America needs to rebuild worker power in politics. Photograph: Jacquelyn Martin/AP
On August 15, 2019, Jerry White writes on wows.org:
A battle is looming. At midnight on September 14, one month from now, the four-year labor agreements covering 155,000 General Motors, Ford and Fiat Chrysler workers in the United States will expire.
Autoworkers are determined to fight. They have endured decades of falling wages and attacks on benefits, which escalated following the 2008 crisis and the restructuring of the auto industry under Obama. The assault on workers has produced record profits for the auto companies and Wall Street investors.
The auto companies are determined to make US autoworkers bear the brunt of a new restructuring of the global auto industry that has already eliminated tens of thousands of jobs around the world. Amid growing signs of recession, the companies are intensifying their attacks on jobs, wages and working conditions. They are out to reduce workers to the status of contingent laborers totally at the mercy of the employers.
They have no intention of bowing to the demands of the workers. Instead, they intend to use the downturn to blackmail workers into accepting even more brutal concessions. GM reportedly wants temporary workers to make up half of its US factory workforce, while Ford wants to gut supposed “gold-plated” health benefits and end what Forbes calls the “last vestige of the quasi-socialism that dominated the US auto industry for 100 years.”
The conflict, however, is not between the companies and the United Auto Workers. That pro-company organization is mired in a corruption scandal that has sent top officials to jail for taking bribes from Chrysler to push through the sellout contract in 2015.
The battle is between autoworkers in the US and internationally on the one side and the transnational corporations and their corporatist “trade unions” on the other.
The so-called negotiations are a scam. As far as the UAW and the companies are concerned, the contracts have already been settled. The official talks are a front for a conspiracy to force the workers to accept what the companies and the unions have already agreed to.
On Wednesday, the Detroit Free Press reported that the UAW will likely pick Ford as the “target company” in the negotiations. “Target company,” like so many other terms, is a misnomer. It is not the company that is being “targeted,” but the workers. An agreement with Ford, with which the UAW has had the closest ties of any of the US-based automakers, will be used to target workers at GM and Fiat Chrysler.
Autoworkers want to fight, but the issue is: On what strategy will the struggle be based?
First, workers must seize the initiative by forming rank-and-file committees, independent of the UAW. Autoworkers know that the UAW is a cheap labor contractor and police force for the bosses. The corruption scandal is not, as the union claims, a case of a few “rotten apples.” Rotten apples are produced by a rotten tree, and the UAW is rotten to the core.
Following the sentencing of former UAW-Chrysler Vice President Norwood Jewell, federal prosecutors have charged former UAW official Mike Grimes, longtime top aide to UAW Vice President Cindy Estrada. According to the Detroit News, Grimes accepted $1.99 million in kickbacks from vendors paid by the UAW-GM Human Resource Center. Prosecutors have also charged unnamed “Union Official 1” with demanding a $250,000 kickback.
Rank-and-file factory committees of autoworkers in every workplace should formulate their own demands—including a 40 percent pay increase, the abolition of the multi-tier pay and benefit system, the conversion of all temporary and contract workers to full-time positions with full pay and benefits, and the rehiring of all laid-off workers.
Preparations must be made for a national strike of all autoworkers and parts workers, whether they are “represented” by the UAW or not. Workers must be on guard against the union calling an isolated strike to let off steam, wear them down and force through concessions.
Second, workers require an international strategy and organization. The bankruptcy of the UAW is not simply due to the personal corruption of union executives, of which there is plenty. It is rooted in the bankrupt program of economic nationalism on which the UAW and all the unions around the world are based.
The Detroit-based automakers are no longer the “Big Three” industrial icons of American capitalism. GM, Ford and Fiat Chrysler have been integrated into a complex global organization involving alliances with other transnational corporations. The financial markets are pressing for a new wave of mega-mergers, including VW-Ford and Fiat Chrysler-Renault.
They want to lower labor costs to position themselves for the ferocious struggle to master the new electric, autonomous and ride-sharing technologies and gain control of the new markets opening up.
