According to Bureau of Labor Statistics (BLS) provisional estimates, in July 2003 the seasonally adjusted civilian labor force in Michigan numbered 5,130,300, with approximately 377,600 workers unemployed, yielding an unemployment rate of 7.4%, compared to the national average of 6.2% for the same period. Since the beginning of the BLS data series in 1978, the highest unemployment rate recorded was 16.3% in November 1982. The historical low was 3.1% in March 2000. In 2001, an estimated 5.1% of the labor force was employed in construction; 21.5% in manufacturing; 3.7% in transportation, communications, and public utilities; 19.6% in trade; 5.0% in finance, insurance, and real estate; 24.7% in services; 12.5% in government; and 1.9% in agriculture.
Michigan's most powerful and influential industrial union since the 1930s has been the United Automobile Workers (UAW); its national headquarters is in Detroit. Under its long-time president Walter Reuther and his successors, Leonard Woodcock, Douglas Fraser, Owen Bieber, and Stephen Yokich, the union has been a dominant force in the state Democratic Party. In recent years, as government employees and teachers have been organized, unions and associations representing these groups have become increasingly influential. Under the Michigan Public Employment Relations Act of 1965, public employees have the right to organize and to engage in collective bargaining, but are prohibited from striking. However, strikes of teachers, college faculty members, and government employees have been common since the 1960s, and little or no effort was made to enforce the law.
Certain crafts and trades were organized in Michigan in the 19th century, with one national labor union, the Brotherhood of Locomotive Engineers, having been founded at meetings in Michigan in 1863, but efforts to organize workers in the lumber and mining industries were generally unsuccessful. Michigan acquired a reputation as an open-shop state, and factory workers showed little interest in unions at a time when wages were high. But the catastrophic impact of the depression of the 1930s completely changed these attitudes. With the support of sympathetic state and federal government officials, Michigan workers were in the forefront of the greatest labor-organizing drive in American history. The successful sit-down strike by the United Automobile Workers against General Motors in 1936–37 marked the first major victory of the new Congress of Industrial Organizations. Since then, a strong labor movement has provided manufacturing workers in Michigan with some of the most favorable working conditions in the country.
The US Department of Labor reported that in 2002, 914,000 of Michigan's 4,335,000 employed wage and salary workers were members of unions. This represented 21.1% of those so employed, down from 21.7% in 2001 and from 22.6% in 1998. The national average is 13.2%. Michigan is one of only four states with a union membership rate over 20%. In all, 953,000 workers (22.0%) were represented by unions. In addition to union members, this category includes workers who report no union affiliation but whose jobs are covered by a union contract.