The state of the US working class - Part 1

Labor in an era of recession and austerity

THE SUCCESSFUL strike by the Chicago Teachers Union in ­September of last year stands in stark contrast to a series of stinging defeats for the labor movement in Wisconsin, Michigan, and elsewhere. In the first of a two-part series, Lee Sustar examines the impact of the economic crisis and the setbacks that have affected workers and unions. The second part of this article, to appear in ISR issue 89, will discuss the impact of the Chicago Teacher’s strike, the prospects for revitalizing the labor movement, and the role of the Left.

IN THE midst of yet more dismal news for the US labor movement—the loss of nearly 3 million members since the recession, the twin catastrophes of the passage of right-to-work laws in Indiana and Michigan, the scarcely camouflaged union-busting by the supposedly pro-union Obama administration—the 2012 Chicago Teachers Union (CTU) strike stands out in bold relief.

While the established labor leaders were presiding over a decline that’s left unions with their lowest rate of representation in 97 years, a group of militant reformers leading the CTU took on the most powerful mayor in the US with a dynamic, popular strike that defeated his union-busting agenda. At a time when strikes are at their lowest level on record, the CTU engaged in social movement unionism on a scale unseen in the United States in decades. To a labor movement that clings to labor-management “partnership” at the cost of ceaseless concessions and a loss of membership, the Chicago teachers’ message boils down to this: If you fight, you can win.

Certainly more such high-stakes confrontations are in the offing—not only for teachers and other public sector unions, but also for all of organized labor. Corporate America has already succeeded in using the worst economic crisis since the 1930s to impose cuts in wages and other compensation. The next target is the social wage—government benefits such as Medicare and Social Security, which both President Barack Obama and the Republicans agree must be cut. The intent of the employers and the politicians is clear: imposing a deep and permanent cut in the standard of living for workers in order to revive US economic competitiveness.

The question is whether unions follow the CTU’s example and do what it takes to survive in this harsh new era. Will labor leaders mount the same effort to democratize the unions, mobilize the rank-and-file, and step up the struggle, even at the risk of legal sanctions? Or will unions continue to cede the shop floor to management, bow to cuts in wages and benefits, and retreat from organizing the 88 percent of workers who aren’t in unions? Can labor learn from the CTU’s outreach to the wider working class and tap the potential of its more than 14 million members—concentrated in large cities in the Northeast, Midwest and the West Coast—to support workers in increasingly nasty confrontations? Or will unions continue to be picked off and left to fight alone, lurching into action only at the last minute when management follows years of concessionary demands to finally move in for the kill? Do the brief strikes at Wal-Mart and other employers signal a new commitment by unions to organize the unorganized, or will labor fritter away the opportunity to be relevant to the low-wage workers who comprise a growing share of the US working class?

Then there’s politics. How much longer can the unions continue to tolerate attacks from “labor-friendly” Democratic politicians as a lesser evil than the obliteration threatened by Republicans? The Obama administration not only shelved the Employee Free Choice Act that would have helped unions organize, but presided over a loss of nearly 3 million union jobs, imposed a pay freeze on federal workers, placed obstacles to union organizing in federal agencies, and tied federal education funding to state legislation that attacked teachers’ unions. And that’s the short list.

The CTU has not broken from the Democrats. Nevertheless, the union stood up to Democratic Mayor Rahm Emanuel, who helped steamroller union opposition to the North American Free Trade Agreement (NAFTA) as a Clinton administration apparatchik in the 1990s.1 As White House chief of staff to Barack Obama, Emanuel insisted on deep concessions from the United Auto Workers as a condition of the government bailout of the auto industry, declaring, “fuck the UAW.”2 Running to Chicago to run for mayor, Emanuel made teacher-bashing central to his campaign and his first year in office.

Other unions with contracts at Chicago Public Schools took notice. They made separate deals to avoid the notorious wrath of Rahm, and the Chicago Federation of Labor praised the mayor’s privatization-driven plan to rebuild the city’s infrastructure.3 By contrast, CTU members overcame anti-strike legislation engineered by Emanuel and thumbed their nose at the mayor’s threat to seek an injunction.

The CTU strike—and its many lessons for organized labor—will be discussed in part two. But to understand the significance of the Chicago teachers’ struggle, it’s important to understand its context: a labor movement facing its greatest challenges since the 1920s.

The working class since the recession
Faced with the worst economic crisis since the 1930s, corporate America turned to the government to save themselves with bailouts and cheap credit while dramatically accelerating their long-term program of a deep and permanent cut in the standard of living for the majority of Americans. The cost of the crisis was put squarely on the backs of workers.

By any measure, the ongoing small-d economic depression has had far-reaching negative economic and social effects on US workers. Although the official unemployment rate dropped to 7.7 percent as of February 2013, the decline was due to the fact that people had dropped out of the workforce. The employment-to-population ratio remained at 58.6 percent, just 0.4 percentage points above the low recorded in the summer of 2011.4

A record number of workers have been consigned to long-term unemployment. Of all people, Mort Zuckerman—the billionaire publisher who’s mounted a relentless media assault on public sector unions as “the new privileged class”5—compared the jobs crisis today to that of the 1930s:

12.3 million today are fully unemployed, compared to 12.8 million in 1933 at the depth of the depression. . . . More than 47 million Americans are in the food stamp program, some 15 percent of the total population, compared with the 7.9 percent participation in food stamps from 1970 to 2000. Then there are the more than 11 million Americans who are collecting checks from Social Security to compensate for disability, a record. Half of them have signed on since President Obama came to office. Twenty years ago, one person was on disability for every 35 workers; today, the ratio is one for every 16. Such an increase is simply impossible to explain by disability experienced during employment, for it is inconceivable that work in America has become so much more dangerous. For many, this program is another unemployment program, only this time it is without end.

