union booklet 2012
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Unions: the Good,
the Bad and the Ugly
How forced
unionization has
harmed workers
and Michigan
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How Unions Have Helpedthe American WorkerUnionization took hold in America during the Industrial
Revolution in the mid-1800s. At the time, there were few
laws protecting workers. Uneducated laborers worked
long hours in sweatshop conditions for little pay.
Early unions fought for better pay, safer working
conditions, and shorter work hours. They have been
credited with securing the 40-hour workweek, minimum
wage, and government oversight of workplace safety.
Michigan and federal law now grant nearly all of the
protections the rst labor organizations demanded.
Before the early 20th Century, unions were voluntary
organizations. Workers had the freedom to associate,
or not associate, with anyone they chose. Businesses
could also choose to bargain with employees as
individuals or in groups.
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There may be here and there a
worker who for certain reasons
unexplainable to us does not join
a union of labor. This is his right,
no matter how morally wrong
he may be. It is his legal right
and no one can or dare question
his exercise of that legal right.
Samuel Gompers, rst and
longest-serving president of the
American Federation of Labor (AFL)
What isRight to Work?Right-to-work laws allow employees the freedom to choose
whether or not to join a union. Section 14(b) of the Federal
Labor-Management Relations Act of 1947 (Taft-Hartley Act) gives
states the option to grant this right to employees. Twenty-two
states, mostly in the south and west, have right-to-work laws.
Michigan is one of the 28 states where workers do not have the
right to say no to paying union dues.
Right to work does not ban unions but rather takes away their
monopoly, allowing them to serve their members better.
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Union Special Treatment
n The law gives unions special treatment that is forbidden to other
businesses and associations in America. This special treatment
restricts the freedom of both employers and workers.
n Unions are monopolies free from competition. Unions are given
the right of exclusive representation, denying workers a choice
once a union is formed.
n In 28 states, employees are forced to pay union dues simply to
keep their jobs. In these states, workers do not have the right to
say no to a union.
n If a company is unionized, employees must accept a union to
bargain on their behalf. It does not matter if the workers want to
negotiate with an employer themselves.
n Through employer help, unions can take money directly out of
workers paychecks.
Unions monopoly status gives them almost absolute power in
forced unionization states. Right-to-work policies allow unions tocompete for members. This competition forces unions to act in the
best interest of their workers.
Michigan Economics
n As of July 2011, Michigan had the 4th highest unemployment rate in
the nation: 10.9% of Michigan workers were unemployed compared to
the national average of 9.1%.
n In 1965, Michigan was 9th in per capita personal income. By 2008,
26 states surpassed Michigan, which had become a comparatively poor
state, ranking 37th for per person income.
n In 2009, Michigans population dropped below 10 million for the rst
time since 2001. Michigan was the only state to lose population in the
2010 census. Detroit alone lost 25% of its population over the last decade.
n Michigan has seen the greatest loss of gross domestic product of any
state in the nation.
n The cost of doing business in Michigan is 4% higher than the national
average because of taxes and labor costs.
Michigan needs a change. Right-to-work policies are the rst step toward
turning the economy around.
MICHIGANS GROSS DOMESTIC PRODUCT
2000-2007 Growth 2008-2009 Growth Rank
MICHIGAN -0.1%Ohio
IndianaGeorgia
TennesseeAlabama
IllinoisNorth Carolina
CaliforniaMassachusetts
Texas
49
38
46
39
39
29
44
43
31
25
23
0.7%
1.3%
2%
2.7%
2.7%
1.6%
2.8%
2.7%
1.7%
3.4%
..................................................................-5.2%
................................................................................ -2.7%
.........................................................-3.6%
................................................. -3.1%
............................... -3.1%
........................................... -2.1%
..................................................... -3.4%
............................. -3.2%
........................................... -2.2%
........................................................................ -1.6%
.................................... -1.5%
Source: Bureau of Labor Statistics; Bureau of Economic Analysis; Moodys Economy.com
Power tends to corrupt, andabsolute power corrupts absolutely.
