Chapter 4 -- Hi Tech, Low Pay

The Changing Character of the Working Class

During the early phase of the Cuban Revolution, Che Guevara came to New York to attend a UN General Assembly session. During his brief stay, he arranged some private meetings with progressives.

In the course of conversations about the U.S. and Cuba, he was asked whether changes in the administration here would deter U.S. aggression against Cuba. He replied that a great deal depended on changes in the U.S. working class.

These remarks were all the more interesting because at the time Guevara was regarded only as a popular and victorious guerrilla leader. It didn't appear that he was in a position to take into account the condition of the working class. What the progressive elements in this country, especially the militants among the youth, were concerned with then was a rebellion of oppressed people in alliance with progressive elements. Most of them discounted the working class as such. It is significant, therefore, that Che saw great changes in the U.S. to be contingent on great changes in the working class.

At that time (Dec, 1964) the U.S. was in a period of so-called capitalist prosperity. Aside from some minor capitalist recessions, it continued until the steep economic crisis of 1974-75.

Whether there would be fundamental changes in the consciousness of the U.S. working class has been a topic of debate for many years. Most anticipation of change in class and political consciousness has been geared to the ups and downs of the capitalist economic cycle.

Of course, for most of this century, if not for the entire course of capitalist development, that's the way it has been. Political attitudes have changed with economic conditions. The ups and downs in the cycle of capitalist economic development have been seen as the fundamental driving force in changing political consciousness, outlook and participation as a whole.

The new social composition of labor

There is, however, a new and fundamental trend which has to do not only with the ups and downs of the capitalist economic cycle, but with the social composition of the working class. It is an objective trend that arises out of the changes in the technological structure of capitalist industry, which in turn have changed the working class itself.

We have written elsewhere1 about the change as it pertains to the growing proportion of Black, Latin, Asian, Native, women and undocumented workers. That, however, could be interpreted as a mere numerical change, or one that is related to "ethnicity," as they phrase it in bourgeois sociology.

But the change in social composition goes beyond that. It involves a relative reduction in the percentage of skilled workers and a tremendous increase in the number of semi-skilled. Also, on an overall scale, it means the creation of lower-paying jobs as against higher-paying ones. It means the decline of the traditionally more privileged workers and industries with higher wages and the creation of a vast pool of lower-paid workers. This trend is still surfacing and has yet to be given any kind of independent political expression.

From a class point of view, it is truly one of the most profound, socially significant trends to emerge. The number of lower-paid workers is bound to increase at the expense of the more privileged workers.

Since we wrote on this subject in 1984, much data has appeared substantiating the shift in social composition of the working class. It is worth repeating a section of our earlier document here.

Today the working class is of a thoroughgoing multinational character. The significance of this profound change has yet to be fully assessed.

Statistics appear almost daily in the bourgeois press which show how much of the working class today is Black, Latin, Asian, Native as well as women. The most recent study shows that white males are no longer predominant in industry. The workforce is already composed of over 40% women. And notwithstanding the heavy Black and Latin unemployment, their percentage of the workforce continues to increase significantly. All of this is readily admitted in the bourgeois press.

But what has not been pointedly brought to the attention of the public is that the working class as a whole in the U.S. has changed dramatically in another sense. The predominance of the skilled over the unskilled, of the higher paid over the lower paid, has narrowed continually. . . .

Marx pointed out in Capital that, even at the height of capitalist development, during a period of upsurge, labor productivity increases as a result of the introduction of labor-saving devices and this tends to diminish the number of skilled members of the working class as against the unskilled. This has the effect of changing the social composition of the working class. It matters a great deal because, in terms of political struggle, the objective basis is laid for political leadership to be assumed by the more numerous segment of the class.

If we take into consideration that the working class has changed both socially and from a socio-ethnic-national point of view, one can say that there has taken place a wholesale change in the social composition of the working class.

The highly skilled have long predominated politically over the unskilled. This is not necessarily confined to the crafts such as carpenters, plumbers, electricians and so on. The rise of the basic industries such as steel and auto in the earlier decades also had the effect of retaining the influence of the higher paid, particularly in what were regarded as heavy industries.