But the predicament of our times is worse than that, and worse in its way than the 1930s figures might suggest. Employers are either shortening the workweek or asking employees to take unpaid leave in unprecedented numbers. Neither those on disability nor those on leave are included in the unemployment numbers. The labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time work, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.

Altogether, the broadest measure of unemployment today is approximately 14.5 percent, way above the 7.9 percent headline number you read about [for January 2013]. The figure encompasses not only the unemployed but also the 8 million people who are employed part time because their hours have been cut back or because they have been unable to find a full-time job, and the more than 7 million people who have either stopped looking for work or are only “marginally attached” to the labor force.

Indeed, the labor force participation rate, which measures the number of people in the workforce and reflects discouraged workers who have dropped out, has dropped to the lowest level since 1984. If it were not for the dropouts, the formal unemployment rate would be around 9.8 percent. If the percentage of people looking for work now were the same as on the day that Obama was elected, the unemployment rate would be almost 11 percent.6

According to a study by the Economic Policy Institute, which found that as of December 2012, the economy was 9.2 million jobs short of what it would take to restore pre-recession employment rates. At the current rate of economic growth, full employment won’t occur until 2019.7

As usual, Latinos and African Americans suffer unemployment at much greater rates than their white counterparts, contributing to poverty rates of 27.5 percent for Blacks and 25.3 percent for Latinos in 2011.8 A February 2012 report by the US Department of Labor, straining to put a pre-election positive spin on the recovery for African Americans, had to acknowledge that Black workers—who account for about 11 percent of the workforce—continue to suffer jobless rates twice that of whites and endure much longer stretches of joblessness. Black men with full time jobs in 2011 were paid just 76.3 cents for every dollar their white counterparts received; for African American women, the figure was 84.6 cents for every dollar white women were paid.

The recovery has done little to counteract these trends, the Labor Department found:

Blacks have been more vulnerable to the drastic layoffs in government in the past two years because they make up a disproportionate share of public sector workers. Moreover, with the exception of health and education, Blacks are under-represented in the sectors that have experienced the greatest job growth during the recovery, including manufacturing and professional and business services.9

Unemployment and low pay have only compounded the damage done by the catastrophic 40 percent loss of African American wealth between 2004 and 2012 due the collapse of the housing market. While white household wealth has declined 27 percent from its peak in the 2000s, African Americans were starting from a much lower level. In 2010, the median Black family had just 12 cents for every dollar of wealth of their white counterparts. For Latinos, wealth dropped 45 percent between 2007 and 2010.10

Latino workers, who account for about 15 percent of the US working class, were also hammered by the collapse of housing construction during recession, with 1.1 million workers in that sector losing their jobs. Anti-immigrant racism and obstacles to higher education posed by a lack of documentation and poverty have left Latinos underrepresented in growing job sectors in science, technology, engineering, and mathematics.11 Added to the economic misery is the threat of mass deportation: In its first 42 months in office, the Obama administration deported 1.4 million people, mostly to Mexico and Central America, compared to the 2 million deported during the full eight years of the George W. Bush administration.12

Women workers have also absorbed disproportionate blows from both the recession and the tepid recovery. What’s striking is that before the recession, one in 10 women who worked part-time did so because they couldn’t find full-time work. As of 2011, that figure was one in five. The pay gap persists, with women’s median weekly wage in 2011 only 81.2 cents for every dollar paid to their mail counterparts.13 The early phase of the recovery saw women’s employment lag, giving rise to talk of a “he-covery.”14 A key reason: from the beginning of the recovery in mid–2009 through January 2013, women lost 454,000 public sector jobs, compared to a loss of 267,000 such jobs by men over the same period. By early 2013 the recovery had finally begun to increase job opportunities for women. But women’s gains look good only in comparison to the miserable advances for working men: By January 2013, women had regained just 64 percent of the jobs lost since the recession, compared to a 54 percent gain for men.15

But racism and sexism aren’t the only barriers workers face in finding full-time jobs with a living wage. Age is a key factor, too. Economists Dean Baker and Kevin Hasset found that:

The number of unemployed people between ages 50 and 65 has more than doubled...

A worker between ages 50 and 61 who has been unemployed for 17 months has only about a 9 percent chance of finding a new job in the next three months. A worker who is 62 or older and in the same situation has only about a 6 percent chance. As unemployment increases in duration, these slim chances drop steadily.