- Lord Acton
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Big Labors Anti-Economic Agenda
Unions aggressively push laws that give themhandouts, but harm the greater economy.
n Policies such as Davis-Bacon mandate federal contractors pay
a wage determined by the Secretary of Labor. This is called
prevailing wage, but in reality it is the typical union wage in an
area. Davis-Bacon gives unions an unfair advantage because many
non-union contractors are priced out of competition. Davis-Bacon
can raise costs for federal projects by as much as 20%. Citizens incur
these costs as either high taxes or decreased services. In the end,
they are handouts to unions at the expense of the public.
n A recent report by the Government Accountability Oce shows
that Davis-Bacon prevailing wage requirements caused delays for
Recovery Act (stimulus) projects at the departments of Commerce,
Energy, and Housing and Urban Development, and at the
Environmental Protection Agency.
n Project Labor Agreements (PLAs) rig the contracting process for
public construction projects to ensure that only unionized rms
qualify. They can raise the cost of construction by up to 18%. PLAs
impose burdensome requirements on non-union contractors. For
example, under a PLA, a non-union contractor could be required
to employ workers from union hiring halls, acquire apprentices
from union-only apprentice programs, and require employees to
pay union dues. One of President Barack Obamas rst acts in oce
was to require PLAs on all federal construction projects. Thankfully,
Michigan took the opposite approach in 2011 when the legislature
passed Senate Bill 165, which banned PLAs.
n Public sector employee unions are one of the key lobbies for larger
and more expensive government. Many politicians receive a great
deal of support from public unions. The unions provide donations
to help their political allies get elected. The politicians then
presumably return the favor by increasing pay and benets for the
unions. In the end, taxpayers are left with the bill. This system of
patronage has resulted in severe decits for many states, due to
overpromising benets to public sector employee unions.
n Public Act (PA) 312 of 1969 forces Michigan into compulsory
binding arbitration with police and reghter unions. PA 312
allows an unelected arbitrator to decide contracts that obligate
taxpayer dollars. Our elected representatives are eectively
removed from the negotiating process, which in turn leads toskyrocketing costs. Arbitrators often give favorable rulings to the
unions that can result in communities having to either raise taxes
or lay o employees.
n PA 345 of 1937 allows for millages to pay for the retirement
benets of police and reghters. After initial voter approval,
millage rates increase automatically cover the cost of retirement
benets. Following years of promising greater and more lavish
benetscities, villages, and municipalities can now ooad
liability from their personnel budgets directly to taxpayers. Some
local governments are incentivizing early retirement, which will
result in this burden being placed on taxpayers even sooner.
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UnderfundedPrivate Pensions
One way unions lure in new members is by promising large,
dened-benet pension plans. What they do not tell these prospective
members is that many of these plans are signicantly underfunded.
Dened-benet pensions promise a regular payment to retired
workers. Unions control these pensions, and in many cases have
mismanaged pension funds for years.
According to the Department of Labor, in 2007 only 64% of union
pension plans were healthy, being funded above 80% (in other words,
having 80 cents for each dollar owed). In comparison, 89% of non-
union plans were considered healthy. The number of union pensions
in critical status, or funded below 65%, was 12% compared to just
2% of non-union plans. Moodys Investor Services estimated private
union pensions were underfunded by $165 billion in 2009.
Pension plans for union bosses are much better funded than those
for rank-and-le workers. In 2007, the 46 largest rank-and-le unionpension plans were funded at 80%. In contrast, the average for union
ocer and sta pension plans was 96%.
The Teamsters Central States pension plan is an example of unions
mismanaging the retirement security of their members. In 2007, this
plan had only 47 cents for every dollar owed to its members.
Forced UnionismsInfringements on Freedom
No one should be forced to join or pay a private third-party organization
to obtain or keep a job.
Freedom of Association remains a central tenet of the First Amendment
of the Constitution. Americans have the right to associate with or not
associate with anyone they choose. Unions point to Freedom of Association
as the basis of their right to collectively bargain for their members.
The United Nations in their Universal
Declaration of Human Rights states:
Article 20
1. Everyone has the right to freedom of peaceful assembly
and association.