What has happened, particularly in the last decade, is that the very speed of the introduction of high technology, the very sophisticated type, has undermined the privileged sectors of the working class (such as those in steel and auto) on a world scale and has begun a leveling process which has undermined the living standard of the working class as a whole.

However, it has shifted the objective basis for political leadership in the working class movement away from the more privileged sectors of the working class toward those very numerous working class elements which have had little political influence and been less articulate over the years.

What high technology has effectuated, therefore, is a sharp shift from higher-paid jobs to lower ones. It is not to be wondered at that the phrase `high tech creates low-paying jobs' has now become vogue. And therein lies the essence of the transformation of the social composition of the working class.

To be sure, it is not a finished process by any means, nor can such a process be finished. But it is a basic trend in the evolution of the working class. While it continues to ravage the living standards of the workers, at the same time it lays the objective basis for the politicization of the workers, for moving in a more leftward direction and for organization on a broad scale. The political consciousness that ought to correspond to the new material conditions of life has lagged behind, as it almost always does.

During the stormy, near-revolutionary working class struggles of the 1930s, it was unthinkable that hospital workers would be organized or that they could carry out an effective strike, as more than 50,000 hospital workers are now doing in New York City. That the hospital strikers are more politically conscious and a more militant element of the working class can easily be verified by even a chance acquaintance with them.

In almost all of the service industries, particularly those in food processing, department stores, grocery chains, transportation, the large wholesale and retail businesses throughout the country, as well as the so-called new industries which have sprung up as some of the old ones have decayed, there is a growing preponderance of new, low-paid workers. The labor force has shifted from what it was decades ago--a mostly urban white working class--to one that is of a multinational character, which does not at all enjoy the privileges which accompanied the earlier rise of the capitalist system in the U.S.

So when we talk of the working class as a class today, it is a different class than what existed a hundred years ago or even 30 years ago. The bourgeoisie tries to hide the profound social and political significance of this transformation of the working class. The bourgeoisie tries to portray the growing number of so-called service workers as `white collar,' `administrative,' and even `middle class.' In other words, it tries to divorce the service and clerical proletariat from the rest of the working class.

Again and again their continuous flood of statistics is tendentiously interpreted against the proletariat, as though the service workers are not wage workers who are exploited along with the rest of the working class. But this is a fallacy. . . .

Since this was written, many articles, studies and reports have verified this basic trend. One of the most comprehensive and at the same time most concise was the special series of reports we mentioned earlier by the Council on International and Public Affairs entitled "The Underbelly of the U.S. Economy: Joblessness and Pauperization of Work in America."

These reports showed that unemployment in the U.S. is grossly understated by the Bureau of Labor Statistics (BLS) because it routinely does not count "discouraged workers" who have given up hope of finding a job and because it does not take into account the wages lost by those who can only find part-time work. More pertinent to the point at hand, however, was the section on pauperization of work, which included the following:

Joblessness is only one aspect of the changing nature of work in America. The pauperization of work is increasingly evident. According to a recent BLS study, for example, of the persons who lost full-time jobs during the recession and were able to find reemployment, 45.7% were only able to find part-time or lower paying jobs than the ones they lost. Of the 5.1 million reported on in the BLS study who lost jobs during the recession, 45.1% were unable to find jobs at all.

Most of the new jobs created during the recovery, furthermore, have been low-paying, while high-paying jobs, especially in manufacturing, have continued to decline. Since 1982, 87.8% of new jobs created have been in the service sector. Of these, 73.7% have been in the lowest paying categories of that sector--namely, retail trade and health and business services. A full-time job in the retail trade (many are part-time) pays only $9,251 a year, well below the 1984 poverty line of $10,610."2

This report contained a number of tables containing data to substantiate these observations. The table on "Comparison of weekly earnings in manufacturing and retail trade" shows how the shift away from manufacturing has affected wages. As the report explained, "The discrepancies are substantial between the service-producing and the goods-producing sectors. Thus, the hourly wage in the retail trade is only 62.8% of the hourly wage in manufacturing, while the discrepancy in weekly earnings is even greater (retail is only 45.7% of manufacturing). This higher discrepancy is a reflection of the incidence of part-time work in the retail trade. In September 1985 workers in manufacturing averaged 40.7 hours a week while those in the retail trade averaged only 29.6."