The result is nothing short of a national emergency. Millions of workers have been disconnected from the work force, and possibly even from society. If they are not reconnected, the costs to them and to society will be grim.16

While older workers are increasingly pushed out of the post-recession workforce, young workers have a hard time getting in. A study by the Economic Policy Institute found that the jobless rate for workers under 25 is typically twice the national unemployment rate. For high school graduates, the jobless rate topped 30 percent by mid-2012, with an underemployment rate of 54 percent. College graduates, unsurprisingly, fared better, with a jobless rate of 9.4 percent in mid 2012 and an underemployment rate of 19 percent. Moreover, “The long-run wage trends for young graduates are bleak, with wages substantially lower today than they were in 2000. Between 2000 and 2011, the real (inflation-adjusted) wages of young high school graduates declined by 11.1 percent, and the real wages of young college graduates declined by 5.4 percent.”17

Unemployment and low pay can reduce young workers’ earnings for the next 10 or 15 years.18 What’s more, the lousy pay and dead-end jobs means that college graduates are being overwhelmed with student loan debt. Since 2005, the average student loan debt has soared from $17,233 in 2005 to $27,253 in 2012—a 58 percent increase.19

A study by the Annie E. Casey foundation released in 2013 highlighted the gloomy prospects for young workers:

Youth employment is at its lowest level since World War II; only about half of young people ages 16 to 24 held jobs in 2011. Among the teens in that group, only 1 in 4 is now employed, compared to 46 percent in 2000. Overall, 6.5 million people ages 16 to 24 are both out of school and out of work, statistics that suggest dire consequences for financial stability and employment prospects in that population.

More and more doors are closing for these young people. Entry-level jobs at fast-food restaurants and clothing stores that high school dropouts once could depend on to start their careers now go to older workers with better experience and credentials. It often takes a GED to get a job flipping hamburgers. Even some with college degrees are having trouble finding work. At this rate, a generation will grow up with little early work experience, missing the chance to build knowledge and the job-readiness skills that come from holding part-time and starter jobs.20

The Obama economic program and the working class
During his reelection campaign, President Barack Obama chalked up the dire condition of the US working class to problems that he inherited from the Bush-era economic debacle. In fact, much of workers’ suffering is directly due to the administration’s economic policy. The $787 billion stimulus program, while the biggest such measure in generations, was nonetheless underpowered. It pushed austerity measures onto states and municipalities, which reacted by cutting the jobs and pay of public sector workers. Between February 2010 and January 2013, while the private sector was adding 6.1 million jobs, public sector employment shrank by 606,000, including the loss of 420,000 local government jobs.21 Teachers were particularly hit hard, not only by layoffs but also thanks to the federal Race to the Top grant money that tied funding to legislation that weakened tenure rights, imposed punitive evaluation system and opened the door for the overwhelmingly nonunion charter schools.

Further, the low-interest federal loans that helped states minimize layoffs in previous recessions weren’t forthcoming from the Obama administration. Thus the turn to public sector austerity—not as severe as in Europe, but stringent nevertheless—was begun by the White House. The cuts in social spending being prepared as the result of the “fiscal cliff” and budget deals between the White House and the Republican House, will also have the effect of lowering the social wage while maintaining low taxes on big business and the wealthy. Obama is quite direct about his proposal to cut Social Security and Medicare—programs once untouchable for even Republican presidents—in exchange for modestly higher taxes on the wealthy to help bring down the budget deficit. His aim is to lower the social wage—that is, government programs that benefit working people—to keep corporate taxes low and lock in the reductions to the government budget. As economist Robert Kuttner pointed out, the 2011 Budget Control Act locks in austerity—at a slower pace than in Europe, but brutal nonetheless: “Domestic discretionary spending—everything from Pell grants to Head Start to public health to protection of our coasts—will be cut from about 7 percent of [Gross Domestic Product] in 1976 to less than 4 percent this year, and just 2.5 percent by 2023, the lowest since Dwight Eisenhower was president.”22

Medicare and Medicaid are in the crosshairs because spending on those programs has gone from 1.2 percent of Gross Domestic Product (GDP) in 1975 to 5 percent of GDP by 2011. By contrast, government receipts—mostly taxes—are at their lowest level in relation to GDP since 1950.23 And while Social Security spending as a percentage of GDP is stable, it’s still big, at 4.9 percent, and expected to rise to 6.4 percent of GDP by the time the youngest baby boomers turn 70.24 That’s intolerable to business and the wealthy that fear that a rising tax burden would hamper US economic competiveness against a rising China and other new competitors. Thus Obama, who’s committed to carrying out capital’s agenda of keeping taxes low while reducing the government budget deficit, has repeatedly offered to collaborate with Congressional Republicans to cut Medicare and Social Security.25

In addition to the Obama budget cuts, an intervention directly into the class struggle in the private sector has come through the concessions included in the 2009 federal bailout of the auto industry. This has had profoundly negative consequences for a labor movement that went all-out for Obama in two elections.  Even the New York Times editorial board, which put its anti-labor bias on display during the Chicago teachers strike, was taken aback by Obama’s treatment of organized labor: “[T]he administration’s support for unions has been more rhetorical than real. Mr. Obama failed to keep a campaign promise from 2008 to advance legislation to make it easier for workers to unionize and made scant use of the bully pulpit as unions have come under prominent attack in Wisconsin, Indiana and Michigan.”26

Meanwhile, corporate America has prospered despite the stagnant economy. In the third quarter of 2012, corporate profits accounted for 14.2 of national income, the highest since 1950, while 61.7 percent of income went to employees, near the low point of 1966.27 Part of this boost to the corporate bottom line was based on the fact that nearly half of big US companies’ profits now come from overseas.28 But the main factor is the long-running productivity push that’s boosted output with fewer people working for less. While the overall rate of productivity increase in nonfarm private business was modest, in manufacturing productivity increased 2.2 percent, while labor costs remained flat.29

