On October 2, 2019, Jerry White writes on WSWS:
The strike by 48,000 General Motors workers in the United States, now in its third week, is at a critical juncture. Although it has gone on longer than the company and investors expected, costing GM $1 billion in third quarter earnings, according to JP Morgan estimates, the auto company is being backed by Wall Street and has not flinched from its demands.
In recent days, the hedge fund managers and financial investors who hold the fate of GM in their hands have made it clear they want the strike defeated no matter what the short-term costs to the automaker.
In a report, “Wall Street patient as UAW strike against GM drags on, talks progress,” CNBC noted that “Investors aren’t all that worried because they see the strike as short-term pain that will pay off with lower long-term employee costs—even if it costs the automaker hundreds of millions, if not billions, of dollars in lost production.”
For the financial aristocracy the defeat of the strike is a strategic, not a short-term, question. In the face of growing signs of a global economic downturn and vast technological changes, Wall Street is seeking a broader restructuring of the global auto industry and a shift of capital towards electric and autonomous vehicles. Though not profitable yet, these technologies promise immense returns to investors from whatever global automaker dominates the market.
This will require, however, the destruction of whatever is left of the social rights of autoworkers. The auto industry must impose the conditions that prevail at tech giants like Tesla, Amazon and Google. Rather than having any expectation of long-term employment, annual raises, medical coverage and a pension after retirement, autoworkers will face the same hyper-exploitation as workers in the so-called Gig Economy.
The “Amazonization” of the global auto industry means future workers will be nothing but low-paid contract workers or “perma-temps” who can be hired and fired at will, depending on which way the economic winds blow.
Wall Street is gearing up for a fight that will have vast implications for the future of workers at Ford and Fiat Chrysler, in every auto and auto parts factory in the US and across the planet and for workers in every economic sector.
According to a former labor negotiator for Fiat Chrysler, Colin Lightbody, GM would save half a billion dollars in annual labor costs if it achieves its aims of increasing workers’ out-of-pocket contributions for health care from three percent to 15 percent and dramatically increases the number of low-paid temporary workers.
“If GM prevails on those increases, that sort of settlement could save GM $5 an hour in labor costs, translating into some $500 million a year—enough to possibly make up for profits lost in the first two weeks of the strike,” the Detroit Free Press wrote. “That’s a lot of money and that’s why GM is willing to hold out,” Lightbody told the newspaper.
In the face of this historic attack, the United Auto Workers does not have a strategy for victory but for defeat. Rather than mobilizing workers at all the Big Three automakers, the UAW has forced the 100,000-plus workers at Ford and Fiat Chrysler to continue working, even though they will face the same concession demands or worse if the GM strike is defeated.
Instead of giving striking workers the resources they need for a long fight against the deep-pocketed company, the UAW is only giving workers $250 a week from its $800 million strike fund, even as UAW President Gary Jones collects his full salary of $5,004 a week.
As one 30-year veteran at GM’s Fort Wayne, Indiana, plant said, “They have us set up to fail. Ford and Chrysler should be out with us. They’re trying to starve us out, so they can impose whatever GM wants.”
The UAW has also kept workers completely in the dark about the ongoing “negotiations” with the automakers. After a torrent of protests from angry workers, UAW-GM Vice President Terry Dittes released a statement Tuesday claiming that the UAW had rejected a GM proposal “that did not satisfy your contract demands or needs.” The offer “came up short” on some issues, “like health care, wages, temporary employees, skilled trades and job security to name a few.”
Dittes claimed the UAW had submitted a counter-proposal, but he did not provide a single detail about its supposed demands to the company.
The whole charade is a fraud from beginning to end. The UAW has no counteroffer because it agrees with slashing health care costs and expanding the number of temporary workers in the electric vehicle plants, who will still be forced to pay UAW dues.
The UAW has spent years laying the groundwork to impose precisely these demands. If it hasn’t brought these demands back to workers, it is only because the corrupt company agents in the UAW know that workers would reject it and revolt against the whole rotten UAW apparatus.