The report continued, "These `pauperizing' trends in wages, furthermore, now affect an increasing proportion of the labor force--and those sectors that are growing the fastest--while the number of workers in the high-wage sectors is either flat or declining."

One bourgeois theory has it that the change in the social composition of the working class is due to the capitalist industrial cycle. They attempt to show that the service sector, as they call it, and high tech are relatively immune to the capitalist crisis, and are therefore able to grow while the "smokestack" sector of the economy is shrinking. However, no sector of the economy is immune to capitalist economic crisis. It affects all industries sooner or later. It's just a matter of time.

The very protracted banking crisis, which has been in the process of development since 1981 but has been artificially avoided by monetary devaluation and government takeovers, is sure to break out eventually and accelerate the overall crisis. This will not be confined to the industrial sector but can take on vast international proportions.

Automation in large insurance companies and other so-called financial service organizations is eliminating thousands of what were once considered secure white-collar jobs. Even middle management people are being discharged wholesale in corporations like Ford and General Motors, while every merger leads to the elimination of hundreds of office as well as production workers.

The "feminization" of labor

For more than a century, women in increasing numbers have worked in industry in this country. Employers never objected in principle to hiring women when there were profits to be made off their labor. Even before World War I, women were employed in large numbers in such industries as textiles, where working conditions were abominable and wages barely above starvation level. It was in response to these conditions that in 1908 tens of thousands of women workers demonstrated in New York City on March 8, and this led the Socialist International two years later to proclaim that date as International Women's Day.

Protective legislation for workers was especially weak with regard to the sweatshops that employed women. Over 140 women textile workers, most of them very young, died in the Triangle Shirtwaist Company fire in 1911 because of the woefully inadequate safety codes regulating industrial buildings in New York and other manufacturing cities.

Not only women but children were cruelly exploited in those days (as they continue to be in agriculture up to this day). Wages were so low that whole families had to work long hours in the factories just to put food on the table. From 1916 to 1933, three different attempts were made in Congress to legislate an end to child labor, but all three were declared unconstitutional by the Supreme Court. It wasn't until after the tumultuous labor struggles of the 1930s that industry finally accepted the Fair Labor Standards Act of 1938, which set a minimum age of 16 for work in most industries.

The labor shortage created by World War II was what finally opened up the higher-paying industrial jobs to women. The war tremendously spurred the development of the capitalist economy, and for the first time such services as daycare centers were set up to facilitate more women being able to work full time. When the war ended, a major propaganda effort was made to get women to leave the factories and return to the home, yet in 1948 32.7% of women were in the labor force.

The further development of the processes of capitalist production has forced many more women out of the home and into the work force. It is these objective trends more than any subjective factors which have broken up the old family structure headed by the male bread winner. The pauperization of labor, which we have already discussed, has made it imperative that women work.

Much has been written about the "feminization" of labor, most of it bemoaning the demise of the "white male prototype." In 1983, for the first time, "white men, the prototype of the American worker since the beginning of the nation, no longer [made] up the majority of the country's work force."3 The chauvinist view is that women and Third World workers have taken away the jobs of white men. But this reactionary formulation of the question is also demonstrably false.

As a further report in the "Underbelly" series by Morehouse and Dembo shows, "While men have certainly been dropping out of the labor force, their relatively high paying jobs, mostly in manufacturing, have simply disappeared, not been taken by women. Instead women have flocked to low paying, often part-time jobs in the service sector, many below the poverty line or in the 'poverty zone.' "4

By early 1986, women made up nearly 44% of the civilian employed population. But the jobs available to them were generally so low paying that more and more women and their children were falling below the poverty line, in spite of the fact that more women were working than ever before.

