Low wage capitalism & strategies for the coming period

Fred Goldstein, a member of the Secretariat of Workers World Party, submitted a paper to the 17th International Communist Seminar held this May in Brussels, Belgium. It summarizes the third and concluding part of his soon-to-be-published book entitled “Low-Wage Capitalism, Colossus with Feet of Clay.” Below is the first part of the summary.

The first two sections of “Low-Wage Capitalism” discuss the worldwide wage competition instituted by finance capital in the wake of the collapse of the USSR and Eastern Europe and the leaps forward in the scientific-technological revolution that made it possible. The fundamental thesis of the book’s first section on imperialist globalization is that it is laying the basis for an end of capitalist stability in the imperialist countries and a revival of the class struggle, with special focus on the United States.

The technological segmentation of the production process and of services to low-wage areas throughout the globe has allowed the bosses to pit workers in the developed imperialist countries in a job-for-job competition against superexploited workers in the poorer, low-wage countries. This process is eroding the national determination of wages. Instead wages are more and more being determined internationally under the downward pressure of low wages in the oppressed countries. This process is destroying the privileged positions of the upper layers of the working class in the imperialist countries and destroying the social foundation for opportunism in the labor movement, as first described by Lenin during World War I.

The second section of the book documents the 30-year decline of the wages and standard of living of the working class and the oppressed in the U.S. under the impact of the global race to the bottom engineered by the giant monopolies. Both of these topics were dealt with in a paper presented at the International Communist Seminar of May 2007.

The third section, summarized here, reviews the last three decades, which have seen an unprecedented retreat of the U.S. working class in the face of union-busting, demands for concessions, and the general lowering of wages and deterioration of working conditions. Yet, even during this period of retreat, the workers have shown a willingness to fight back. The labor leadership of the AFL-CIO, and now Change to Win, have led the retreat and have been the great obstacle to mobilizing the kind of classwide struggles needed to turn back the capitalist anti-labor offensive. Developing and implementing a struggle strategy will be the task of communists in the labor movement.

We start with two examples—there are over a dozen in the book—of strikes in the U.S. between 1980 and 2005.

Hormel meatpackers

The struggle of the Hormel meatpackers of Local P-9, United Food and Commercial Workers (UFCW) in 1985 in Austin, Minn., became a national cause within the labor movement and the progressive movement in general because the local decided to take a stand against concessions. In the face of opposition from the union’s national leadership, which condemned the strike and suspended the local, the Hormel workers sent agitators to cities throughout the country and got material support from more than 3,000 locals. Movement activists and tens of thousands of unionists and local officials came to the area.

Mass picket lines blocked scabs and shut down Hormel’s operations. The workers faced teargas, police attack and arrests. Gov. Rudy Perpich, a Democrat, sent in the National Guard against the strikers. But what defeated the strike, which lasted a year and a half, was the hostility of the national leadership of the UFCW and the refusal of the AFL-CIO to join the battle on a national basis.

This major confrontation, which had been brought on by Hormel, was recognized as a highly significant battle among the rank and file of the labor movement. The workers at Hormel and far beyond showed a readiness and desire to unite and fight back.

UPS Teamsters

The 1997 strike against United Parcel Service (UPS) was a powerful one that fought to reverse concessions begun in 1982. The company had won the right to create a two-tier, part-time system of employment. In August of 1997 the 185,000 members of the UPS division of the Teamsters union waged a 15-day strike that electrified the labor movement and the working class as a whole. Despite compromises made in the final settlement, it was understood, rightly so, as the first major victory for a significant section of the working class after two decades of defeat and retreat.

The strike was led by Teamsters President Ron Carey, who had democratized the union during his tenure. It was won by meticulous planning for a genuine class struggle, bringing in the rank and file at every stage. The struggle was popular in the union movement and among the working class as a whole because it was projected as a struggle against part-time and low-wage work. Sixty percent of the 185,000 UPS workers were part-time workers who earned only $9 per hour, as opposed to $19.95 an hour, plus benefits, for full-time workers.

The strike was won through a major test of strength between labor and capital. The AFL-CIO leadership supported the strike—John Sweeney promised to back the Teamsters’ strike benefit fund with $10 million a week. UPS workers forced the company to agree to turn 10,000 part-time workers into full-time employees, won raises for the lower-paid workers, and warded off an attack on pension funding.

When the strike was over, the government quickly framed up Carey on false charges of illegally providing funds for his union election. Acquitted of all charges, Carey was nevertheless driven out of the union by a government board overseeing the union.

Fearing a government attack, the AFL-CIO leadership left Carey to face the frame-up and ouster alone. Instead of standing up and challenging the government to indict the entire top leadership of the union movement, and preparing the rank and file to defend the leader who had launched the biggest union challenge to big business in two decades, the AFL-CIO leadership abandoned the struggle.

The forward momentum gained by the militant mass struggle of 185,000 workers, backed by workers everywhere, soon died down. What the mass struggle had won was diminished by the craven retreat of the leadership.

Technology and need for higher class organization

The working class in the U.S. is facing a crisis that will bring to light the urgent need for a leap forward in class organization. This crisis is taking place in the framework of the global restructuring of capitalist production and services, which had already pushed tens of millions of workers and oppressed to the edge of mass pauperization, even before the onslaught of the new economic crisis.

Technological innovation is a constant under capitalism. Ever since its earliest beginnings, each generation of capitalists has sought to more thoroughly exploit the workers, most often through the introduction of more efficient, more productive equipment.

Each new wave of technology is directed by capital precisely at eliminating the highest-paid jobs and the areas in which labor organization has been most successful. Its tendency is to drive down the price of labor power—that is, wages. The most pervasive methods of accomplishing this are to destroy union jobs; to deskill jobs, making it easier to replace one worker with another with minimal to no training, which will increase competition among workers; or to direct capital towards new low-skill, low-wage, high-profit industries and avoid unions altogether.

For the working class this means that each new stage in capitalist technological development requires greater and greater class solidarity, wider and wider organization, and more unified struggle to overcome the ever-increasing tendency by the bosses to widen the competition among workers, both at home and abroad.

Building a broad working-class movement

For the working class in the U.S., a whole new classwide approach must be taken. Marx himself a century and a half ago sketched the outlines of what is needed today.

He wrote: “Apart from their original purpose, [the unions] must now learn to act deliberately as organizing centers of the working class in the broad interest of its complete emancipation. They must aid every social and political movement tending in that direction. Considering themselves as acting as the champions of the whole working class, they cannot fail to enlist the non-society men [the unorganized—FG] into their ranks. They must look carefully after the interests of the worst paid trades, such as agricultural laborers, rendered powerless by exceptional circumstances. They must convince the world at large that their efforts, far from being narrow and selfish, aim at the emancipation of the downtrodden millions.” (Karl Marx on “The Future of the Unions” from “Instructions for the Delegates of the Provisional General Council of the First International,” August 1866.)

What does this mean concretely today in the U.S.? To take the broadest view of the potential strength of the working class and organized labor, it is essential to take into account not only the 15 million workers in the unions plus the 50 million workers who say they want a union, but the hundreds of thousands of activists and community organizers in cities and towns across the country.

The reservoir of strength from this vantage point includes the natural allies and potential members of a broad working-class movement that reaches out and gives leadership in the general struggle to meet the needs and raise the demands of the working class as a whole.

To be continued.

“Low-Wage Capitalism” will be published this fall. For information and to donate to the cost of publication, contact the publisher: World View Forum, 55 W. 17th St., 5th floor, New York, NY 10011. Call 212-463-7146.