These developments aren’t the result of a White House that’s intimidated by all-powerful corporate America, as some Obama apologists would have it. On the contrary, the administration is aggressively and systematically pursuing an agenda to revive the US economy as a low-wage haven for capital. Lower labor costs and higher productivity, the White House contends, will attract investment and give new momentum to the fledgling revival of manufacturing in the United States. The 2012 Economic Report of the President flags “a shift in unit labor costs that favors US businesses over those in other advanced countries.”30 Another administration document, Investing in America: Building an Economy that Lasts, spells out what this means in an unabashed sales pitch to companies that might invest in US manufacturing: “Between 2002 and 2010, only one of the 19 countries managed to improve its unit labor cost position in manufacturing more than the US.”31 Indeed, wages are now so low that the costs of manufacturing in the United States are becoming competitive with China once transportation costs are taken into account.32 This would have seemed inconceivable just a few years ago.

It’s important not to overstate the manufacturing revival. Nearly 6 million US factory jobs disappeared between 2000 and 2010, and only 500,000 were created between January 2010 and September 2012.33 In late 2012, moreover, factory job growth appeared to have stalled.34 In fact, manufacturing activity increased while factory employment stayed flat, suggesting that employers can use new technology and speedups to boost output while keeping hiring at a minimum.35

Nevertheless, a low-wage private sector, now 93 percent union-free, is a powerful incentive for US manufacturers to “insource” jobs to this country. Cheap energy from shale gas via fracking is another lure for energy-intensive manufacturers, as the United States positions itself to be a net energy exporter by 2020.36 And if that’s not enough, business wants Congress to undertake a comprehensive rewrite of the tax code that would formalize the already low effective corporate tax rate for US companies and offer them incentives for using their cash hoard—estimated to be as much as $5.1 trillion—for domestic investment.37

Obama’s 2013 State of the Union address, hailed in some quarters as “unapologetically liberal,” focused in part on job creation, raising the minimum wage, and rebuilding the nation’s infrastructure in partnership with Wall Street. The notion that workers should have a meaningful right to organize, and that the state should continue to support those unable to work, were missing. As commentator Ned Resnikoff said of Obama’s speech:

This is liberalism, to be sure—but a new, peculiar, deracinated kind of liberalism. In the liberal philosophy expressed by this State of the Union, economic equality and workplace democracy are dead; they have been replaced with “opportunity.” Collective struggle and mutual obligation live on in generic paeans to the republican spirit; but market logic takes precedence. At least we can still dream big—but only provided it doesn’t add to the deficit.38

Can labor make a comeback?
Can the unions recover—not just as institutions, but as a factor in the lives of working people? The fact that such a question must be asked in the second decade of the twenty-first century only underscores the scale of the crisis. Certainly union members have shown a readiness to fight. The Wisconsin labor uprising of February–March 2011 captured the imagination of labor activists around the country, thousands of whom flocked to the occupied state capitol building to join weekly rallies of tens of thousands to support public sector workers faced with the virtual abolition of their collective bargaining rights.39 A few months later, the eruption of Occupy Wall Street would spark widespread solidarity from workers, prompting unions in New York and other cities to give the effort substantial political and material support before a series of police crackdowns ended the encampments.40 Yet these waves of worker activism only rarely found expression at the workplace. Unions, despite their embrace of Occupy’s protests on behalf of the 99%, have been anything but bold in confronting the 1% during contract negotiations.

Historically, three years into an economic recovery, unions could be expected to stabilize membership and improve their leverage at the bargaining table, as they have in previous economic expansions. The weak recovery that followed the 2007-09 recession was different. The depth and length of the economic downturn, and the concessionary labor contracts bargained in that period, continued to act as a downdraft on the union contracts negotiated since. There is pressure not only on wages and benefits, but also a new push for productivity that aims to decisively weaken unions at the point of production.

The 2009 federal bailout of General Motors and Chrysler became the benchmark for the latest phase of the employers’ offensive (Ford, which didn’t take the bailout money, nevertheless got similar union agreements.) Wages, benefits, and other forms of compensation were sharply reduced, and the automakers benefitted from the handoff of retiree health care obligations to union-controlled trust funds that accepted partial ownership of GM and Chrysler in lieu of cash. The result was an $80 billion reduction in fixed costs, not only through the bailouts at GM and Chrysler, but also at Ford, where the UAW took similar concessions. GM alone slashed fixed costs from $27 billion to $19 billion as a result of the bailout.41

But the 2009 bailout was also intended to radically reduce the UAW’s power at the point of production. It did so by banning strikes even when the national contract expired as well as the strikes at local plants that have always been key to union power. Work rules—the key to defending jobs and resisting the inhuman pace of the production line—were gutted. For example, the UAW agreed with Chrysler to consolidate 27 skilled trade job categories into five.42

GM’s plans can be seen in the GM assembly plant in Lake Orion, Mich., where workers were forced to transfer or agree to work for the new lower pay. Retired UAW activist Dianne Feeley explains:

Lake Orion is also a “model” in the number of outsourced jobs, with six different contractors with their own work force functioning within the plant. These workers earn $10 an hour or less, often belonging to a separate UAW unit.