In the last nine months alone, the global automakers have carried out a jobs massacre, eliminating nearly half a million workers in China and India. They see the transition to electric motors, which require fewer man-hours to produce than internal combustion engines, as an opportunity to slash the jobs of 100,000 powertrain workers in the US and Germany alone, and shift more production to low-cost contractors.
The automakers have an international strategy. Autoworkers need an international strategy of their own.
The global auto industry employs between eight and nine million assembly and auto parts workers, not to mention the millions more who extract and process the raw materials and design, engineer, sell and service the vehicles. There is no such thing as an “American car,” any more than a “Chinese” one. Vehicles are the product of a global division of labor in a global car industry. If the industry were a separate economy, it would be the sixth largest in the world.
Serious struggles today must be internationally coordinated. The international character of the struggle has already been seen in the recent wave of auto strikes, including in Romania, the Czech Republic, Turkey, India, Brazil, South Korea, Canada and Mexico. In Mexico, striking maquiladorasweatshop workers marched to the US border to call on their American sisters and brothers to join their fight.
The massive fall in stock prices on Wednesday was a response to the signs of economic crisis combined with terror within the ruling class over the eruption of social protests internationally, most recently in Hong Kong and Puerto Rico.
A fight against the assault on autoworkers requires a rejection of the nationalist poison peddled by the unions, President Trump and the Democrats to divide the working class. The strength of the working class lies in its international unity.
Third, in this struggle workers are confronting the entire capitalist profit system, which impoverishes masses of people around the world in order to enrich the corporate and financial oligarchy. Autoworkers should ask themselves: Why is it that the introduction of new technologies—including robotics, artificial intelligence and global telecommunications—results not in an increase in their living standards, but in their further impoverishment?
The answer lies in the nature of the capitalist system, which is based on the accumulation of private profit, not the satisfaction of human needs. The global auto industry must be transformed into a public utility, collectively owned and democratically controlled by the working class.
Whatever their differences, the Democrats and Republicans in the US, and their counterparts internationally, are absolutely united on one fundamental principle: defense of the capitalist system. Their response to the crisis of capitalism is the further impoverishment of the working class along with war and dictatorship. The working class must respond with its own strategy—that of socialist revolution.
A battle is looming, and autoworkers have powerful allies—the millions of autoworkers and the billions of workers throughout the world who have begun to fight back. The urgent task is the development of the organizations and political strategy to carry out this fight.
Gary Reber Comments:
Workers have a hard fight ahead to turn around the situation wherein workers are slaves to wages, with no bargaining power or political power. Today, for most sectors of the economy, workers are stuck in the wage system.
The effect of workers demanding wage hikes for the same work creates an endless cycle of inflation. Of course, workers want as much income paid to them that they can get to increase their purchasing power. All Americans want to increase their purchasing power. But is that achievable through the wage system?
Corporations and business do not pay expenses, they merely roll them into their prices to cover them. Once that has been done, increased prices consume the increased wages and consumers that were impacted are right back in the same economic position.
There are ONLY five ways to deal with wage increases: 1) raises prices on the products and services offered by the employer/OWNER(s) of the business impacted, which are passed onto the business’ customers, 2) further reduce non-human marginal costs of producing such as the cost of materials, etc. 3) save labor by reducing the number of people employed or employ part time labor to avoid paying benefit costs, 4) replace human workers with non-human workers such as machines, robotics, computerization, etc. and 5) reduce profitability of the business.
Paying people less than the market wage rate is unjust. That’s obvious. It’s practically the definition of injustice, to pay people less than the market rate, or to withhold pay. Stop and think about it. An employer is buying someone’s labor. If labor is worth X per day at the market rate, but an employer is forced to pay X+ per day, isn’t the employer being cheated? People tend to want to do things in the most efficient way possible, and get as much as possible for the least amount of effort or cost.
Doing more with less comes naturally if you work for yourself, or you own whatever is doing the work, e.g., productive capital. You want as much as you can get for as little cost or effort as possible. No one is harmed, because you bear the cost, whether high or low. You benefit, because you pay.
The wage system distorts this natural tendency, a virtue, into something vicious, that is, a vice. A worker who has only his or her labor to sell is going to want as much as he or she possibly can get for it. Naturally, he or she are also going to want to give as little as he or she can get away with. This has been the tradition role of organized labor to accomplish both ends.