2. No one may be compelled to belong to an association.
Article 231. Everyone has the right to work, to free choice of
employment, to just and [favorable] conditions of work
and to protection against unemployment.
4. Everyone has the right to form and to join trade
unions for the protection of his interests.
Organized labors support for these rights fall short since they actively
appose the rights of workers to choose not to associate with their unions.
Unfortunately, for Michigan and the other 27 states without
right-to-work laws, employees can lose their jobs if they refuse to
associate with a union and not pay dues.
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Unions and Politics
The American Federation of State, County and Municipal
Employees spent $90 million, making them the largest
outside spender of the 2010 election.
Unions have considerable inuence over those in power.
Andy Stern, former head of the SEIU during the Obama
Administrations rst term, was the most frequent visitor
to the White House. Richard Trumka, president of the
AFL-CIO, came in as a close second.
Unions continue to lobby for the Employee Free Choice
Act (EFCA), which is their top legislative priority. The Card
Check provision in EFCA would eectively eliminate the
secret ballot in union organizing elections. This in turn,
could lead to increased intimidation by union organizers.
The bill would also allow a federal bureaucrat to author
initial contracts in newly unionized companies.
Organized labor received much of the $862 billion in
stimulus funds. Davis-Bacon and PLA provisions steered
federal contracts to union rms.
Teachers unions received over $67 billion in federal supplements to
state education costs. The Washington Post noted that the latest $10
billion was more of an election-year favor for teachers unions thanan optimal use of public resources.
Because of their coziness with politicians, unions receive favors and
billions from government coers.
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Unions Eect on the EconomyBesides denying workers freedom, forced unionization harms economic
growth. Businesses are put at a competitive disadvantage when burdened by
strict union work rules, unsustainable pay and benets, and a lack of agility
due to collective bargaining agreements.
Both workers and businesses are often shackled to collective bargaining
agreements against their will. This is why organizations such as the National
Federation of Independent Businessthe voice of small businessadvocates
for worker freedom, saying, [W]e continue to take a strong stance that no
employee should have to pay dues or fees to a union against his or her will.
A majority of Americans now believe unions mostly hurt the economy.
This means that when businesses consider moving or starting, they will avoid
places that have strong union reputations.
The Wall Street Journal has documented how right to work aects business,
noting that right to work and tax policy [stand] out as perhaps the most
important in attracting jobs and capital States that permit workers to be
compelled to join unions have much lower rates of employment growth than
states that dont. Many companies say they will not even consider locating a
factory in a state that does not have a right-to-work law.
What Michigan and the Rest ofAmerica Think About Unionsn Michigan voters overwhelmingly support giving workers the choice
to reject membership in a union and not pay union dues or fees.
According to polling data, 77% of Michigan voters would vote in
favor of making union membership optional.
n Organized labors reputation has dropped sharply in recent years.
In 2010, 42% of Americans had an unfavorable opinion of labor
unions, while 41% had a favorable opinion. This represents a
dramatic changed from just three years prior. In 2007, unions
had a 58% favorable rating versus 31% unfavorable.
n While 45% believe unions make our country weaker, only
26% think unions make the nation stronger.
n Nearly half of Americans believe unions have outlasted their
usefulness. Only 29% disagree.
n Of non-union workers, 81% do not want to join a union.
Only 9% would join if they were given the choice.
n In 2010, Michigan lost 11.7% of its union workers, a decrease
from 710,000 to 627,000.
17.0% or more
13.0% - 16.9%
9.0% - 12.9%
5.0% - 8.9%
4.9% or less
Union membership rates by state, 2010 annual average
(U.S. rate = 11.9 percent)
% mostly help
Overall, do you think laborunions mostly help ormostly hurt the companieswhere workers are unionized?
Overall do you thinklabor unions mostly helpor mostly hurt theU.S economy in general?
% mostly hurt
02
38
45
48
55
37 38 38
54 54
3936
5351
39
49
35
40
5350
39
45
46
58
52
98 99 00 01 02 03 04 05 06 07 08 0903 04 05 06 07 08 09
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Public vs. Private Unions
There are more public sector union members than private sector union
members. This is despite there being ve times as many private sector
workers in America.
