soc. scholars talk

Michael Yates mikey+ at
Tue Apr 4 12:31:39 PDT 2000

I have attached remarks I made at the recent socialist scholars conference. I was on a panel sponsored by Monthly Review titled "Is the US Bubble going to Burst?" Doug Henwood gave a fine presentation of the economic situation, givng us both pessimistic and optimistic scenarios. We are clearly in uncharted territory in financial markets, as Doug made clear for us. John Bellamy Foster gave an interesting discussion of consumer debt, especially that of the working class, which is deeply in hock. His comments will appear as the Review of the Month in the May issue of Monthly Review. Cheryl Payer made remarks on the Third World. My presentation focuses on the economic situation and the labor movement. The room was absolutely packed with people actually sitting on the floor all around the panelists' table. The audience seemed to like my remarks, so I thought some of you might find them of interest. comments and criticisms welcome. Feel free to circulate. I haven't fixed all the typos yet.

Whither the Boom, Whither the Labor Movement?


Michael D. Yates

University of Pittsburgh at Johnstown

Johnstown, PA 15904

mikey at


While economic booms come and go, one thing remains the same. Capitalism is, in boom and bust, in period of long-term stagnation or steady growth, a system in which the accumulation of capital rests upon the ability of capital to exploit wage labor. That is why the relationship between capital and labor is central to the Marxist analysis of capitalism. I do not want to enter into the sometimes contentious discussion concerning the connection between the capital-labor relationship and the trend in the general level of economic activity. It has been argued recently that what really matters here is the competition among the various capitals. This is a position which I find difficult to accept, but I have not given the matter the kind of sustained attention required to offer a strong critique of it. Therefore, in my remarks today, I am going to focus on the reverse relationship: what is the connection between the trend in the general level of economic activity here in the United States and the likelihood that the labor movement will become more militant and class conscious. Does it matter, in terms of the development of the labor movement, whether we are now in the midst of a long-term period of economic growth, akin to that which commenced at the end of the Second World War or in a short-term and unsustainable boom that will soon give way to a continuation of the economic stagnation which took hold as the long post-war growth ended, in the early 1970s?


There are several things which I think are now pretty clear in light of our experience during the past 50 years. First, a period of sustained growth creates an empowering climate for workers. A growing economy depresses the rate of unemployment, tightening labor markets and putting upward pressure on wages. A declining unemployment rate increases the security of working people, and this increases the likelihood of their aggressiveness vis-a-vis employers. A falling unemployment rate narrows the unemployment differential between black and white workers, and this can facilitate cooperation between them. Rising incomes generate higher revenues for the government without higher tax rates, and this might make it easier to argue in favor of progressive social spending.

Yet, it would be foolish to believe that these things happen automatically as per the dogmas of neoclassical economics. During the early 1990s when the current boom got going, real wages fell even as output and productivity grew. And real wages have not rebounded all that vigorously as the economy has boomed in the last couple of years and official unemployment rates have been very low (Remember, it was not so long ago that economists were saying, as an article of faith, that unemployment rates below 5.5% were possible only with rampant inflation and runaway wage rates). By contrast, real wages grew steadily, apace with economic growth, during the long post-war boom. Today, employers have resisted real wage increases with considerable tenacity. They have dug deep down into the pool of people not usually in the labor force to staff their workplaces and avoid paying higher wages. Daycare centers, notoriously cheapskate employers, have hired grandmothers and persons who are mentally challenged. The quality of the care diminishes, but the wages don't rise. In a Midwestern town with very low unemployment, grocery stores have used children under ten years of age to bag groceries. The wages of migrant farm workers, workers in meat-processing plants, workers in the restaurants and sweatshops of New York's Chinatown are not accelerating because our borders are porous, and employers have an automatic club hanging over the head of illegal immigrants. Many employers just let turnover rates rise, filling jobs as best they can and forcing the existing employees to work overtime. My college pays rock-bottom wages, but it has stayed afloat with part-timers and high turnover, even in disciplines with labor shortages. Private prisons hire guards with criminal records or other serious problem, and when these cannot do the job, they just search for more like them. In addition, a not insignificant amount of production is taking place in prisons, where wages need not ever rise, even if the unemployment rate is zero. (By the way, prisoners are now being allocated to prisons according to a matching process between the labor needs of prisons and the skills of the convicts).

A booming economy might not lower worker insecurity in proportion to economic growth. Employers are always seeking new ways to economize on the use of labor, by reorganizing the labor process and introducing machinery, and this might keep worker insecurity high even in a period of growth. So many workers and working class towns and cities took such an extended beating after the early 1970s that the lingering memory of this might make workers less aggressive than they would otherwise be. And even if we do not accept the position of those who tell us that capital is now so mobile that the least sign of worker insubordination will drive an employer to move elsewhere, enough employees have seen their jobs exported that an employer's bluff to move might have the same effect as a real threat. What is more, economic growth or not, the labor laws are so stacked against labor and employers are so willing to use the law's loopholes and to violate the law, that it takes great courage for workers to consider taking on the boss. Tight labor markets don't seem to matter much here.

Similar arguments can be made with respect to the positive effects of growth on black-white unemployment and income differentials and on the actions of the state. White racism does not depend on interracial competition for jobs. It is embedded into the very fabric of this society, and no amount of economic growth will by itself eradicate it or soften it, for that matter. It never has in he past, that's for sure. A government might take the larger flow of tax revenues and use them for defense or war or to justify large tax cuts.


At best, then, economic growth and low unemployment merely create the possibility that workers will see their life circumstances improve and that workers will become more powerful as a class. For these things to be realized, workers have to effectively organize themselves. At the beginning of the long post-war boom, workers were much more organized than today. Union density was much higher; there were many more strikes; and most important, there was a strong left wing in the labor movement. The left unions and their political allies were in the forefront of the fight against racism; they were strong foes of U.S. imperialism; and they were not tied to the apron strings of the Democratic Party. The fighting spirt of the left cast a shadow over more conservative unions and forced them to be more militant than they would otherwise be.