The corporation has decided to outsource jobs that do not directly “produce value,” including kitting and sequencing parts for assembly, staffing the stores for tools or uniforms, transporting parts to or from the line or performing janitorial services.

Lake Orion is also a model in cutting two-thirds of the skilled trades workers it takes to run the plant. When skilled trades workers are called out to service a machine, they are instructed to teach the team leader how to repair it. In turn the team leader is supposed to teach the operator. GM estimates that every skilled trades worker who can be eliminated saves the corporation $57,000 a year, according to Kristin Dziczek at the Center for Automobile Research.43

The result of these UAW givebacks has been a stunning turnaround for the Detroit Three, with profits soaring between 2010 and 2012 and Ford’s profits hitting a new record.44

These contract changes, agreed to by the United Auto Workers in exchange for partial ownership of the companies through a health care fund, put a downward pressure on manufacturing wages in both union and nonunion companies. While the 2011 UAW contracts did boost the wages of lower-tier workers, it left the base pay of seniority workers unchanged, extending a pay freeze that began in 2003.45 Cost of living adjustments were surrendered in 2009, which means that inflation will lead to a substantial cut in real wages by the time the next contract expires in 2015. Retirees got no increase in pensions for the first time since 1953.46

Other manufacturing employers, who decades ago were forced to steadily improve wages and benefits to keep pace with the autoworkers’ advances, seized the crisis opportunity created to push similar contracts. In Wisconsin, for example, the 2011 labor mobilization was preceded by manufacturing labor contracts at marquee companies like Harley Davidson, Kohler, Allis-Chalmers, and Mercury Marine that featured long-term wage freezes, lower-tier pay for new hires, and the employment of long-term temporary workers who were union members but without most of the protections of seniority workers.47

The manufacturing employers didn’t just follow the Detroit Three’s model for wage and benefit cuts. Employers have also accelerated their drive for “lean production”—what its originators at Toyota call kaizen, or continuous improvement. The aim of kaizen is to take the time-and-motion studies of industrial engineer Frederick Winslow Taylor another step forward by limiting the time and inputs for a particular job until the production line breaks down in order to reduce costs and identify weak spots in the system. This involves eliminating traditional work assignments, instead compelling workers to operate multiple machines and work in “teams” that are expected to generate their own ideas about how to reduce costs and save time. Work was to be outsourced to low-cost contractors wherever possible. The aim, said the founder of the system, Ohno Taichi, was “manpower reduction and cost reduction.” There was resistance: if Toyota had had an independent union, “I might have been murdered,” he said.48

By turn of the century the kaizen system had been generalized across US manufacturing, and abetted by alternative work schedules such as 10 or 12-hour days. The result, writes Kim Moody, was “a shrinking workforce in manufacturing, a brutal intensification of work, a basic reorganization of the country’s industrial geography, longer and more irregular working time, and greater control over the labor process and most, if not all, of the workers in it.”49

In the wake of the recession, employers are aggressively moving to further fragment workplace organization at unionized shops. Through multi-tier wages and outside contractors, and continually implementing new labor-saving technology, employers seek to render union representation weak or irrelevant at the point of production. They are compelled to do so because the world economy still faces a crisis of overproduction. In the auto industry, for example, the employers had to find a way to boost profits despite a decline in the US market since 2008—and they succeeded. Although auto industry employment dropped some 42 percent between 1999 and 2012, new technology and the dismantling of work rules have delivered the highest level of auto manufacturing productivity since 1960.50

Despite this onslaught, autoworkers are still pushing back, searching for leverage. There have been a series of walkouts over health and safety issues and management’s arbitrary behavior at Ford plants. For example, in July 2012, workers at the Chicago Ford assembly plant, members of UAW Local 551, walked off the job when management turned a scheduled 10.7-hour workday into a mandatory 12-hour shift, and were suspended as a result.51 The workers’ rebellious mood wasn’t new: Workers in the plant—which by 2012 employed the greatest number of workers since the 1950s—had voted to reject the national Ford contract by an overwhelming margin.52

Elsewhere, autoworkers are attempting to keep the relentless push for productivity from wrecking their lives. At Chrysler’s stamping plant in Warren, Mich., members of UAW Local 869 mobilized to protest a so-called Alternative Work Schedule that forced workers to take four 10-hour days at straight time, eliminating overtime pay for Saturdays, and switching workers from day to night shifts. After a lively picket of the plant in February, veteran Chrysler worker Alex Wassell of the Committee for the Eight Hour Day and Overtime Pay, was suspended and then fired for allegedly criticizing Chrysler in public. A solidarity effort to reinstate him continued, as management tried to snuff out resistance to the ruthless new order in the auto plants.53

These are important sparks of resistance, and are a critical reminder that despite all the setbacks, workers still have leverage to resist. For the most part, however, employers see unions as weak and vulnerable, and, where possible, they are moving in to decisively weaken the unions, either by enlisting labor leaders as enforcers of two-tier deals and speedups, or simply by crushing the unions outright.