While private sector unionization has been decreasing for years,
organized labor is making major inroads in federal, state, and local
government.
Public unions are one of the key forces lobbying for bigger and more
expensive government. Public employees are 40% more likely to vote
than private sector employees. Politicians cater to public unions giving
them ever-increasing compensation with hopes to secure their votes.
Public unions are one of the main reasons many states are in a scal
crisis. Their compensation packages are currently underfunded by as
much as $3 trillion. Yet, many unions refuse to compromise, instead
relying on taxpayers to fund benets that far exceed the private sector.
Michigans largest public school employee union, the Michigan
Education Association, even sued the legislature to have cuts in their
retirement package ruled unconstitutional. The union did not want
their employees to pay 3% of their salary for retiree medical benets.
The benets paid 100% of the medical and 90% of the dental, hearing,
and vision insurance for public retirees. These benets far outpaced
what most workers in the private sector have.
Public unions refuse to accept any eorts to bring their benets in line
with scal reality, even as state revenues are falling and private sector
employees are seeing reductions in their salaries or losing their jobs.
Michigan has embraced policies to help reverse this trend. The state
has enrolled most new employees in a dened contribution plan since
1997. The new employees have their own retirement savings account,
meaning the state does not bear the risk of underfunding. Michigan
must continue to pursue these types of policies and can go even further.
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Unions in MichiganMichigan has always had a reputation of being a strong union state. Unfortu-
nately, that reputation drives away business, stymieing economic recovery.
In just one year, Michigan has fallen from being the 5th most heavily
unionized state, with almost 20% of its working population represented by
unions, to the 10th most heavily unionized, with around 17% of workers
represented. This illustrates how Michigans reputation has harmed not just
the economy, but unions themselves.
The overreaching and stringent work rules mandated by unions have helped
to create one of the worst state economies in the country.
The auto industry has cut almost half its workforce in Michigan. The state
lost over 210,000 automotive jobs in the last decade from 365,500 in 2000
to 158,800 in 2009.
Young union members are among those paying for the unreasonable demands
the UAW imposed on the Big Three. New workers at UAW plants earn only
$14 an hour, half of what their veteran coworkers make under their old
contracts. Today, new UAW members are paid 20% less than the average
American manufacturing worker.
The UAW itself has lost over a million members since 1979. In that year,
the UAW had 1,500,00 members. In March 2010, membership dropped to
only 355,199 workers, the lowest number since World War II. Thanks to the
Federal Government bailout of Chrysler and General Motors, as well as
forcing self-employment daycare providers to join the UAW, their numbers
grew to 376,612 by the end of 2010. However, both of these Band-Aid
solutions to address declining UAW membership have been short lived. There
is little public appetite for more bailouts or strong-arm tactics to create
new members. In 2011, daycare owners were no longer required to be UAW
members. This will diminish the UAWs members for 2012.
New UAW leadership has signaled they want to take back recent concessions,
going back to the ruinous contracts of the last half-century. UAW President Bob
King said, Im very upset with the situation [at Ford] where there were merit
increases and [retirement savings plan contributions]. Thats wrong.
Unfortunately, the Big Three gave in to too many UAW demands and paid a
hefty price.
For years, thousands of UAW members were paid to sit in job banks or
warehouses where they were paid to do nothing.
Not all is doom and gloom for the UAW. Still, they have over a billion of dollars
in assets, making them one of the richest unions in the nation. Their strike
fund alone was over $871 million at the end of 2007. Unfortunately for their
members, the UAW sat on this money while workers were losing their jobs.
Percentage of workers unionized in U.S. and Michigan, 1989-2009
Decline in UAW Membership
1,500,000
1,300,000
1,100,000
900,000
700,000
500,000
300,000
79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09
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What Union Bosses & PoliticiansDont Want You to Know
Workers are not required to support their unions political candidates
or causes. The Supreme Court in Communication Workers of
America v. Beck said workers do not have to pay the portion of their
dues that are not directly related to collective bargaining activities.
Workers are also entitled to see how much the union is spending on
representation versus politics.
These are called Beck Rights* and apply to almost all workers
represented by unions in the public and private sector.
