-work states.

"Michigan went through a decade-long recession and is just now experiencing a sustained recovery," Hohman said. "Just how fast and how much the state recovers depends on the rules the state enacts. Michigan policymakers have made a lot of improvements to those rules, with right-to-work as the capstone."

Those saying that right-to-work per-capita income is higher than non-right-to-work states often don't take into consideration the trends when compared to forced unionization states. Those poorer states were earning less even before right-to-work became an option. In recent decades, right-to-work states have grown faster in population, jobs and income when compared to forced unionization states.

The first states to give workers the freedom to choose whether they want to pay to be in a union as a condition of employment did so in 1947.

States that adopted right-to-work laws didn't become poor because of the law. Most were struggling already. For example, Texas' per capita income was on average $540 from 1929 to 1946, which at that time put it 36 percent below the average per capita income of the states that became non-right-to-work states. In 2011, Texas’ per capita income was $40,147 and was just 8 percent below the per capita income of non-right-to-work states.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Supreme Court Justice's Problems Not Likely to Affect Generous Pension

With 20 years of judicial service, Justice Diane Hathaway could get $100K a year pension

In the face of alleged ethics violations ranging from tax fraud to money laundering, Michigan Supreme Court Justice Diane Hathaway announced this week that she is resigning.

That does not mean, however, that she will no longer be receiving taxpayer dollars. In fact, it appears that Hathaway can probably look forward to a pension that may be just shy of $100,000 a year.

The Michigan Judicial Tenure Commission has accused Hathaway of fraud, money laundering and "misrepresentations to the commission" for her involvement with a short sale of property.

Hathaway might best be remembered in connection with ads that were run against her opponent Cliff Taylor in 2008. The ads labeled Taylor, who was Chief Justice of the Supreme Court, as the "sleeping judge," based on a false claim that he had dozed off while a case was being argued.

Coupled with a well-orchestrated campaign exhorting Barack Obama supporters to vote for Obama and Hathaway, the sleeping judge ads succeeded. In an upset, Taylor, who is now chairman of the Mackinac Center for Public Policy's board of directors, lost and Hathaway joined the state's highest court.

With Hathaway stepping down, she is eligible for a state pension. According to the Office of Retirement Services, she turned in the required paperwork on Dec. 20.

"We don't have the details yet on her pension," Department of Technology, Management and Budget Spokesman Kurt Weiss said. "It's still being processed."

Nevertheless, the basic formula for computing a Supreme Court Justice’s pension is straight-forward. To determine how much of a pension Hathaway can expect, the state will use a simple formula: multiply the number of years she served by her salary and a multiplier; which in this case is 3 percent.

Hathaway has 20 years of service in the court system, dating back to 1993 when she began serving as Wayne County Circuit Court Judge, after being elected to the post in 1992. The salary figure used is the employee’s final salary, which in Hathaway’s case was the $164,610 annual figure she made as a Supreme Court Justice.

As with all employees, several specific aspects of Hathaway’s employment history could potentially alter her pension. However, based on the general formula used for judges, it appears that her pension will likely be in the neighborhood of $98,766 per year.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.