In his 1950 book The New Society, Peter Drucker observed that there was “no other institution in our society that is so beset by an insecurity neurosis” as the labor union. The reason was structural.
“The enterprise can operate without the union but cannot operate without the management,” Drucker pointed out. “Even the strongest and most powerful union cannot claim an indispensable function, as does management, but rests its position on contract, legal sanction and political support, all of which are revocable.”
Just how revocable became clear this week, when the state of Michigan, traditionally a stronghold of some the nation’s biggest labor unions, passed laws making itself a “right-to-work” state. That means labor unions can no longer require employees in a business to join and pay dues. Or, in other words, you can work on the factory floor at General Motors without joining the United Auto Workers.
Michigan Governor Rick Snyder signed the bills into law and said, “I view this as an opportunity to stand up for Michigan’s workers.” Union supporters are apoplectic; union opponents are delighted.
Although the issue at stake is a not a simple one, Daniel Fisher of Forbes offers a usefully succinct summary of the divide: “Supporters of the legislation say it honors workers’ freedom of association and protects them from being forced to contribute to political causes they disagree with,” he writes. “Opponents say rich capitalists favor such laws because they divide workers and deprive unions of the dues they need to be effective.” (Fisher, for his part, feels the change “might be good, over the long term, for the greatest number of employees.”)
And what would Drucker say? As someone who was a consultant to several unions, Drucker was sympathetic to both sides of the management-union divide. Precisely because a union’s strength rests upon shaky foundations, Drucker felt it was natural for a union to demand that membership be a condition of employment. “The union needs security,” Drucker wrote. “The ‘open shop’ makes it certainly very hard for a union to operate except as a negative and disrupting force.”
But, while believing that organized labor served as an essential balancing force against corporate power, Drucker also thought that unions often went overboard in seeking out security. “The standard union-security provisions give the union a control over the citizen which no society can allow to a private organization,” Drucker wrote, “and which a free society cannot even allow to its government without stringent checks on its exercise.”
What do you think: Did Michigan do the right thing in becoming a right-to-work state?