THE POLITICAL and economic setting facing the union movement today is, perhaps, the most difficult since the Great Depression. Unions had already confronted two decades of unrelenting assault from neoliberal policies of labor market flexibility, austerity, and political conservatism. Then, the global financial crisis triggered by defaults in the U.S. subprime mortgage market starting in 2007 ripped across the entire world market. Indeed, many forecasts for 2009 are projecting negative growth for the world economy as a whole for the first time since the 1930s. It is no longer uncommon to hear discussion of the possibility of depression from those most apologetic for capitalism.

The extent of the economic slowdown already makes for sober reading. In the fourth quarter of 2008, economic output fell, on an annualized basis, by 6 percent in both the U.S. and the Euro zone, and an astonishing 12 and 20 percent in Japan and South Korea respectively. Chinese economic growth has also been cut in half, and exports have fallen by 40 to 50 percent across East Asia. No zone of the world market is being insulated. Canada’s economic growth has also turned negative, and forecasts suggest negative growth on the order of 2 to 3 percent for 2009.

The tally of financial losses is quite staggering. The Asian Development Bank has estimated that financial assets worldwide have declined by some $50 trillion (which is about the same amount as annual global output). Western banks have written down about $1 trillion in assets, and estimates run from $3 to $5 trillion of losses in the banking sector alone. The U.S. government has already committed $9 trillion to its financial sector in various forms to maintain solvency. The sheer magnitude of the debt means that depressed economic conditions are likely to be long-lasting, and the distributional struggles very intense over how the bad debt—“toxic assets” is the euphemism of the day to disguise the massive market failure and incompetency of the financial sector—is destroyed, socialized, or inflated away.

The financial chaos is causing untold damage to workers. The International Labor Organization (ILO) has suggested that global job losses could reach as high as fifty-one million for 2009. In Canada, the devastation in the labor market is already immense. Unemployment has climbed to 7.7 percent, with almost 300,000 jobs being lost since October alone, and almost all new jobs created are part time.

Capitalist strategies
It is impossible to calculate how deep or prolonged the economic recession might be. Competitive imperatives will compel capitalist firms (as well as state employers) to restructure workplaces and challenge union contracts. This will build on what is now a three decades old “employers’ offensive.”

The offensive emerged in the late 1970s as capitalists attempted to restore company profitability and control over the labor process after considerable erosion during the postwar boom. The rate of profit had fallen by about half over the postwar decades across virtually all zones of the world market. The fall was especially sharp in North America. The decline in profit rates coincided with a push by unions and workers to gain an increasing share of output, to expand public services and to address inequalities facing women and racial minorities. These efforts were backed by the largest and longest strike wave in the history of the advanced capitalist countries—with Canada consistently leading in days lost due to strikes—from the mid-1960s through the 1970s.

The capitalist classes responded with a number of strategies to the union militancy and declining profits. At the level of the state, neoliberal policies from the 1980s on deregulated markets, imposed fiscal austerity, cut welfare, liberalized trade and capital flows, and so on. In terms of workplaces, this meant increased “flexibility” in terms of job controls, wages, and employment.

In terms of wages, for example, the focus was on curbing real wage gains for workers and breaking a linkage between productivity gains and annual wage improvements. More of output increases would thus go toward profits. This initially occurred in the 1970s via inflation eroding bargained money wages. But from the 1980s on it came in the form of pressures from high unemployment rates restraining collective bargaining demands. Except for a few years, the wage austerity has been unrelenting.

A number of other strategies radically reshaped work relations. Firms have reorganized their labor processes into international production networks and shifted work into low-wage, weak union production zones. Information and communications technologies have facilitated the introduction of “lean production” intensifying work processes. Employers have broken with “standard” work arrangements and increasingly resort to contingent work arrangements, cheap migrant labor pools, and temporary work programs. In collective bargaining, unions increasingly trade off wage restraint and workplace concessions against job security, agree to co-management schemes for firm competitiveness, and even enter into “voluntary recognition agreements” to gain members while giving up the right to strike and other job controls. The employers’ offensive has made “competitive unionism” the dominant practice, in both the public and private sectors, in North America.

The economic crisis has made employers even more militant in their demands for wage austerity and concessions. One strategy has been cuts to negotiated health benefits (insurance plans in the U.S.) for current employees and retirees, as well as other benefits. Another emerging strategy is to redefine—or even walk away from—pension obligations, as has occurred in the steel and auto sectors and in numerous nonunionized companies. Work intensification is also occurring as workers are being pushed to give up time off, holidays, work breaks, and so forth. And capitalists are increasingly using bankruptcy proceedings (or the threat of it) to crack open union contracts and demand sharp cuts to wages and benefits. The airline and steel industries in both Canada and the U.S. have adopted this strategy; it is now most visible in the auto manufacturing and parts sectors. In the public sector, such cuts have long been a consequence of privatization.

The underlying logic of all these strategies remains shifting the share of new value produced toward company profits and away from workers’ wages and expanding public services. There is little in current collective bargaining that is not reinforcing the worst features of neoliberalism.

New political openings?
Up to the financial crisis, these capitalist strategies proved quite successful in reestablishing profitability and capitalist power. This is not to say that growth was at the same pace as the postwar period or that economic hardship did not result for most workers. As Marx pointed out in Capital, the “general law of capitalist accumulation” is the amassing of profits and wealth at one pole and a reserve army of labor and social needs left unmet at another.

Marx also argued in Capital that each phase of accumulation contained the seeds of its own destruction. The internal contradictions of neoliberalism are now readily apparent: fictitious capital and debt massively growing relative to the growth of productive capacity and the deterioration of public services; wage compression leading to increasingly indebted working classes and unstable conditions for effective demand; the undermining of extra-market regulatory capacities to constrain capitalist competition, speculative bubbles, and fraud as an endemic feature of financialization; and huge international payments imbalances reinforcing dependence on the world market while spreading its potential instabilities.