Taking into account what they call the Jobless Rate, which factors in the effect of part-time and seasonal employment, Morehouse and Dembo conclude that "The increased participation of women in the work force, often because of increased overall Jobless Rates as well as quality and pay of jobs secured by women, has done nothing to alleviate the poverty of women and children, and in most cases has paralleled a worsening in their condition. Thus, the number of females below the poverty level has increased both in absolute numbers and as a percentage of women in the population, from 14.1 million (13.8% of all women) to 20.1 million (16.8%)." (See Table 4 in Appendix B.)

It is the objective processes of capitalist production, accelerated as we have seen by the great changes introduced by the scientific-technological revolution, that are responsible for this significant pauperization of the work force. Capitalist commentators, however, often persist in putting the cart before the horse and blaming women for lowering wages.

The trend described in the "Underbelly" report continues, as a column in the financial section of the New York Post in February 1986 confirmed.5 Entitled "Lower wages paid to women reduce real average earnings," it showed that real wages had been dropping ever since 1978, and that this was linked to the fact that more women had joined the work force than men.

"Between 1980 and December 1985," said the article, "the number of males in civilian employment rose from 57.2 million to 60.2 million--an increase of 5.2%. In contrast, total female employment rose from 42.1 million in 1980 to 48.0 million in December 1985, an increase of 14%, or about three times the proportionate rise in male employment."

Explaining that the new women's jobs were almost all in the lower-paying service sector, the article concluded that "the reason for the decline in average real hourly earnings as a whole may be the increased presence of females in the employment growth figures. This failure of real wages to remain constant may explain in part the failure of real economic growth in the U.S. in recent years. The rise in employment, about which the administration has congratulated itself, has not produced a proportionate rise in real GNP because so much of the employment increase has been in the form of female employment at substantially below average hourly earnings."

These figures can help one appreciate the tremendous significance of the struggle that women have launched for "comparable worth"--the concept that jobs which require a comparable level of skill, training and intensity should receive equal pay. When applied in areas like public service jobs, where secretaries and typists have always been paid much less than maintenance workers, for instance, it has meant a substantial raise in pay scales for women, that is, for those workers traditionally in the lowest-paid categories.

The struggle for comparable worth has broad implications for labor as a whole, since it is an effort to level wages upward by increasing the wages of the lowest-paid at a time when the whole thrust of the capitalist economy is to level wages downward.

Changing composition of capital

We want to demonstrate that the more or less constant growth in the reservoir of lower-paid workers is precisely the result of the loss of skilled jobs and growing unemployment as well. It's not possible to understand this problem, let alone adopt a correct trade union and working class strategy, unless one comes to grips with its economic origins.

The bourgeois press is full of the wonders of high technology and the introduction of robots in almost fully automated factories. But they neglect to mention an extremely important element in the economic laws of motion governing capitalist society: robots do not produce surplus value.

As Marx demonstrated long ago, machinery or constant capital is the result of past labor and past surplus value. Profit does not come from machinery itself. It is the labor of a worker, known in Marxist terms as variable capital, that produces surplus value, from which profit is derived. Workers produce a greater value than they receive back in wages, and it is the unpaid portion of their labor that produces surplus value. But a robot is not a worker. A robot is fixed or constant capital, which does not produce profit. Only unpaid human labor produces profit.

With fewer workers and more constant capital, the organic composition of capital changes, resulting in a falling rate of profit. This is an invariable law of the capitalist process of production. It cannot be gotten around.

The more dead or constant capital and the less human or variable capital used in production, the higher the organic composition of capital. This invariably leads to a decline in the rate of profit.

Despite this, the individual capitalists are driven to substitute labor-saving machinery for workers because it gives them a competitive advantage. For a certain period, the capitalist who is able to utilize the new technology and lower the unit cost of his product can actually enjoy a greater profit because the market reflects a generalized cost still based on the old technology. Eventually, however, the new technology itself becomes generalized and the rate of profit falls.

The advantage to a higher composition of constant capital is always temporary. Moreover, it spurs on destructive competition, in which much equipment that could still be socially useful is made prematurely obsolete.

In order to compensate for the falling rate of profit, the owners are forced to increase the volume of profit. This can only be done by further increasing production.

The world steel industry is probably the best example of how the decline in the rate of profit, which results from the changing organic composition of capital, leads to a glut of steel, contributing to another cyclical capitalist crisis.

