Every commentator of every stripe concedes that US workers have been battered over the last five years since the onset of the global economic crisis. What most fail to concede is that the battering was the direct result of a one-sided class war.
From every perspective, measured by every economic indicator, all US workers-- those organized into trade unions and those not-- have been hammered relentlessly. Unemployment, measured by the government's least telling index, remains unconscionably high. Labor force participation, a better measure of the job picture, continues to decline. And the jobs that do become available are unprecedentedly part-time, low-paying, or temporary.
Wages are stagnant or declining in every sector and labor's share of national wealth continues to atrophy. Benefits are under attack with workers’ contributions to existing benefits growing and employers’ share shrinking.
The oft-cited road to success for working class youth-- a college education-- has proven fool's gold. The average student is saddled with $25,000 in student debt and a marginal job that retards getting out of debt and capturing meaningful savings.
At the same time, a “recovery” has occurred: production and national wealth have rebounded to and surpassed their pre-crisis levels. Profits and profit growth are well above historic levels and trends. And the stock market has revived energetically.
The widely heralded “recovery” has only been a recovery for the very wealthiest. A recent study by the formidable economic research team of Saez and Piketty shows that 95% of the income benefits of this one-sided recovery have accrued to the top 1% of income recipients. The other 99% must settle for a tiny share of the meager remaining 5% gain in income!
That US workers’ fate and the fate of their employers and their minions are on two separate, divergent tracks is undeniable. That these two tracks are sustainable is entirely a different matter, a matter to be settled when workers embrace a fight back in the struggle between classes.
While pundits from across the political spectrum acknowledge the huge and growing chasm between the rich and working people (see, for example, Paul Krugman's Rich Man's Recovery, The New York Times), they offer little by way of explanation and even less toward addressing and correcting the condition.
Instead, they deplore and regret, condemn and rue the sorry plight of working people in the face of burgeoning wealth channeled to the privileged. They trot out a host of tired, ineffective nostrums that consistently evade changing the dynamics that invariably generate growing inequality. Slogans like “tax the rich” warm the blood, but get no political traction. And on the rare occasion when tax increases and the like survive political mine fields, the rich find ways to evade them. Given the political power that inequality confers to the wealthy, it should be no wonder that even modest reformist proposals are decisively aborted by the best “public servants” that monopoly corporations and their wealthy owners can buy.
What, then, are the dynamics that generate inequality? What really accounts for the ever widening income and wealth game between a tiny minority and the vast majority of US citizens?
No understanding of economic inequality in a global capitalist economy can begin without an acknowledgment of class. The existence of social classes is the unwelcome analytic tool that capitalist apologists devote careers to denying. Media savants and academic authorities choke on the word “class.” To them, class division is a distant memory of hereditary aristocrats and down-trodden peasants. Surely, they affirm, the rise of representative government has eradicated class distinctions.
To avoid the obvious, liberals and so-called “progressives” have created a class that simply hangs in the air, absent any supporting structures: the middle class! A favored idea embraced by politicians, top labor leaders, and social workers, the middle class is said to shrink, decline, or disappear; yet no one tells us where the lost members go!
This slick trick hopes to mask the simple fact that the US is not a classless society.
Contrary to popular mythology, social life in the US is not all harmony and bliss. Instead, it is one of conflicting and incompatible interests. Moreover, the sharpest differences, the differences that determine material well-being, are differences of social class. The great contribution of Marxism is to reveal exactly how class is best understood-- not as social position, profession, or subjective perception, but as a material relation between employer and employee. That is, the most useful discrete divide is between those who engage the labor of others and those who provide that labor. The former constitutes a class of employers and their minions; the latter-- a much larger group-- constitutes the working class.
Even a casual reflection on the relation between the two classes in capitalist society exposes a sharp and irreconcilable difference of interest. Those who employ labor share no other goal than maximizing the profit of their enterprises. Put simply, from the Mom and Pop store to the largest monopoly corporation, owners are in business to make money. While small enterprises are limited in scope and intensity, larger enterprises, especially those with investors and shareholders, are driven relentlessly to achieve greater and greater rates of profit and sums of profit.