The only way GM workers can prevent the defeat of the strike is by taking matters into their own hands and radically changing the course of this decisive battle. This means building new organizations of struggle, rank-and-file strike and factory committees, which will operate independently of the UAW and bring all the resources—human and material—to bear in this fight.
Rank-and-file committees should call on Ford and Fiat Chrysler workers to break the isolation of the GM strike and launch a national strike to shut down the auto and auto parts industry. At the same time, they should demand the tripling of strike pay to $750 a week.
In opposition to the economic nationalism and anti-Mexican and anti-Chinese chauvinism promoted by the UAW, Trump and the Democratic presidential candidates, these committees will fight to unite autoworkers in the US with their class brothers and sisters in Canada, Mexico, Korea and other countries who are also in a fight against GM and the other global automakers.
The common conditions facing autoworkers around the world were seen Tuesday, when Fiat Chrysler workers walked out of a plant in Cassino, Italy, after one of their fellow workers was crushed to death.
This strike is not just against GM, it is against the entire ruling class, which has waged a decades-long war against workers in order to accumulate unfathomable levels of personal wealth. It is part of the broader resurgence of the class struggle in the US and around the world, which has included mass strikes by teachers in the US and other countries, including 200,000 educators in Sri Lanka, the wildcat strikes by Mexican maquiladora sweatshop workers and mass protests in France and Puerto Rico.
Workers must challenge the entire rotten political establishment. Workers have no dogs in the fight in Washington between Trump and the Democratic Party. Nothing will improve, no matter how the ruling class sorts out its internal divisions. The Democratic Party has explicitly restricted its impeachment inquiry to its differences with Trump over foreign policy and military action. It is doing everything it can to prevent workers and young people from expressing their opposition to social inequality and the descent into dictatorship, which is backed by both corporate controlled parties.
But that is precisely what is needed. Autoworkers should reach out to teachers, health care workers, Amazon and other logistics workers, and all sections of workers and young people to turn this industrial struggle into a powerful political struggle against capitalist exploitation.
To answer the global strategy of the giant corporations and Wall Street, workers need their own international and socialist strategy aimed at reorganizing the global auto industry and the entire world economy based on production for human need, not private profit.
Gary Reber Comments:
As the article’s author points out, “Investors aren’t all that worried because they see the strike as short-term pain that will pay off with lower long-term employee costs—even if it costs the automaker hundreds of millions, if not billions, of dollars in lost production.”
This article accurately depicts the tremendous challenges the labor movement and their union representatives face, as increasingly Americans, who are solely dependent on their labor worker wages to live, are up against the controlling “greedy” wealthy capital ownership class who they are essentially slaves to. Sadly, the present reality is the vast majority of Americans have become dependent on producer corporations that are narrowly owned for jobs as their ONLY means to earn an income.
The author writes, “This will require, however, the destruction of whatever is left of the social rights of autoworkers. The auto industry must impose the conditions that prevail at tech giants like Tesla, Amazon and Google. Rather than having any expectation of long-term employment, annual raises, medical coverage and a pension after retirement, autoworkers will face the same hyper-exploitation as workers in the so-called Gig Economy.
“The ‘Amazonization’ of the global auto industry means future workers will be nothing but low-paid contract workers or ‘perma-temps’ who can be hired and fired at will, depending on which way the economic winds blow.”
The fight to unify the working class in the United States and elsewhere should be a fight to gain ownership stakes in the corporations who employ them. Yet, the fight is always the same –– “pay us more wages.”
Americans need to understand the anger and developing turmoil as it relates to job losses and the devaluation of labor value amongst auto workers and all other workers who feel taken advantage of by the owners of businesses who rely on both labor and the non-human factor –– productive capital “automated” and “machine” assets –– to produce goods, products, and services. Increasingly, and at a rapid rate, workers are being dismissed as tectonic shifts in the technologies of product replace them and devalue labor’s worth.