Leading the way in this latter tactic is, as usual, the heavy equipment maker Caterpillar, which defeated the UAW in two long, bitter strikes in the early and mid-1990s and has since moved thousands of jobs to nonunion plants in the South and abroad. The remaining unionized workforce is divided into two tiers, who work alongside semi-permanent temporary workers with virtually no benefits. More recently, in 2012, Caterpillar shut down a unionized locomotive engine plant in Canada to move it to Indiana on the eve of that state’s passage of right-to-work legislation.54 And despite high profits, Caterpillar also rammed through debilitating concessions at a plant in Joliet, Illinois, defeating a long strike by the International Association of Machinists (IAM).55

Boeing Co., the US’s largest exporter, also took aim at the IAM by opening a nonunion plant in South Carolina to produce its flagship 787 airliner. The union’s response was to try and block production through a National Labor Relations Board ruling that the construction of the plant was a union-busting measure. The IAM dropped the complaint once Boeing agreed to commit to production of other planes at unionized plants.56

Yet it isn’t clear that the Machinists have a strategy to organize the 787 plant in the South, where unions are scarce and weak. Many of the foreign-owned auto plants in the United States were built in the South for precisely that reason. Organizing the South, a project abandoned by labor in the 1950s as the result of a racist backlash and the anticommunist labor purges during Cold War, remains a central task for organized labor if unions are to regain their influence in the smaller but still economically crucial manufacturing sector. Much of the US revival in manufacturing has centered on the South, where low wages and largely nonexistent unions have attracted recent big investments in manufacturing from US companies like General Electric as well as Australia’s Austal shipbuilder, Europe’s Airbus consortium, and China’s Lenovo and Haier.57

The employers’ offensive in manufacturing has been generalized across the private sector, even where companies are immensely profitable. The classic example is Verizon, the latest corporate incarnation of a company that was hit with strikes won by the union in 1989, 1998, and 2000. But a series of mergers with nonunion companies and a shift towards a nonunion wireless operation has left the unionized workforce a minority among total employees. Thus when the Communications Workers of America (CWA) and International Brotherhood of Electrical Workers (IBEW) went on an 11-day strike again in August 2011 against draconian proposals on health care and pensions, they faced a much tougher battle.

The strike was militant and won widespread support, anticipating the solidarity seen during the Occupy Wall Street movement that would erupt a few weeks later. But the company dug in, and union leaders, contemplating a possible long strike, negotiated a return to work in exchange for an agreement to negotiate. The contract campaign fizzled as negotiations dragged on for 14 more months, ending in a deal that was significantly better than the company’s original demands but nevertheless contained major concessions on health care, work rules, and other issues.58

The unions must also contend with technological shifts aimed at eliminating union jobs, including a series of campaigns to push speedup and gut union power by automating and consolidating call centers, cutting the number of technicians’ garages, replacing the copper wireline infrastructure with fiber optic, and selling off parts of the copper wire operations to nonunion and/or low-wage companies. The situation is similar for the unions at rival telecommunications giant AT&T.

Some of the most sweeping union concessions in private industry have been in the airline industry, in which US government signaled the war on the unions in 1981 when President Ronald Reagan fired 11,000 striking air traffic controllers. Since then, airlines have frequently used bankruptcy court to threaten that they’d go out of business unless unions accepted cuts in wages, health care, and pension benefits. In 2002, United Airlines pilots gave the bankrupt company concessions worth $1.4 billion annually in a contract that ran from 2003-2010. A year later, union members at American Airlines accepted wage and benefit cuts of $1.6 billion to avoid bankruptcy. In 2005, Continental and Northwest declared bankruptcy on the same day, slashing billions in labor costs at the unions’ expense. That same year, United Airlines terminated its $9.8 billion pension fund, dumping responsibility for payouts on the federal government’s Pension Benefit Guaranty Corp., a move that cut pilots’ pensions in half. Delta Airlines, where only pilots are unionized, also declared bankruptcy and squeezed that union for concessions. By 2005, the big carriers had eliminated a combined $16 billion in annual labor costs. 59

Having hammered the unions, the big carriers then merged—first, Delta and Northwest, then United and Continental—to try and raise fares by dominating key markets. Finally, American Airlines joined the bankruptcy club in 2011 despite having billions on hand. The aim was to cut labor costs and prepare the way for a merger with US Airways, itself the product of mergers of companies engaged in cost-cutting bankruptcies.

The authors of a recent study of labor relations in the industry explained the dynamics: “Once one airline’s unions granted concessions, competing carriers immediately brought pressure to bear on their employees to grant similar concessions, giving rise to a period of reverse pattern bargaining, in which the tables were turned, with airlines using concessions granted by unions at other airlines as leverage to obtain similar concessions from their companies’ unions.” Deregulation of the industry under the Democratic Carter administration helped drive the change, as the CEO of the old Eastern Airlines, Frank Borman, spelled out: “In the final analysis, if nothing else, the Deregulation Act was the greatest anti-labor act ever passed by an American Congress.”60

The union response to these attacks has been muted at best, as labor relations in the airline industry are governed by the Railway Labor Act, which makes it extremely difficult to strike legally. A strike by an independent mechanics’ union at Northwest was defeated when other unions crossed picket lines.61 For their part, flight attendants have periodically staged work-to-rule campaigns as part of contract struggles.62 Generally, however, the unions have mostly bowed to concessions. To clear the way for the American-US Airways merger, for example, pilots have agreed to concessions in return for a partial ownership of the company, adopting the approach that the UAW took with GM and Chrysler.63