The decline in the rate of profit leads to a flight of capital to where the rate of exploitation of the workers is higher. This does a lot to explain why the capitalist government is forever pushing a drive for exports in order to escape the diminishing rate of profit in the home market.

The Reagan administration, for example, has strenuously pushed the export drive while at the same time trying to put up high tariff walls, or ban imports, with a variety of weapons including monetary manipulation.

However, the point we want to make is that the modernization campaign here and in other capitalist countries amounts to an intensification of the exploitation of labor, with the introduction of higher and more sophisticated machinery until we reach the robot stage.

Much of the economic literature deals with the displacement of jobs as the result of the introduction of high technology, but it does not deal with the decline in the rate of profit from the long-range point of view. Technology is a double-edged weapon.

Furthermore, automation does not solve the problem of the capitalist contradiction that leads to economic crisis. On the contrary, it exacerbates it precisely because of the decline in the rate of profit.

High technology does not produce high profits. It increases the productivity of labor, but decreases the proportion of labor used in production in relation to the amount of fixed capital. Without labor no amount of high technology can produce surplus value, which is the unpaid portion of labor.

How can there be unpaid labor without laborers in the factories? Robots are dead labor. For the production of surplus value you need living labor.

While this may have little immediate significance from the point of view of profit, it has immense long-term significance.

Decline in trade union strength

The trade unions are the strongest, most formidable and fundamental organs of working class struggle and have a tremendous potential to lead the mass of workers in this country (more than 106 million as of 1985). According to the AFL-CIO study referred to in Chapter 1, "Unions represent over 20 million working men and women in the U.S. Organized labor remains a vital force for progress in this nation. . . ." The union movement has made tremendous strides in the struggle for higher wages and better conditions and has fought over the years for progressive labor and social legislation, notwithstanding the hostility of various U.S. administrations of both big business parties.

However, the report added that "union membership has shown a decline in absolute numbers as well as in percentage terms. The proportion of workers who are eligible to join a union and who in fact belong to a union has fallen from close to 45% to under 28% since 1954; using the measure of percentage of the entire workforce, the decline has been from 35% to under 19%."

Of course, the objective basis for this has been the ravages of two capitalist crises--one in 1974-75 and one which began in early 1979 and, with slight ephemeral upturns, continues to the present day. These crises have been accompanied by an anti-labor offensive which, as we said earlier, was in full swing even before the Reagan victory and became unmistakable with the breaking of the PATCO strike. Those are the objective factors.

However, there is also the subjective factor, the traditional labor relations policy, the collective bargaining approach which is summed up in the AFL-CIO report: "Organized labor believes that each worker is entitled to a fair day's pay for a fair day's work; that pay should include a share in the profits the worker helps to create, and thus unions seek a larger share of those profits than `market forces' might dictate."

This century-old, vague, ambiguous formula disregards the most basic and fundamental reality of labor relations: that the relations between the employer and the employee, the boss and the worker, have their foundation in the existence of irreconcilable class antagonisms. These antagonisms do not lend themselves to solution by such vague terms as fairness and justice when each class views morality and justice from a different perspective. These different and opposing conceptions are based upon the struggle over the paid and unpaid portions of labor.

This formula, furthermore, ties wages to the vicissitudes of the capitalist market with its ups and downs. The tremendous toll this takes in a capitalist recession is responsible for the long stream of concessions forced on the workers. In the wake of a capitalist crisis, the bosses have a free hand to fix wages to their sales, and to demand higher productivity, which can only reduce the workforce.

In its section dealing with advancing the interests of the workers, the AFL-CIO report suggested that workers "in some bargaining units may not desire to establish a comprehensive set of hard and fast terms and conditions of employment but may nonetheless desire a representative to negotiate minimum guarantees that will serve as a floor for individual bargaining, to provide advocacy for individuals, or to seek redress for particular difficulties as they arise. In other units a bargaining approach based on solving problems through arbitration or mediation rather than through ultimate recourse to economic weapons may be most effective." (Our emphasis.)

Of course, even the most militant and aggressive unions have had to resort to mediation and/or arbitration when the situation required it. But coupling this with individual bargaining foreshadows a weakening of collective bargaining, which instead must be strengthened.