This reality has been shaping since the Industrial Revolution. Over the past century there has been an ever-accelerating shift to productive capital — which reflects tectonic shifts in the technologies of production. The mixture of labor “worker” input and physical capital “worker” input has been rapidly changing at an exponential rate of increase for over 240 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advances amplified the productive power of non-human capital, as it has to this day, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels. While historically, the expansion of productive technology had created jobs, today the trend is that the new jobs being created are increasingly being filled by a “machine” at inception, while the jobs remaining still rest in the crosshairs of technological development and application.
Practically all of our manufacturing corporations have chosen to outsource their parts and finished product manufacturing, to varying degrees, to slave wage labor and non-regulated countries. As a consequence, American corporations have become (and increasingly are becoming) no longer dependent on American workers or consumers as they seek lower production costs and expanded consumer markets in other countries. Currently, any time corporations feel their operations are “threatened” vis-à-vis less profitability, they shut down factories and jobs in our homeland, and move their manufacturing out of the United States, investing in the development of slave wage labor countries and creating jobs there, sharing American technological innovations and inventions that enable efficient production.
Such overseas operations have the advantage of “sweat-shop” slave labor rates relative to American standards, low or no taxation, State subsidies, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations — which translate to lower-cost production. Thus, producing the same product or service in the United States would be more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers.
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.
Everyone in union negotiating positions should be advocating for a union movement transformation 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.
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. See https://www.cesj.org/…/employee-stock-ownership-plans-esops/.
We live in a world driven through the one-factor lens of workers and demands for more pay for the same work input (or less) as automation and “machine” inputs continue to out-produce labor’s input. Yet there is never a focus on the necessity for workers to gain ownership stakes in the non-human productive capital assets that are replacing them in the production of good, products, and services. Instead, it is the same old fight for more wages and benefits, which is an added cost to production, and a fight against automation and “machines” that replace workers. These “old” ways will no longer work in the advancing age of all-encompassing non-human “automation” of the means of production.
We must recognize that human life, dignity, and liberty require that each person has the power and independent means to support and sustain one’s own life, dignity, and liberty –– i.e. through one’s own private property rights (personal or shared control) and rights to the full fruits or “profits” in what one owns. Thus, we, as a society need to aim to structurally diffuse economic power by democratizing access to capital ownership for each person.
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. In other words, keep the working class in the servitude to the wealthy capital ownership class. 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.”
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.
Everyone in union negotiating positions should be advocating for a union movement transformation 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.
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.
The cause and effect of wage slavery is rooted in the Keynesian paradigm. Economist John Maynard Keynes, whose Keynesian model is widely taught, falsely presumed that the only way to balance mass productive power with mass purchasing power is through a wage system — ignoring the possibility of democratizing future ownership of labor-displacing productive capital technologies and rising ownership incomes as a market-generated means of eliminating wage slavery, welfare slavery, debt slavery and charity slavery for the 99 percent of humanity. Binary economist (human and non-human productive inputs), corporate tax attorney, investment banker and author Louis O. Kelso argued that the Keynesian model fails to recognize that “when capital workers [owners] replace labor workers as the major suppliers of goods and services, labor employment alone becomes inadequate because labor’s share of the income arising from production cannot provide the progressively better standard of living that technology is making possible. Labor produces subsistence at best. Capital can produce affluence. To enjoy affluence, all households must engage to an increasing extent in capital work.”
It is imperative that leaders seeking new solutions cease the opportunity presented in presidential and congressional elections to implement effective programs for expanded ownership of productive capital, and address the problem of education on this subject.
At one point in 1976, the discussion led to The Joint Economic Committee of Congress endorsing a policy to broaden capital ownership as an economic goal for America. The 1976 Joint Economic Report stated: “To provide a realistic opportunity for more U.S. citizens to become owners of capital, and to provide an expanded source of equity financing for corporations, it should be made national policy to pursue the goal of broadened capital ownership. Congress also should request from the Administration a quadrennial report on the ownership of wealth in this country, which would assist in evaluating how successfully the base of wealth was being broadened over time.”