The Teamsters have also taken this tact as unionized freight carriers are hammered by competition from nonunion operators. The National Master Freight Agreement, the multi-employer contract that once symbolized Teamster power, has collapsed as the union made steep wage and benefit concessions for 25,000 workers in exchange for 25 percent ownership of freight operator YRC, prompting industry rivals to demand a similar agreement.64

The lackluster results of Change To Win
Labor’s biggest player remains the Service Employees International Union (SEIU), which claims 2.2 million workers in building services and health care as well as substantial parts of the public sector in many cities and states. Under former union president Andrew Stern, the SEIU racked up impressive organizing victories before breaking with the AFL-CIO in 2005 to form the Change to Win (CTW) federation in alliance with the Teamsters, the UFCW, UNITE HERE and several other unions. According to the CTW unions, the AFL-CIO spent too much money on politics and servicing members in declining industries and not enough on organizing.65

The CTW promise was to organize the unorganized, particularly in jobs that couldn’t be easily outsourced. Stern argued that the restructured SEIU was the model for an efficient, powerful labor movement: by merging locals to create huge regional or industry-specific units, unions would have the muscle they needed to stand up to employers. If union democracy was trampled in the process, so be it. Economic power is more important than allowing union members to hold their leaders accountable, Stern argued, spelling out in public what most US labor leaders have long done in practice.

The promised organizing breakthroughs were scarcely attempted. Instead, the SEIU soon launched an internal war, ousting the leadership of the union’s huge West Coast health care unit that led to the founding of the rival National Union of Healthcare Workers. The SEIU then moved to carve up UNITE HERE after that union resisted Stern’s dictates. Following Stern’s resignation under a cloud, the current SEIU president, Mary Kay Henry, a career union bureaucrat, retreated still further from organizing following the Republican breakthrough in the 2010 elections. Instead, she funneled more union money into politics and labor-community alliances such as Stand Up Chicago and Good Jobs LA.66 The aim was to create an activist base for future organizing drives that could also aid get-out-the-vote operations during the 2012 elections. Those organizations worked with the Occupy movement in some cities, opening the way for labor’s alliance with the young radicals before the SEIU’s Henry used Occupy to justify her union’s turn to the reelection of Barack Obama.67

The SEIU’s role in labor is highly contradictory. Its money and organizing efforts can inject dynamism into the local labor movement through Jobs with Justice and other efforts, but its bureaucratic highhandedness often alienates union members and potential allies. The SEIU’s efforts to organize immigrant workers helped push the rest of the labor movement into pro-immigrant positions, yet it has entertained the more conservative proposals for immigration reform that would beef up enforcement and legalize the undocumented with less than full workers’ rights. The union’s success in organizing people of color in low-wage jobs shows the potential for a rejuvenation of the labor movement. Nonetheless, the SEIU’s unaccountable bureaucratic structures and a series of appalling corruption scandals are redolent of the worst excesses of the old leaders of Big Labor. And where the SEIU was once willing to undertake risky strategies such as the militant Justice for Janitors campaign in Los Angeles in the 1980s, the union now prefers to organize on the basis of making concessions, offering employers in the nursing home industry a break on wages and weak contract enforcement in exchange for a free hand to organize in other locations.

It was a rebellion against these policies by the SEIU’s United Healthcare-West unit that led to the SEIU International putting the union into trusteeship. Undaunted, the ousted leaders and dissident members of UHW went on to found the National Union of Healthcare Workers, which has won away SEIU bargaining units by stressing union democracy, workplace power, opposition to concessions, and a willingness to strike.68 Now affiliated with the California Nurses Association, the NUWH was in the midst of an election to oust the SEIU as the main union at healthcare giant Kaiser Permanente as this article goes to press. Far from being a model for labor, the SEIU highlights the contradiction of trying to reform the unions from above.

Overall, labor’s strongest remaining base is in the public sector, where the number of union members now outstrips that in the private sector. Nearly 40 percent of public workers are represented by unions, despite anti-union laws that prohibit public sector unions in most of the South. That’s made the nation’s largest public sector union, the American Federation of State, County and Municipal Employees (AFSCME), a target for traditional anti-union forces as well as politicians from both main political parties who are carrying out the austerity agenda at public workers’ expense. Thus along with Wisconsin Governor Scott Walker’s successful bid to strip unions of their power came sweeping attacks from Democrats—a cut to state workers’ pensions by Governor Andrew Cuomo in New York, a new round of concessions by Governor Jerry Brown in California and the cancellation of state workers raises by Governor Pat Quinn of Illinois.69 The attack on teachers’ unions—about which more below—is now driven by law in many states as the result of legislation attacking tenure and boosting charter schools, all passed in order to make states eligible to compete for the federal Race to the Top grants.

Then there are thousands of local struggles by public sector unions who find themselves under fire from budget-cutting politicians, often Democrats. The most extreme case is Detroit, where the mayor and city council have made use of a state law for emergency financial management to force through crippling union concessions and threaten to simply impose new contracts.