If he or she was the only one involved, there would be no problem. Unfortunately, there is the person who is buying the labor, and the people who are buying the good or service that the labor, in part, is being used to produce. If the worker has power, the employer pays more. If the worker does not have power, the employer will pay less. Wages will be just only in the rare instance in which the propertied employer and propertyless worker have equal power.
The only way out is to give workers a stake in keeping costs low so that the natural tendency to do more with less works in favor of everybody, not against them. An aggressive program of expanded capital ownership, such as proposed in the Capital Homestead Act, is therefore not only consistent with nature, it is in everybody’s best interest, morally and economically.
This is why workers and all other citizens, working or not, need to become owners of wealth-creating, income-producing capital assets.
The labor union movement needs to transform to a producers’ ownership union movement and embrace and fight for economic democracy. They should play the part that they have always aspired to — that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline.
Unfortunately, at the present time the movement is built on one-factor economics — the labor worker. The insufficiency of labor worker earnings to purchase increasingly capital-produced products and services gave rise to labor laws and labor unions designed to coerce higher and higher prices for the same or reduced labor input. With past government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions. Binary economist and author, Louis O. Kelso stated: “The myth of the ‘rising productivity’ of labor is used to conceal the increasing productiveness of capital and the decreasing productiveness of labor, and to disguise income redistribution by making it seem morally acceptable.”
Historically and in its present form, the labor movement is destructive in that it agrees with the idea that propertyless people should exist to serve those who own property. The labor movement doesn’t seek to end wage slavery; it merely seeks to improve the condition of the wage slave. If it actually cared about human rights and freedom, it wouldn’t call itself the “labor movement.”
Kelso argued that unions “must adopt a sound strategy that conforms to the economic facts of life. If under free-market conditions, 90 percent of the goods and services are produced by capital input, then 90 percent of the earnings of working people must flow to them as wages of their capital and the remainder as wages of their labor work… If there are in reality two ways for people to participate in production and earn income, then tomorrow’s producers’ union must take cognizance of both… The question is only whether the labor union will help lead this movement or, refusing to learn, to change, and to innovate, become irrelevant.”
Unions are the only group of people in the whole world who can demand a real, justice managed equal allocation Employee Stock Ownership Plan (ESOP), who can demand the right to participate in the expansion of their employer by asserting their constitutional preferential rights to become capital owners, be productive, and succeed. The ESOP can give employees access to capital credit so that they can purchase the employer’s stock, pay for it in pre-tax dollars out of the earnings generated by the new assets that underlie that stock, and after the stock is paid for earn and collect the capital earnings income from it, and accumulate it in a tax haven until they retire, whereby they continue to be productive capital earners receiving income from their capital asset ownership stakes. This is a viable route to individual self-sufficiency needing significantly less or no government redistributive assistance.
The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today — wages, hours, and working conditions — and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.
If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it through owning “tools” as inputs to production or their labor and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that goods, products, and services are actually produced.
When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
Kelso stated, “Working conditions for the labor force have, of course, improved over the years. But the economic quality of life for the majority of Americans has trailed far behind the technical capabilities of the economy to produce creature comforts, and even further behind the desires of consumers to live economically better lives. The missing link is that most of those un-produced goods and services can be produced only through capital, and the people who need them have no opportunity to earn income from capital ownership.”
Walter Reuther, President of the United Auto Workers, expressed his open-mindedness to the goal of democratic worker ownership in his 1967 testimony to the Joint Economic Committee of Congress as a strategy for saving manufacturing jobs in America from being outcompeted by Japan and eventual outsourcing to other Asian countries with far lower wage costs: “Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth, which is today appallingly undemocratic and unhealthy.
“If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing [through wider share ownership] cannot be said to have any inflationary impact on costs and prices.”
Unfortunately for democratic unionism, the United Auto Workers, American manufacturing workers, and American citizens generally, Reuther was killed in an airplane crash in 1970 before his idea was implemented. Leonard Woodcock, his successor, nor any subsequent union leader never followed through.
The union movement should also expand beyond representing corporate employees and represent capital ownership empowerment for all propertyless citizens.
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
Support the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/