Unfortunately the Congress and no past or present President have never paid any attention to this policy, and the goal has subsequently been unacknowledged and unheeded by our plutocratic political leaders.
Instead, the American people have been promised that if the wealthy ownership class could gain even more earnings through low taxes and deregulation, the savings would be reinvested to grow the economy and create more and better jobs and higher wages. The focus has always been on job creation and wage growth, while the rich get richer by invisibly accumulating more capital asset ownership.Of course, there is always some truth to the idea that new jobs will be created through reinvestment, but jobs are eliminated as well, as the reinvestment is increasingly directed to the formation of new, highly-efficient non-human technological means of production, requiring far less workers and/or to extensions to other countries with lower labor costs and no or few regulations.
Americans should be smarter and realize that this is an underhanded scheme for the already wealthy and their heirs to OWN America and further concentrate and monopolize ownership of ALL productive capital, present and future. Such “trickle-down” thinking does not work. As a result of such unworkable policies, fewer and fewer people remain good “customers with money” to buy what the economy is capable of producing. And even then, as consumers, the vast majority of Americans have gone into consumption debt in order to provide for themselves and their families. Americans increasingly do not feel secure and are being challenged as to how to survive, faced with mounting over-extended consumer credit as well as less and less job security to earn sufficient income to pay off their debt. Unnecessarily, millions of Americans are faced with losing their savings and homes, and their jobs –– and their dreams for a better life –– with no way to earn through owning the wealth-creating, income-producing productive capital now formed and that which will be formed in the future.
As history has confirmed, better earnings and better job prospects did not and will not trickle down by lowering taxes on the wealthy and the corporations they own or deregulating the rules of responsible production. Responsibly growing the economy simultaneously with creating new capital owners, and thus “customers with money,” is the ONLY way to achieve inclusive prosperity and economic justice.
On the basic issue of economic empowerment of each individual, the essential goal needs to be economic democracy, which will finally make political democracy a meaningful reality.
The emphasis on the systemic injustices of monopoly capitalism can only be addressed by comprehensive reforms to the tax, monetary and inheritance policies favoring the top 1 percent at the expense of the 99 percent. The current system perpetuates budget deficits and unsustainable government debt, underutilized workers, a lack of financing for financing advanced energy and green technologies, and outsourcing of U.S. industrial jobs to slave-wage labor countries, trade deficits, shrinking consumption incomes among the poor and middle class, and conventional methods for financing productive growth (with past savings requirements) that increase the ownership and power gaps between the top 1 percent and the 90 percent whose combined ownership accumulations are already less than the elite whose money power is widely known as the source of political corruption and the breakdown of political democracy.
The question that requires an answer is now timely before us. It was first posed by Kelso in the 1950s but has never been thoroughly discussed on the national stage. Nor has there been the proper education of our citizenry that addresses what economic justice is and what capital ownership is. Therefore, by ignoring such issues of economic justice and capital ownership, our leaders are ignoring the concentration of power through concentrated ownership of productive capital, with the result of denying the 99 percent equal opportunity to become capital owners.
The question, as posed by Kelso is: “how are all individuals to be adequately productive when a tiny minority (capital owners) produce a major share and the vast majority (labor workers), a minor share of total goods and services,” and thus, “how do we get from a world in which the most productive factor — physical capital — is owned by a handful of people, to a world where the same factor is owned by a majority — and ultimately 100 percent — of the consumers, while respecting all the constitutional rights of present capital owners?”
For an in-depth overview of solutions to economic inequality, see my article “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://www.foreconomicjustice.org/?p=11.
For even more in-depth reading about solution to bring about a new economic paradigm:
Support the Agenda of The JUST Third WAY Movement (also known as “Economic Personalism”) at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/ and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