State and local public employees in Michigan have even greater
rights. Michigan is one of only a handful of states that has paycheck
protection laws for public workers. Michigans Campaign Finance Act
MCL169.255(6) requires unions to get permission from their members
before the union uses their dues for politics. If consent is not given, the
union must reduce or refund the percentage of dues spent on lobbyingor political donations.
Paycheck protection only applies to state and local government
employees in Michigan. Private union employees must still opt out to
keep their dues from being spent on politics.
The Catch A union can force employees to resign toexercise their Beck Rights. The employees are still required to pay
the actual cost of representation and collective bargaining.
Employees also lose all rights to participate in the union and have no
say in bargaining contracts that aect them. Further, employees risk
poor treatment by their co-workers, who may feel the employee is
not contributing their fair share.
Some politicians do not like union workers knowing about theirBeck Rights. President Obama recently canceled a requirement that
Beck Rights be posted at worksites for federal contractors.
Diculty in opting out, the loss of say in union governance, and in
many cases lack of knowledge, has led to very few union members
taking advantage of these options.
Of the 659,000 Michigan workers represented by unions, only 5%
have chosen to resign their membership and are eligible to exercise
their Beck Rights.* For more information on how to exercise your Beck Rights, go to www.unionrefund.org.Public sector workers who feel their union is not honoring their Beck Rights can call theMichigan Employment Relations Commission (MERC) at (313) 256-3510. Private sectorworkers can call the National Labor Relations Board at (313) 226-3200.
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Favors to Big LaborDuring the past decade, on average government workers earned 46% more in
salary and benets than workers in the private sector.
However, these are not the only added costs unions impose on taxpayers.
As previously noted, prevailing wage laws, which still exist in Michigan, can
increase construction costs by up to 20%. Project labor agreements can increase
the price tag for federal construction by up to 18%. But organized labor has
more tools in its toolbox for extracting special favors from taxpayers.
Buried in spending bills and other laws, organized labor and its legislative
enablers can hide provisions that require the government to buy union
products or grant them monopolies.
Recently in Wisconsin, Governor Scott Walker ended the Wisconsin Education
Associations monopoly on many of the states health insurance plans for
school district employees. The result was an immediate savings for taxpayers.
Nearly overnight, several school districts reported saving hundreds of
thousands of dollars by switching providers.
Unfortunately, even as Wisconsin moves in the interest of taxpayers, Michigan
lawmakers have proposed laws that will give more favors to Big Labor.
The proposed New International Trade Crossing (NITC), formerly known as
the Detroit River International Crossing, is a prime example of such favoritism.
The NITC, a proposed public-private bridge, would cost taxpayers billions to
build, even though the owners of the private Ambassador Bridge wish to build
another span that would expand capacity without using taxpayer dollars.
Hidden inside the NITC bill are provisions calling for the state to hire unions
as consultants and pay the 20% added cost of prevailing wages.
In the end, the bridge may be a windfall for Big Labor. But, Michigan
taxpayers must ask themselves if they can aord such giveaways during
these tough economic times.
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Union Desperationand shrill attacks
Organized labors power has signicantly decreased across the country.
They have been hemorrhaging members for years as workers move to new
non-union industries and more economically prosperous right-to-work
states. Politically, unions are losing across the country. Voters have realizedthat taxpayers can no longer aord the lavish salary and benets
of unionized government employees. Governors and lawmakers are
enacting legislation to bring scal sanity back to the budgetary process.
This has made unions more desperate to keep their power. The tone from
union bosses and their political allies has become more confrontational.
They are targeting, what they perceive, as their no. 1 enemythe Tea Party.
n On Labor Day 2011, Teamsters President James P. Hoa declared war
on the Tea Party. In his opening remarks for President Obama, Hoa
said the Tea party has got a war, they got a war with us and ... were
going to win that war. He added, President Obama, this is your army.