Neoliberal and free-market ideologies are now totally discredited. But capitalist strategies and government policies are attempting to reconstruct neoliberalism as the basis for again restoring capitalist profitability. This is the political challenge the union movement now faces.

Many union activists had already been pointing out for some time that conventional collective bargaining strategies and union politics were only leading to further setbacks and concessions. The economic crisis has now made this obvious to everyone. Existing union strategies are neither confrontational enough to challenge capitalist workplace strategies after years of concessions. Nor are they politically ambitious enough to form the necessary anti-capitalist strategies to form the political agendas and organizational capacities to forge an alternate approach to the crisis.

There are, however, several hopeful signs of union renewal that could begin to chart a new direction. In North America, some of this has come from “living wage” struggles led by local labor councils in major cities, in alliance with community groups, to reach out to the low-waged and unorganized, who are predominantly women and people of color. The mass immigrant rights May Day protests, as well as the day-to-day campaigns for the protection of non-status workers, have taken place outside the main union movements, but also led to new linkages and alliances. A number of campaigns—notably some of the anti-privatization struggles around health care, universities, and municipal services—have had successes across several countries. These community-union alliances, often coupled with major campaigns and demonstrations, suggest enormous potential.

There also have been interesting examples of a new organizational internationalism amongst unions. The efforts to coordinate aspects of collective bargaining in the steel, auto, and health care sectors, extending from North America to both Europe and Latin America, to confront work issues spread across international production networks, is one example. The campaign against the militantly anti-union Wal-Mart is also suggestive. International solidarity campaigns, such as those with Palestinian workers in the Occupied Territories and inside apartheid Israel, against the continued assaults on unionists in Colombia, for the rights of migrant workers, or for the rights of workers in countries like Venezuela to experiment in workers’ control, also are promising signs of organizational renewal.

In the context of the economic crisis, it is necessary to form a set of demands that might converge across different struggles and sectors to embed an anti-market logic in bargaining that might offset the worst features of the slowdown. In terms of workplace struggles, a core set of campaigns might be:

• the fight against concessions in wages and benefits;
• in the preservation of negotiated pensions;
• building in annual reductions in work time within wage negotiations;
• support for plant occupations and community seizure of assets, particularly in cases of bankruptcy and firms receiving state subsidies; and
• extension of all other forms of hours reduction in terms of parental leaves, annual holidays, overtime, and so on.

A set of union demands directed at the economic crisis is also important:

• the overhaul or unemployment insurance systems in terms of benefits, principles of eligibility, and administration;
• industrial strategies directed at ecologically responsible production;
• massive extension of “green jobs” in the culture, leisure, and sporting sectors;
• nationalization of the banking sector;
• building a national child-care system;
• nationalization of the transportation sector and development of a national mass transit strategy; and
• establishment of a national housing program.

Ways forward
These types of demands, of course, have been percolating through the union and socialist movement for some time. They would also require the formation of basic planning capacities in a quite different kind of state than now exists. They will receive no support from the ruling-class power structures in Canada or the United States. They will depend on reversing the decline of the union movement and the wider impasse of the left. Working-class political organization has in the past achieved a great deal: leading decolonization struggles; campaigning for the expansion of freedoms and equality to women and racial and sexual minorities; improving wages and benefits; and agitating for the extension of universal welfare states.

The social forces that achieved these gains are now quite something else: the communist parties have all but disappeared even in places where they once held power (or they have made their peace with capitalism, as in China); the social democratic parties now chart a “third way” and no longer even pose a reform agenda to neoliberalism; unions are in retreat; and many civil society movements have evolved into professional non-governmental organizations navigating the grant economy. The central political coordinates for labor movements over the last century—being for or against the Russian Revolution; attempting a vanguard seizure of the existing state apparatus or reforming it piecemeal; conceiving unions as primarily the industrial wing of this or that political party—no longer provide any kind of map for the struggles unions and workers now confront.

For a brief moment, it seemed as if a decentralized “network politics”—a “movement of movements”—would provide, if not a map for the future, a renewed political capacity for the left. It was represented in the hopeful “Teamsters and Turtles” slogan of the heady days of the anti-globalization movement. But apart from episodic demonstrations and annual social justice fairs, the networks have broken apart more often than they have provided new organizational nodes. There has been almost a complete lack of organizational grounding in the day-to-day struggles of working-class communities, workplaces, and unions.

This “anti-power” politics is now being eclipsed by new political experiments beginning from—and not against—organizational commitments to unions and political parties. In Latin America, this has taken place under the banner of building twenty-first century socialism in a number of countries. A “new” New Left appears to be emerging from the margins in Greece, Germany, France, Portugal, and other places as well.

Under the pressure of events, some sections of the North American left are also beginning to pose the question of how to build anti-neoliberal—and at times anticapitalist—alliances and a new political organization of a pluralist left. From their anchor in workplace struggles and in particular communities, a renewed union movement is a crucial component of such a new left. Indeed, in representing the deep diversity of workers and their issues—in terms of gender, racial background, sexual diversity, and so forth—unions have been leading society in this area over the period of neoliberalism rather than following it.

Moving on will require forming new political capacities and an organizational openness and creativity that the left in North America has not shown for some time. The long decline of unions in the face of powerful capitalist strategies to restore their power over the neoliberal period had already made this clear. It has now become an imperative. That realization is always the point of a new beginning.

A version of this appeared in Canadian Dimension. Reprinted with permission.