As the report further showed, there are about two million workers in unionized plants who are not members of any unions. The weakening of the collective bargaining process as outlined in the above quote will do nothing to bring this large body of workers into the union fold.

There are recommendations in the AFL-CIO report which are helpful and attempt to improve the situation of the unions, but as we have mentioned above it does not go to the gut issues of the problems. Its view of the evolution of work totally ignores the reality of exploitation and the private ownership of the means of production by the bosses.

All the more conspicuous is the absence of any reference to the special exploitation of Black, Latino, Asian, Arab and Native workers, women, lesbians and gay men, disabled and undocumented workers. It is supposed that all are included in the generalizations made in the study, but unless these special oppressions are given special attention, it can only be seen as utter neglect.

A more detailed report on overall union membership, summarized in the New York Times6 showed the shift away from skilled jobs in concrete terms.

The United Steel Workers (USWA) "had 572,000 members as of June 30, about half as many as it had in the 1970s. Membership in the United Auto Workers (UAW) was down 35% to 974,000. The union had more than a million and a half members in the 1970s." The Rubber Workers declined by 33% to 106,000, the report said, down from 158,000 in the 1970s. The International Association of Machinists (IAM) had 520,000 members, a decline of 22% from as late as 1979, when it had 664,000 members, and a decline of 37% from 1969, its peak year with 850,000 members.

Membership in the ILGWU was down to 210,000, a 40% drop from 1977 when it stood at 350,000. Also the International Typographical Union (ITU) had fallen more than 50% in the previous 15 years from 89,000 in 1969 to 38,000 in the first six months of 1985.

By sharp contrast, however, "the Service Employees International Union (SEIU) has undergone a dramatic growth. The union, which had 505,000 members in 1977, had 688,000 members this year."

It is this highly significant shift from the higher paid to the lower paid which is dramatically changing the social composition of the working class, greatly increasing the importance of the so-called ethnic composition of the working class, that is, the number of Black, Latin, Asian, women and other oppressed groups, particularly the millions of undocumented workers. Inadequate attention is paid by the AFL-CIO to this multinational composition of the working class.

It is this aspect of the changing situation of the workers and their unions which has to be given great prominence as the most important significant phenomenon to have emerged from the development of the scientific-technological revolution. This profound change is not only unseating traditional labor relations but has made obsolete the prevailing conceptions and strategic approaches of the official labor leadership of the trade union movement.

Moreover, the bosses are trying to exploit the inertia in the officialdom, especially the top echelons, of the trade unions and take advantage of a lack of bold, truly progressive and militant innovation to put across their own formula for change, which is to deepen dependency and conformity to the will of the bosses and to insist on thoroughgoing cooperation with management.

Prospects for a classwide movement

Up until now when the word movement was used, it could mean either the Black movement, the Latino movement, the civil rights movement, the anti-war movement, the lesbian and gay movement or the women's movement. But the term seldom if ever referred to the working class movement. By and large the progressive movement as a whole was more or less separate from the working class.

Now, however, the change in the social composition of the working class lays the objective basis for a movement of the working class itself, of which these movements will become so many constituent parts.

When we speak of the women's movement or the anti-war movement or the Black movement as part of the working class movement, it doesn't mean they won't have an independent character. Of course they will. But they will be part of the working class movement because it will have come alive as the fundamental class in society which alone can weld these movements together in a genuine anti-capitalist and progressive struggle, a struggle both for democratic rights and for socialism.

The change of consciousness which has so long been delayed could not have come earlier merely as a result of episodic turns in the capitalist cycle. But it is bound to come as the result of deep-seated, profound changes in the social composition of the working class.

The bourgeoisie have initially viewed this trend as a favorable sign for class collaboration. But they will soon become disillusioned.


1. Marcy, Sam, "The Changed Character of the Working Class."

2. Morehouse, Special Report No. 5.

3. New York Times, July 31, 1984.

4. Morehouse, Special Report No. 4.

5. New York Post, Feb. 26, 1986.

6. New York Times, Oct. 5, 1985.

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