We are ready to march. Lets take these [expletive deleted] out and giveAmerica back to an America where we belong.
n On August 22, 2011, Rep. Maxine Waters (D-Calif.) told supporters
in California (many dressed in purple SEIU t-shirts), [As] far as
Im concerned, the Tea Party can go straight to Hell.
n Also in August, Rep. Andre Carson (D-Ind.) told the
Congressional Black Caucus, Some of them in Congress right
now of this Tea Party movement would love to see you and
me . . . hanging on a tree.
n Vice President Joe Biden went so far as to compare the Tea Party to
terrorists and at a Labor Day speech, told a union audience they
were the only folks keeping the barbarians from the gates.
Union Violence
But its not just rhetoric.
n In Monroe, Mich., a business owner was shot simply because
he owned a non-union electrical shop.
n In New York, vital emergency phone lines were sabotaged
during a strike by unionized Verizon workers.
n Union longshoremen closed a port in Longview, Washington,
took security guards hostage, damaged rail cars, and dumped
a shipment of grainall because the owner of the terminal
was using a contractor whose workers belonged to a rival
union. Longview Police Chief Jim Duscha said, A lot of the
protesters were telling us this is only the start.
It was just the start. A few weeks later, the union protesters
clashed with police after sitting on railroad tracks trying to
block a train shipment into the port. Dan Coman, the local
unions president, even admitted on camera that his members
became violent.
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Employment has grownmore in right-to-work states factBetween 1999 and 2009, non-farm private sector employment grew 3.7%in right-to-work states, but decreased 2.8% in forced unionized states.
___________________________________________________
Fewer people are getting healthinsurance because of right to work ctionFrom 1999 to 2009, the number of people covered by private employer
health insurance increased 0.9% in right-to-work states, but decreased
6.9% in forced unionization states.
___________________________________________________
Manufacturing has grownmore in right-to-work states factFrom 2000 to 2008, manufacturing has increased 20.9% in right-to-workstates, but only 6.5% in forced unionization states.
Right to Work:Fact or Fiction?Right to work bans unions ctionRight to work allows employees the option to join a union. If an
employee chooses not to join, they do not have to pay any union dues.In many cases, right to work makes the unions serve employees better
because unions have to compete and be responsive to their members.
___________________________________________________
Right to work helps the economy factCNBC recently released their Americas Top State for Business 2011
list. Seven of the top 10 states are right to work. Michigan ranked 34th.
___________________________________________________
Workers are worse oin right-to-work states ctionWorkers in right-to-work states have lower costs of living and
more disposable income ($35,543) than those in forced unionizationstates ($33,389).
___________________________________________________
More people aremoving to right-to-work states factSince 1970, the population in right-to-work states has doubled. In
forced unionization states, it has only increased 25.7%. From 2000
to 2008, 4.7 million people moved out of forced unionization states
to right-to-work states.
___________________________________________________
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Union interests are not always those of the worker.Union bosses have feathered their own nests,while allowing their unions and workers to suer.
Did You Know?n Unions ght against merit pay. In unionized rms, the only
way to get a raise is by seniority, not by working hard.
n Unions ght not only for a oor in wages, but also a ceiling.
An employer cannot give an exceptional worker a raise withoutthe unions permission, no matter how hard they work.
n Some unions would rather lay o workers than take small
benet cuts for the rest of their members.
n Employers are not always the enemy of unions. Unions ght
with themselves for dues paying members.
www.MichiganAFP.com
By F. Vincent Vernuccio, Labor Policy Counsel, Competitive Enterprise Institute
Published by Americans for Prosperity FoundationMichigan
Sources for data include:
Competitive Enterprise Institute .................................................. www.cei.org
National Right to Work Legal Defense Foundation .................. www.nrtw.orgBureau of Labor Statistics ............................................................... www.bls.gov
Cato Institute .................................................................................... www.cato.org
Mackinac Center For Public Policy .............................................. www.mackinac.org
Heritage Foundation ....................................................................... www.heritage.org
National Federation of Independent Business ........................... www.nb.com
Hudson Institute .............................................................................. www.hudson.org
WorkplaceChoice ............................................................................. www.workplacechoice.org
Phone: 517-853-9073 | Address: 222 W. Genesee, Lansing, MI 48933
Email: InfoMI@afphq.org | Facebook: http://www.facebook.com/AFPMI
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