The following is a partial excerpt posted by Michelle Chen on FireDogLake.com on May 25, 2012 from a longer essay, What Labor Looks Like: From Wisconsin to Cairo, Youth Hold a Mirror to History of Workers’ Struggles, written for the new book, Labor Rising: The Past and Future of Working People in America (The New Press), edited by Daniel Katz and Richard A. Greenwald. Reprinted here with permission.
“Older progressive activists today stem from New Left movements that underwent a similar break with their antecedents. Many young radicals in the 1960s and 1970s repudiated the chauvinistic and parochial elements of their parents’ labor movement. In his blue-collar revisionist memoir, Striking Steel, Jack Metzgar, who grew up as the son of a steelworker before going on to teach college, interrogated the white unionist heritage that appeared shamefully regressive in the face of the escalating antiwar and civil rights movements. Radical youth, who later became educated liberals, saw in the old-school factory workers of his father’s generation an image of stiff-lipped industrial union men as ‘the principal perpetrators of racism, sexism and narrow-mindedness in American society. Who could remember that unions had once been more than a white male plot to keep blacks in their place? Who could remember that the Labor movement, as a social movement that made a difference, laid some of the ground work for the Civil Rights, community organizing, and women’s movements?’
“Fast forward to Madison, where tradition is entering a new day of reckoning: if the radical legacy of leftist unionism in the early twentieth century has waned, the public memory loss hasn’t just been on the part of youth. Labor itself has suffered from collective amnesia, forsaking militancy for the softer politics of Beltway lobbying, burrowing in the tradition of “business unionism” while burying faded embers of feminist, antiracist, or anti-capitalist critiques. But there’s a bolder, more vital strand of that tradition that must be rekindled in light of current struggles for social justice and human rights. So the protests in Wisconsin (and solidarity rallies in Ohio, New York, and many other communities) blew some of the dust off of labor’s “usable past” by showing young people how economic security dovetails with social justice and human rights.
“It’s at the intersection of these struggles that a college student graduates with a lifetime of debt. Or a young single mother has to drop out of high school to work at the local big box retailer—the only place hiring in her neighborhood. Or a twelve-year-old Mixtec girl aches with longing when she sees her friends leave every morning on the school bus while she goes back to work the fields with her parents, who don’t get paid until the season, and the semester, ends. Different voices harmonizing into one cry for justice, one that’s often silenced by a socially tone-deaf political system.”
The fallacy of this piece is rooted in one-factor economic thinking––labor workers––who will continue to be exponentially replaced or degraded by the ever continuing onslaught of the non-human factor of production––machines, superautomation, robotics, digital computerized operations, etc.
The labor union movement should transform to a producers’ ownership union movement and embrace and fight for new democratic capitalism––broadened private, individual ownership of productive capital assets of business corporations. 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 government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions. 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.”
Binary economist Louis 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 Kelso-designed 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 credit so that they can purchase the employer’s stock, pay for it in pre-tax dollars out of the assets that underlie that stock, and after the stock is paid for earn and collect the capital worker income from it, and accumulate it in a tax haven until they retire, whereby they continue to be capital workers receiving income from their capital 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 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 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 unproduced 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, never followed through.
