Excerpt from Conference Document

Labor and the U.S. Economy

The following is an excerpt from the document adopted by the 14th National Conference of the SL/U.S. in December 2015. It has been edited for publication.

Changes in Manufacturing

In the fall of 2014, the United Auto Workers (UAW) bureaucracy held a heavily orchestrated one-day strike at the Lear parts plant in Hammond, Indiana, designed to let workers blow off steam, and claimed it was a victory because it supposedly got rid of the two-tier wage system. In fact, the lower-tier workers were recategorized, moved to another plant and had their wages cut. This sellout was a continuation of the UAW bureaucrats’ class-collaborationist “partnership” with the Big Three and another step on the road to ruin.

The recent Big Three contract negotiation was the first time since 2007 that the UAW bureaucracy has had to contend with strike sentiment, given that it had agreed to a six-year strike moratorium in the Obama-engineered bailout of the industry. The workforce at the Big Three expressed strong opposition to the tier system and the proposed contracts negotiated by the UAW bureaucracy, which the union tops eventually pushed through. Contrary to their promises, the UAW leadership maintained and reinforced tiers in the industry. Our sales to this industry intersected quite a bit of anger within this workforce.

Already, the UAW bureaucracy has encouraged so-called insourcing, i.e., enticing the domestic automakers to bring jobs previously contracted out to third-party companies back under the Big Three umbrella by offering wages even lower than the second-tier wages. Here is the entire strategy of the UAW bureaucracy to fight outsourcing: acting despicably as labor brokers and pushing “buy American” protectionism coupled with anti-Communist China-bashing. This protectionist poison, which scapegoats foreign workers, helped spur the growth of the non-union auto industry. To avoid trade restrictions, Japanese and later German and South Korean automakers set up shop in the U.S. In turn, the UAW leadership agreed to concession after concession at the Big Three so that the American auto bosses could “stay competitive” with the foreign-owned factories.

The leveling of labor costs in the U.S., and the doubling of wages in China since 2008, combined with the wide availability of cheap land, energy and raw materials as well as ready access to the American market, has changed the calculus on where goods are manufactured. Numerous Chinese-owned textile plants have recently sprung up in the Carolinas, both a testament to the lower yarn production costs in the U.S. and a pre-emptive measure to minimize the impact of the TPP trade pact. Meanwhile, American industrial giants have returned some production to this country. Overall, the U.S. is both the world’s largest direct investor abroad (roughly $400 billion in 2013) and the largest recipient of direct investment ($150 billion), spending from one country into another that involves establishing operations or acquiring tangible assets.

Deindustrialization of large parts of the U.S. disproportionately affected the unionized working class and the black population in particular. But we also must keep in mind that the U.S. retains a manufacturing core. The U.S. share of global manufacturing output in value added remains about 20 percent (down from approximately 60 percent in 1950), underlining that this country’s industrial proletariat is still strategic. The face of U.S. manufacturing has changed substantially over the last half century, and we need to strive to better understand it in order to intersect those workers and address the issues they confront more effectively in our propaganda.

In the place of large factories have arisen many smaller, capital-intensive facilities, often in far-flung locations. The history of Ford River Rouge outside Detroit is illustrative. The original massive complex (with its own steel mill, glassworks, electricity plant and internal railroad) could turn raw materials into running vehicles. As many as 100,000 workers were employed there in the 1930s and over 30,000 in the 1970s before the company decentralized its operations, spinning off the steelmaking, contracting out parts production to suppliers, etc. Today, the Rouge site is a model of “lean production” and highly automated manufacturing. The Ford Rouge Center, the automaker’s largest industrial complex with roughly 6,000 employees, is supplied by hundreds of parts manufacturers. Technological improvements, coupled with “flexible” hours and speedup, have translated into large increases in labor productivity as the total workforce shrinks.

Although the manufacturing workforce has been sliced and scattered, furthering the atomization of the workers and negatively impacting class consciousness, it retains tremendous social power in core industries. In the case of auto, “just in time” production, a growing emphasis on speed to market and the extensive network of parts manufacturers supplying each assembly plant comprise an arrangement with a lot of potential vulnerabilities. For example, at the Ford Rouge Center, no more than two hours of parts are stacked along assembly lines, and just 12 hours of inventory are on site. One strike by a small group of workers would shut down the whole operation, as happened in the then-GM Delphi parts plant in 1998. Thus, maintaining class peace and enforcing strict labor discipline are essential for the automakers, which receive invaluable assistance on that score from the rotten UAW leadership.

Particularly in manufacturing, the rise in temporary workers is a significant shift from what we saw even 15 years ago. Temporary employment offers poverty wages and no benefits and creates a more vulnerable workforce, insulating companies from workers’ compensation claims, new health care taxes and unionization drives. In many assembly plants, an estimated 10 percent to 30 percent of the workers are temporary. Temporary workers make less than permanent hires and part of their wages goes into the pocket of the temp agencies.