The strength of labor in this period translated into rising living standards for working people. The UAW was able to negotiate contracts with the big three auto companies that forced the corporations not only to keep wages apace with inflation but also guaranteed an "annual improvement factor" of 3 percent wage increases each year on top of this. This meant that auto workers were assured steadily rising real wages. The big industrial unions pioneered in winning a wide array of benefits for workers, from vacations to health care to pensions to long-term paid leaves. I can say without a doubt that the power of the unions literally changed my life and gave me opportunities I never would have had otherwise.

Today, labor has considerably less power. Union density in the private sector is at levels not seen since the Great Depression. Even with all of the laudable efforts of the revived AFL-CIO and many member unions, it is still extremely difficult to organize workers, to get a first contract, and to make significant gains in well-established collective bargaining relationships. The notion that workers can expect steady increases in real wages and benefits is dead and gone; unions consider themselves successful if they can prevent give backs and win modest wage increases. COLAs are extremely rare, and health care is seldom paid for entirely by the employer. Today, there is no left wing in the labor movement, to both put fear into the hearts of employers and keep the feet of more conservative leaders to the fire. And the long period of union decline has meant that there has been no counter at all to the spread of capitalist ideology. Too many workers are lost in a swamp of consumerism and meaningless leisure. Their dissatisfactions lead them into the arms of the purveyors of the snake oils of religious fundamentalism, white supremacy, talk show punditry, and militias. Unions are so invisible in our culture that all too many workers do not think of them as a real possibility.

We might argue that the revitalization of the labor movement is bound to take time and if the economic expansion continues, labor will regain its old glory. Unfortunately the problem is much deeper than just thinned ranks. The tragedy is that organized labor squandered its potential during the long boom, entering into a deal with employers and the state. In return for employer recognition and regular wage and benefit increases, labor's leaders agreed to cede control of the workplace to management. Employers then were free to make changes in work rules, introduce technology, and open plants in areas in which unions were absent. In return for legitimacy in the eyes of the corporations and the government, labor's leaders expelled the left-led unions and thousands of individual leftists. Given that the left was the driving force of the CIO, pushing it to fight against racism, to organized the unorganized, to condemn imperialism, and to champion union democracy, its expulsion allowed control of the unions and the AFL-CIO itself to be seized by conservative (and liberal) anti-communists without much interest in any of these things. And as these issues were ignored, organized labor was completely coopted into a nationalist and imperialist ideology. Unions came to stand for very little, other than protecting the privileges of the bureaucrats and their white, male base.

As long as prosperity continued and the United States completely dominated so many major markets, the underside of the labor-management-government "accord" remained hidden. But all hell broke loose when the long economic stagnation began in the early 1970s. Organized labor found itself on the defensive but without the vision and the tactics to fight back. Meany and then Kirkland (whose praises by the way, were sung by John Sweeney when Kirkland died) kept hoping that their "friends" would bail them out and things would get back to "normal." Needless to say they did not, and the labor movement teetered on the verge of collapse.

The trouble today is that, while the current AFL-CIO leadership is doing many good things, deserving of our support, to increase membership, it shows few signs of seeing the need to abandon the old nationalist, imperialist ideology and develop a class ideology and practice. The notions that members should actually control their own unions, that labor education ought to focus upon the ways in which this economic system destroys the capacities of working people, that competition in whatever form is antithetical to the practices of a labor movement, that a labor movement cannot thrive unless other progressive social movements thrive as well, that the South and Southwest in this country cannot be organized without a commitment to the empowerment of Blacks, Latinos, and Native Americans in these regions, that solidarity with workers in the rest of the world requires an admission that much of what the AFL-CIO condemns overseas exists here and that U.S. military power is the root cause of the difficulties facing workers in much of the world, and that both political parties in the United States stand for all that is bad for working people–these are not the notions that dominate the thinking of today's labor leaders. So, if the boom continues, here is no guarantee that we will see a rebirth of the labor movement. And even if union membership increases, this does not mean that organized labor will not repeat the mistakes of the last period of extended prosperity.

If the difficulties facing organized labor are daunting even if the present economic boom turns into a long steady economic expansion, these problems might be multiplied a hundred-fold if the boom ends in a serious recession and the continuation of stagnation. The desperation that will then face millions of workers will provide fertile grounds for a resurgence of racism, sexism, jingoistic nationalism, and disdain for foreigners. Employers will be in position to continue the tightening of the screws which have been loosened only slightly during the past two years of expansion. There will be nothing like the ferment of the Great Depression because there will be no left wing to guide it.

The best hope that, come what may economically, working people will advance themselves both in terms of compensation and political power is if the labor movement moves in the direction of what has been called "social movement unionism." Such a unionism sees organizing not as the ultimate goal of the labor movement but as a necessary component of something much broader and deeper. Social movement unionism has as its principles inclusion of all workers, worker control of their unions, anti-imperialism, building inter-movement solidarity, and the creation of a system of production and distribution based up helping each person to fully develop his or her capabilities.

To build such a movement, one capable of growing in any economic climate, it will be necessary for leftists within the labor movement to unify around a common program and push this program inside of every union and in the AFL-CIO. Such a movement cannot and will not come out of the New Voices leadership. Leftists should support the current leadership when it can, but it should support from a position of firmly held principles and it should always push organized labor as hard as it an to move in the direction of these principles.

The main question facing the labor movement, then, is not whether the economic boom continues. This is a question secondary to the question of whether, come what may economically, organized labor is prepared to build a social movement capable of challenging capital.

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