Though Wis­con­sin has received more media cov­er­age for its new law ban­ning col­lec­tive bar­gain­ing for pub­lic unions, Michigan’s new Emer­gency Man­ag­er law is more insid­i­ous and poten­tial­ly destruc­tive of pub­lic goods like edu­ca­tion and cor­rec­tions, and pub­lic ser­vices such as road repair and snow plowing.

The ratio­nale behind the law, which was passed by the Repub­li­can-dom­i­nat­ed state leg­is­la­ture and signed by Repub­li­can Gov. Rick Sny­der on March 16, is deficit reduc­tion. It allows the gov­er­nor to appoint an emer­gency man­ag­er for any munic­i­pal­i­ty (city, town­ship, coun­ty or school dis­trict) in a finan­cial emer­gency as deter­mined by the state trea­sur­er. The emer­gency man­ag­er may dis­miss elect­ed boards. He may abro­gate any con­tract that the munic­i­pal­i­ty has nego­ti­at­ed. He may issue bonds to pay the municipality’s expens­es for which the res­i­dents of the com­mu­ni­ty are respon­si­ble – with­out a vote by the com­mu­ni­ty or the community’s elect­ed representatives.

As opposed to Wisconsin’s new law, which mere­ly banned col­lec­tive bar­gain­ing for future con­tracts, Michigan’s law threat­ens all exist­ing pub­lic union con­tracts. This threat has already had a chill­ing effect on pub­lic-sec­tor unions. For exam­ple, the city of Flint recent­ly float­ed an $8 mil­lion bond to main­tain city ser­vices. Under the threat of the Emer­gency Man­ag­er law, the fire­fight­ers union in Flint offered con­ces­sions that includ­ed an increase in the employ­ee share of health insur­ance pre­mi­ums and the elim­i­na­tion of hol­i­day pay and night shift wage dif­fer­en­tials. In the city of Pon­ti­ac, which is already under the con­trol of an emer­gency man­ag­er, the police offi­cers vot­ed to dis­solve their union.

The irony is that the state bud­get deficit in Michi­gan is a con­se­quence, not the cause, of our ills. The state fis­cal deficit ($1.8 bil­lion) is the prod­uct of a jobs deficit. The job­less rate in Michi­gan stands at 10.7 percent.

When peo­ple lose their jobs, the state los­es tax rev­enue (through reduced income and sales tax receipts). Fur­ther­more, unem­ployed res­i­dents require more ser­vices from the state (e.g., Med­ic­aid, which is par­tial­ly fund­ed by the state). The real solu­tion to the state bud­get deficit is aggres­sive job cre­ation. This must be tack­led at the fed­er­al lev­el through a stim­u­lus bill such as Rep. John Cony­ers’ ​“Humphrey-Hawkins 21st Cen­tu­ry Full Employ­ment and Train­ing Act.” This bill seeks to cre­ate mil­lions of new jobs by offer­ing fed­er­al grants to states and munic­i­pal­i­ties to fund invest­ment in infra­struc­ture (roads, bridges, schools, water and sew­er pipelines, health facil­i­ties), social ser­vices (teach­ers, teach­ers’ aides, police, elder and child care work­ers) and green tech­nolo­gies (light rail, solar and wind ener­gy pro­duc­tion). The pro­posed act is financed through a mod­est tax on finan­cial trans­ac­tions (trad­ing of stocks and bonds), and there­fore rev­enue-neu­tral. A Cony­ers’ aide explained, ​“Wall Street wrecked the econ­o­my and they have a moral oblig­a­tion to cor­rect what they have done and help put peo­ple back to work.” The bill, intro­duced on March 2, cur­rent­ly has six spon­sors in the House. Con­tact your rep­re­sen­ta­tive and encour­age them to come on board. It is time to put full employ­ment on the nation­al agenda.