The “Southernization” of Labor

The American labor movement is paying the price to this day for the failure to organize the South. For example, Boeing moved to the South in response to a string of IAM machinists union strikes at its Washington State facilities. This move was reminiscent of the textile industry, the iconic (and then largely white) Southern industry that started as “runaway shops” set up by Northern textile barons in search of a cheaper and more pliable workforce. Buckling under to predictable blowback from the company, the IAM postponed a recognition vote early in 2015 at the Boeing facility in North Charleston, South Carolina. Furthermore, low-wage production in the South has driven down the wages of workers more broadly—the wage and benefit gap between Midwestern and Southern workers narrowed from $7 in 2008 to $3.34 by the end of 2011. This “southernization” of American labor is testament to the race to the bottom fueled by the betrayals of the union bureaucrats. “Right to work” laws, passed to prevent the rise of integrated unions in the South, have taken firm root in former bastions of industrial unionism in the Midwest, including Indiana, Michigan and Wisconsin.

A massive organizing drive in the South is vitally necessary. The last major attempt, the CIO’s 1946-53 “Operation Dixie,” added 800 locals and 400,000 members in its first 18 months. These gains soon evaporated, since the organizing drive was predicated on not antagonizing the Southern business elite and ruling Dixiecrats; the CIO maintained silence on matters of racial oppression and excluded black organizers and reds. The Communist Party, despite joining Roosevelt’s New Deal coalition and helping stave off the independent political organization of the working class, had in various Southern locales successfully recruited black and white workers together to the unions, in defiance of segregation laws and the pervasive threat of Klan terror. Even as their own unionization campaign foundered, the anti-Communists atop the CIO worked to destroy these integrated union locals, like that at R.J. Reynolds in Winston-Salem, North Carolina.

The South—a bastion of anti-black and all-sided reaction in U.S. society and long home to the bulk of the officer corps—is crucial to the American workers revolution, which will finish the Civil War. A majority of the black population since 2000 once again lives in the South. Manufacturing job losses have been a significant factor pushing black people to migrate back. Notably, most of the states that were the biggest Great Migration destinations—New York, Illinois, Michigan and California—are now among the greatest contributors to the new Southern migration gains.

Our distance from the South and the auto industry made addressing the UAW bureaucracy’s class collaboration at VW’s Chattanooga, Tennessee, plant more difficult. While anti-union propaganda has compared the UAW to the invading Union Army, the union bureaucracy has openly renounced the “adversarial unionism” of the 20th century and embraced partnership with the bosses through so-called “co-determination.” Union authorization cards read: “We, the employees of Volkswagen, are joining together to create the most successful Volkswagen Chattanooga facility possible.... We choose to be represented by the UAW because, by working together, we can make the Passat the #1 car in the United States.”

Central to their self-defeating organizing effort at Chattanooga, the UAW bureaucrats signed a “neutrality agreement” that ceded jurisdiction over various shopfloor issues to a joint labor-management “works council,” which would also oversee at least the first stage of the grievance process. This undercuts the union, whose purpose is supposed to be to defend workers against the company. The UAW’s “neutrality agreement” at Chattanooga was nothing new. The union bureaucracy has long sought to add members to its rolls by negotiating such agreements with employers. In exchange for claiming it will not interfere in union organizing, management insists on a sweetheart deal committing the union to concessions even before a single member is organized.

After the UAW lost its recognition vote at Chattanooga last year, VW instituted guidelines for meeting with sanctioned employee groups. Both the UAW and a company union now regularly sit down with the company. This scheme is based on the concept of “minority unionism,” where a union represents those employees who sign up, whether or not they have majority support, thus writing off the union as an exclusive bargaining agent for a given plant. Having rejected a class-struggle perspective, union officialdom and social democrats champion this model as a way to get around existing restrictive anti-labor legislation.

Today, the “strategic shift” of the AFL-CIO away from building unions, including proposals that workers join its “Working America” organization as individuals, is another symptom of how the union tops have abandoned class struggle. Leon Trotsky’s observations in the article “The Trade Unions in Britain” (September 1933) apply with full force to the U.S. today:

“Capitalism can continue to maintain itself only by lowering the standard of living of the working class. Under these conditions trade unions can either transform themselves into revolutionary organisations or become lieutenants of capital in the intensified exploitation of the workers. The trade union bureaucracy, which has satisfactorily solved its own social problem, took the second path. It turned all the accumulated authority of the trade unions against the socialist revolution and even against any attempts of the workers to resist the attacks of capital and reaction.”