Michigan is one step closer to repealing right to work; why the end of two-tier wages at Caterpillar shows corporate America’s immense power over workers.

Interesting developments have happened across the labor movement so far in 2023.

Earlier this week, the Michigan Senate voted to repeal the 2012 right-to-work law passed under former Republican Gov. Rick Snyder. After the bill goes back to the House to conform it to the slightly different Senate version, it will likely head to Gov. Gretchen Whitmer’s desk for her signature.

Bridge Michigan reported how Democrats pulled a savvy move to fortify the bill’s longevity; they attached a one-time $2 million for the Michigan Economic Development Corporation to implement the reversal of right to work. In Michigan, under the state’s constitution, laws cannot be overturned through referendums if they have appropriations attached to them.

In effect, Michigan Democrats made it so that if Republicans want to repeal the repeal of right to work, they need to attain a governing trifecta. Republicans in the state have pointed to how this move will test Whitmer’s previous statements about lawmakers (namely Republicans) for abusing this measure. In a 2019 executive order, she said: "I intend to veto legislation that circumvents the right to a referendum."

This week, Whitmer told reporters in Michigan, "I did not ask the Legislature to put that part into the bill, and it certainly is not on my agenda. But I am going to sign a bill that restores workers’ rights."

Before the bill’s passage in the Senate, business groups were brainstorming how they could amend the state’s constitution to undermine the right-to-work repeal. Whatever way the chips fall, organized labor’s strength in Michigan will now enter a new era. And state Republicans will be forced to navigate a new political landscape.
Something else that caught my attention this week: United Auto Workers (UAW) members across four locals ratified a new six-year contract with the construction and machinery behemoth Caterpillar. The key provision won by UAW members was the rescinding of the two-tiered contract system, which workers were compelled to agree to in the concessionary bargaining of 2005.

Even Caterpillar celebrated the end of the tiered system, obviously in business-friendly terms. On the company’s website, under "Positive Impacts," they said:

We’ve also responded to changing labor market conditions. Between November 2021 and July 2022, we made two wage adjustments that resulted in increased pay of more than 8 percent. 97% of employees are on the same pay structure, regardless of hire date.

The key point is that virtually all workers are on the same pay scale. When I reported on striking Kellogg workers from Battle Creek, Michigan, in late 2021, striking workers explained to me that the entire purpose of a two-tier system was about decimating a previous generation’s gains from collective bargaining. Many of them described it as a battle against extinction, because at some point, all the older workers will retire, and all current and future workers will never see benefits and wages comparable to those of their predecessors.

It seems that’s exactly what has happened at Caterpillar. In an excellent Twitter thread written by the National Labor Relations Board attorney Brandon Magner, he explained that Caterpillar killed the two-tier system because it was no longer necessary. For example, an entry-level union worker at Caterpillar in 1997 started at $18.62 an hour. In 2022, that same position makes $17 an hour.

In one sense, the end of the two-tier system at Caterpillar resets the table for workers. But on the other hand, it’s a stark reminder of just how much organized labor has lost in the 21st century.