Last week’s mid-term elections resulted in some significant shifts in power both in Michigan’s Legislature and in the U.S. Congress. In summary:

• Michigan’s Senate saw the Republicans increasing their majority from 26 - 12 this year to 27 - 11 in 2015.
• The Michigan House saw the Republicans also increasing their majority of seats from 59 – 50 (one independent) to 63 - 47.
• The Republican Governor, Rick Snyder is re-elected for a second term, beating Democrat and pro-organized labor challenger Mark Schauer.
• Former Congressman Gary Peters, a Democrat, is now Michigan’s junior U.S Senator

What does this mean for Michigan for the coming years?

Organized Labor’s power continues to wane. Evidence is that both Governor Snyder and Wisconsin’s Republican Governor Walker, despite being on national labor’s hit list, won re-election. They were targeted for supporting Right-to-Work and, in the Walker’s case, cutting public employees’ pensions. Their respective reelections reflect organized labor’s loss of influence around the country.

In the short run, the elections’ impact on Michigan legislative activity around employment and labor law is expected to focus on amending the Michigan Elliot-Larsen Civil Rights Act to include sexual orientation protections. It is expected that an amendment to include those protections will become part of the law, but there may be a battle over exemptions in the amendment for religious institutions.

With the elections results, a long-standing drive to eliminate Michigan’s prevailing wage law is rumored to now be in position for enactment. However both current Michigan House Speaker Randy Richardville and Governor Snyder have said it is not a priority. Both have said they have other more important non-labor issues to pursue, primarily road and bridge repair. However, Richardville’s tenure as Senate Majority leader will end at the end of this year. His successor, Arlan Meekhof, was a sponsor of Michigan’s Right-to-Work law and has expressed interest in eliminating the prevailing wage law.

Federally, the mid-term elections results were more dramatic:

• As of this writing, the Republicans have picked up eight Senate seats (results for Louisiana’s seat will not be known until a runoff election in December). Regardless, the Republicans will hold a majority (53-54 seats vs. 45 currently) in the Senate for the first time since 2006.
•  In the House of Representatives, where Republicans already held a majority, the midterm election saw the GOP strengthen its majority from 233 seats to at 244 seats with some yet to be determined, the largest majority it has held since the late 1940’s.

What does this mean for Michigan and employers?

• The Affordable Care Act could face a repeal effort, but a general repeal of the law is considered highly unlikely. Senate Republicans would face the same problem the Democrats have faced since 2006—not enough of a majority to get the 60 votes needed to overcome the threat of filibuster. And even if they could pass such a bill, it would face a certain veto by President Obama. However it is likely that Congress would make an effort to negotiate some of the ACA’s more objectionable features out of it, and may succeed in doing so. For example, only 40 hour per week employees would be eligible for healthcare.  Employers would like to see an easing of corporate reporting and coverage requirements. Also, the medical device tax is a target. Removing that component of the ACA would help firms such as Kalamazoo-based Stryker Corporation.
• As a side note, the U.S. Supreme Court has decided to take on the issue of whether the federal health exchange, which Michigan residents use to purchase health insurance under the ACA, can be considered a “state exchange” for purposes of premium subsidies. Presumably, a decision to disallow subsidies for policies purchased through the federal exchange would greatly harm the ACA since 36 states, including Michigan, use the federal exchange in lieu of state-run exchanges.
• The U.S. Chamber of Commerce would like to see reform on plaintiff’s litigation restrictions and other business interests would like to see tax reform, i.e., tax cuts.
• In addition, the new congress could enact budget legislation that limits the power of regulatory agencies by failing to fund regulatory initiatives, as rulemaking has been considered imposing too much burdens on businesses.
• Democrats would still like to see a higher federal minimum wage. On the morning after the election, Senator-elect Peters told WWJ radio that raising the minimum wage would be one of his highest and first goals when he gets to Washington. Republicans, with their majorities in both houses, wills surely stifle any such legislation.
• Also the day after the election, President Obama vowed to use his executive powers to permit undocumented aliens to stay and work in the country despite stalled immigrations reform. Republican leaders quickly responded that this would kill any bipartisan attempt at solving the long standing immigration issue.
• Another area where business is looking for relief from the new Congress is in the energy sector, specifically from the Environmental Protection Agency’s (EPA) attacks against “energy security,” which is code for drilling, fracking and piping oil as well as stifling the use of other fossil fuels.

Sources: The Detroit Free Press, The Wall Street Journal, Gongwer, NAM Economy Daily e-newsletter