Labor’s upcoming battles
The public sector will continue to be the flashpoint for labor in 2013. The Postmaster General is on track to slash tens of thousands of jobs by closing sorting facilities and eliminating Saturday mail delivery. Teachers will continue to be hit by aggressive contract demands for concessions. AFSMCE, the largest public sector union, is beset by hundreds of demands for contract concessions from state and local governments, even as the union faces the loss of most of its membership in Wisconsin following the passage of the law restricting public sector union bargaining.

In the private sector, the waterfront is simmering with labor tension. The International Longshoremen’s Association has an agreement for the East and Gulf Coast ports that saw employers back off some of their aggressive demands following talk of strike by the union, one of the most conservative in the labor movement.70 On the West Coast, operators of grain terminals are demanding the same terms as the International Longshore and Warehouse Union (ILWU) granted to grain giant EGT. 71 A bitter struggle in 2011 by the union—which involved workers blocking freight trains carrying scab grain—highlighted the potential for militant labor struggles and won widespread solidarity from the Occupy movement.72 Nevertheless, while the fight forced the company to back down on running a scab operation, it led to a contract below the standards of other union grain terminals. Thus in another test of strength, grain employers at Vancouver, Washington, locked out an ILWU union local February 27.73

A struggle by the ILWU office clerks in the Los Angeles/Long Beach port highlights the aggressive demands of employers as well as the power of union solidarity. When longshore workers honored the office workers’ strike in late 2012, the biggest port in the US was shut down for days. However, ILWU officials, apparently nervous about the scale of the confrontation that the strike created, bowed to concessions, urging workers to accept a contract that eliminated some 50 jobs through attrition. Workers voted down the deal once before bowing to pressure and voting up the agreement.74

Collective bargaining will be tough for the foreseeable future. The annual preview of collective bargaining agreements by the Bureau of National Affairs (BNA), a private research firm, found that labor contracts in 2013 are expected to include wage increases at or below the rate of inflation with continued pressure for union concessions on health care and retirement benefits. With 1.9 million fewer workers covered by union contracts in 2012 compared to 2008 amid the prolonged pressure of mass unemployment, “the shaky economy since the recession has contributed to a growing vulnerability among workers through moderation in labor contracts negotiated in recent years, workers’ mostly stagnant wages, attacks on collective bargaining rights and workers’ benefits in certain states, declining union membership, and labor’s declining share of the economic pie.”75

Even so, some 20,000 labor contracts covering 2.1 million workers are set to expire or be negotiated in 2013, presenting unions with the opportunity to recover some lost ground in an improving economy. The biggest contract covers more than 250,000 Teamsters at UPS, where starting pay for part-timers is just $8.50 per hour—the legacy of a two-tier contract negotiated in 1987 that cut that pay rate by 25 percent. If part-timer pay had kept pace with inflation since then, the wage rate would have reached $16.17 per hour in 2012.

The part-timer’s plight was the focus of the popular 1997 UPS strike, labor’s most significant win in recent decades under the leadership of the late Ron Carey. While the strike boosted part-time pay by just 50 cents an hour, it forced UPS to create tens of thousands of new full-time jobs for part-timers. Today’s Teamsters, however, led by James R. Hoffa, have accommodated UPS by dropping the fight for part-timers and conducting quiet, early negotiations without activating union members. The union also undercut itself in 2007 by agreeing to substandard pay at the UPS Freight division as part of deal to organize the drivers who came to the company through a merger. In return, the Teamsters allowed UPS to pull 44,000 workers out of the Teamsters’ Central States Pension Fund.76

Nevertheless, the Teamsters have some bargaining power in the growing company as drivers—still well paid at $31 per hour—push back against mandatory 10 and 11-hour days and Big Brother-style electronic surveillance. Another factor is that the Teamsters’ top negotiator for UPS is maneuvering to succeed Hoffa as union president. Teamsters for a Democratic Union, the longstanding reform group, is pushing a campaign against management harassment as part of the UPS contract campaign. 77

The other big upcoming contracts cover hundreds of thousands of grocery workers represented by the United Food and Commercial Workers (UFCW). Pressure from nonunion grocery industry operators Wal-Mart and Whole Foods has increased after UFCW leaders threw away the chance for victory in the long Southern California strike in 2003. The union did claw back some of the concessions in that defeat in its 2011 Southern California contract campaign, eliminating a two-tier health plan.78 The union has also shown some rare boldness in its support for the OUR Wal-Mart campaign, which saw a series of strike actions at dozens of stores across the United States. It isn’t yet clear if the union will support a long-term organizing campaign at Wal-Mart (for legal reasons, the UFCW had to disclaim such an effort in order to avoid a penalty from the National Labor Relations Board).79 An even bigger question is whether the union’s more assertive approach to Wal-Mart will be matched in the upcoming grocery contracts, where starting wages remain very low and benefits are under pressure. Yet the UFCW, long considered among the most bureaucratic and ineffective of the big unions, has tapped into the pro-union sentiment of low-wage retail workers, a positive sign for future organizing. The SEIU, moreover, has backed efforts by other low-wage retail workers, such as the Fight for Fifteen in Chicago, an effort to boost pay in downtown stores to $15 per hour.80

Developing a program to organize such workers will be central to labor’s comeback and to prevent the further deterioration of working-class living standards. The McJob is not a “niche of the labor market reserved for the uneducated few,” warns Eduardo Porter of the New York Times. “Rather, it might be the biggest job of our future.”81



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Issue #101

Summer 2016

Socialism in the Air

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