It is the logic of capitalism to reduce the costs of economic activity and command a greater share of that activity for the owners, investors, and shareholders. From the perspective of the worker, “reducing costs” translates into a relentless attack on the wages and benefits of the working class. The less that must be shared with the worker, the more that can go toward profit.
Since the dawn of capitalism, workers have recognized the divergence of interest between profit maximization and realizing their desire to improve their economic standing. They have understood the necessity of fighting to both maintain and expand their share of the fruits of economic activity. The history of labor is a history of the development of the instruments (unions, political parties), techniques (unity, strikes, demonstrations), and ideology (class, class consciousness, class struggle) necessary to secure a greater share of the surplus generated by the labor process. And among the most advanced, visionary workers, a world entirely free of the employer/employee relationship, a world without exploitation, a world of common, social ownership, is the goal.
Thus, we can and should measure the success or failure of the working class movement by how well it has fared in the battle with employers for a greater share of that surplus.
And by that measure, or any other, not only the last five years have been a disaster, but the previous three decades as well. Income and wealth distribution has shifted dramatically in favor of the employer class and its attendants. The rich are winning a class war for the lion's share of socially produced wealth. The working class is losing even the gains of the past.
How does this happen?
While the employers have mounted an aggressive assault on workers' wages and benefits, ostensible workers' organizations have failed workers.
The Democratic Party enjoyed the support of the working class thanks to both real and imagined gains won through the New Deal of the 1930s. In the ensuing years, that high point of labor-friendliness dissipated, with its last echoes embodied in the 1976 Democratic Party platform. Of course that platform was betrayed by the Democrat President-elect, James Carter. Never again did the Democratic Party embrace labor's cause, despite Don Quixote-like efforts by Jesse Jackson in subsequent years. While establishment Democrats mocked Reagan's lame “trickle down” economics, a decade later they celebrated the same idea with their absurd slogan that “a rising tide lifts all boats.”
Obama, the latest political “friend” of labor, has so far failed to deliver anything of significance to workers in the five years of his administration, nothing that might have reversed the grinding, painful decline of working class standards of living.
Certainly the top leaders of the trade union movement have served workers no better. Accordingly, they have been punished for their failure by a sharp decline in union membership, a decline that has lead them to panic before their own fate.
Of course their concerns, born of self-preservation, are nothing compared to the devastation of the working class inflicted over the last four decades. Their failure to use the available tools of class struggle, their reliance on cozy arrangements with bosses, and their identification with the health and flourishing of corporations are policies that have proven severely injurious to the working class.
Collaboration that links the fate of the working class to the fate of the corporations has paid off handsomely... for the corporations. A recent study summarized in The Wall Street Journal submits that by the end of this decade, “Adjusted for productivity, average labor costs will beat Japan by 18%, Germany 34%, and France 35%.” The study doesn't bother to mention what this will mean for US workers, of course. Their losses to the gods of competitiveness are capitalists' gains!
To take an example, US auto sales have soared to levels unseen since before the economic crisis first struck. Corporate profits are growing at a record pace.
How do they do it?
First, the US auto industry received massive tax-payer bailouts from the Obama administration, but only on the condition that they close plants and lay off workers! So much for the Democratic Party friends of labor.
Secondly, the industry produces the same amount of vehicles with less than 80% of the former workers, a forced-march increase in productivity.
And thirdly, at United Auto Worker unionized plants, the union submitted to deep concessions. Entry level UAW workers now make $15.78 an hour, a rate commensurate with an annual wage a mere 12% above the level defined by the Federal government as “living in or near poverty.” Once, the UAW wage and benefit package was the gold standard of industrial unionism!
Because of their total capitulation to the auto industry bosses, the leaders of the once proud UAW have resorted to pursuing the organization of the Chattanooga, Tennessee Volkswagen plant by sneaking through the back door. They hope to use a European Union regulation and their cozy relation with the company to secure recognition. How else to “win” a non-union shop when union and non-union wages are virtually equal? (Actually, when relative costs-of-living are factored, they are sometimes better in non-union plants).
Indeed, there is no class war when one side is always in retreat. The rout can only be reversed if workers shed their blind support for the Democratic Party and vigorously exercise their independence. The rout can only be reversed when workers transform their unions into class-struggle weapons and launch a counter-offensive.
The future doesn't have to continue with the past.