Louis Proyect: The Unrepentant Marxist

January 22, 2020

We the Workers; American Factory

Filed under: China,trade unions,workers — louisproyect @ 8:41 pm

Now available from Ovid, the Netflix for radicals, “We the Workers” is a 174-minute cinema vérité study of labor organizers in China. Despite its economy of means, is an impressive and inspiring take on one of the  most significant class struggles taking place in the world today. Directed by Huang Wenhai, it is shot mostly indoors without much fanfare and consists almost entirely of strategy discussions by men working for the Panyu Migrant Workers Center between themselves and with the workers they serve.

Additionally, as you might expect from a fly-on-the-wall perspective of the cinema vérité genre, you see them coping with daily life—trying to strike a balance between the duress of standing up to an all-powerful state and living a normal life. Often, the scale is tipped toward the duress side. This was the case with an organizer named Peng Jiayong confessing that his wife broke up with him because she couldn’t share the burdens of being married to someone with such a single-minded devotion to changing a seemingly unchangeable system.

As the film begins, we see Peng Jiayong being dressed down by his colleagues for losing his temper with the cops. Joining a protest of 11 women being denied rights guaranteed by the Chinese constitution, Peng refuses to leave the headquarters of the government-backed trade union where the women have gathered to lodge their complaint. When the cops arrive, they sensibly leave. He stays behind and demands to be arrested, even though such defiance will only weaken his efforts on their behalf.

Next we see a meeting between other members of the Panyu staff and some workers who are being conned by the state labor bureau into resigning from their jobs and thus losing benefits accrued over 20 years. Panyu’s lawyer Duan Yi advises them to go as a group to the boss’s office the next day and insist on their legally guaranteed rights, making sure to capture the entire discussion with their smartphones. As becomes obvious throughout the film, the Panyu organizers and the workers they represent are as dependent on the Internet as CIO organizers in the 1930s were reliant on mimeograph machines.

When I saw this scene, I was reminded of a debate in the Boston branch of the Socialist Workers Party in 1971 between Peter Camejo and a minority that viewed support for the Shea bill as reformist. H. James Shea Jr. was a member of the Massachusetts House of Representatives who drafted a bill challenging its constitutionality of the Vietnam War, thus enabling Massachusetts residents to ignore the draft. The minority denounced the bill as reformist since it was based on bourgeois legality. Peter replied that Lenin used to stay up late at night poring through the Czarist law codes looking for loopholes that would allow workers to go out on strike with legal cover. That’s essentially the strategy of the labor organizers trying to strengthen collective bargaining in China today.

Later in the film we meet up again with Peng Jiayong, who was beaten badly by the cops without him giving them any kind of excuse. As he lies in the hospital bed, his only interest is in figuring out how his injuries might be exploited to further the workers struggle.

Lin Dong, Peng’s comrade-in-arms who wisely left with the 11 women before the cops came, has spent time in prison for his organizing efforts. We see him on a street handing out a labor law handbook that can be used by workers to understand their rights. One worker probably spoke for most when he told him that “laws are useless in China.” In many ways, the struggle for working class power in China faces the same obstacles as in the USA. Workers feel weak and vulnerable in the face of Republican open hostility and the Democratic Party’s reorientation to urban, middle-class voters. Throughout the film, we see Panyu organizers hammering away at the idea that a united working class can win victories.

Toward the end of the film, we see a group of workers celebrating such a victory. The mostly female staff of Lide Shoe Factory are at a banquet organized by Panyu, where they get up one by one to express gratitude for its support. In 2015, the China Labor Bulletin wrote about their struggle:

After two strikes and three rounds of bargaining, Taiwanese-owned Lide agreed on 17 December to pay social insurance contributions dating back to 1995 and to a one-off compensation package of between 2,000 yuan and 12,000 yuan, depending on employees’ years of service. The company was also forced to disclose any future relocation plans and continue the dialogue with the workers’ representatives. Management further agreed in writing that it would not retaliate against those representatives.

I first came across the China Labor Bulletin not long after I started the Marxism mailing list in 1998. One of its editors began sending me newsletters about the work of labor organizers such as shown in “We the Workers”. In many ways, the newsletters were analogous to Labor Notes in the USA but documenting much sharper battles. In China, there is a deeper awareness about being exploited than there is in the USA, especially since independent labor action is virtually seen as a crime. In the USA, trade unions are legal but hamstrung by open-shop legislation, the threat of runaway shops, and a general feeling that unions can’t deliver the goods.

Last July, Max Blumenthal and Ben Norton published an attack on a conference co-sponsored by the DSA, Jacobin, and the disbanded ISO. As a supporter of “anti-imperialist” governments like the one led by Xi Jinping, it singled out China Labor Bulletin and other such groups as tools of the CIA and other groups bent on overturning what they regard as Chinese socialism. Ajit Singh, a Grayzone regular, wrote an article for Telesur claiming that “While capitalists exist in China today, unlike in capitalist societies, they are isolated and not organized in pursuit of their collective interests. Instead, they exist under the rule of the socialist state to aid national economic development.”

If aiding national economic development—a term utterly devoid of class criteria—means cheating workers out of benefits and beating up labor organizers who defend them, then what’s the difference between Chinese socialism and capitalist rule? Nothing would make Grayzone happier than to see China Labor Bulletin shut down. They write that “China Labour Bulletin (CLB) is actually based in Hong Kong, and it is funded by the US government.” As proof positive of its “regime change” intentions, they revealed that CLB’s founder Han Dongfang was a leader of the 1989 Tiananmen Square protests as if army tanks were defending socialism against fanatics inspired by Ludwig von Mises. They also attack Han for using Radio Free Asia to push “anti-communist” propaganda. If communism involves cheating workers out of back pay and beating up men who fight on their behalf, then I guess I am anti-communist myself.

At the banquet for the Lide workers, Xiaomei, a female Panyu organizer, addresses her sisters: “The liberation of workers’ rights can only come through workers. Only when workers have power will the government and companies make concessions and society show its support. But how do workers get power? Through unity. There’s only one way. Unity. Coming together.”

Given the repressive nature of Chinese society, one can understand why there is no footage inside a Chinese factory where you might have seen workers confronting the boss. Ironically, the best way to see how such clashes unfold is to see “American Factory” on Netflix. This film was released last August as part of a five-film deal between Netflix and the Obamas. I avoided press screenings since I assumed that anything produced by the Obamas had to be tainted.

After seeing it for the first time this week, I can happily report that it makes an ideal accompaniment to “We the Workers”. It shows auto workers in Moraine, Ohio dealing with Fuyao, a Chinese firm that had purchased the recently closed GM plant that turned glass into automobile windows. The film was co-directed by Julia Reichert and Steven Bognar, who have collaborated on a number of films since 1990. On her own, Reichert has directed “Union Maids” and “Seeing Red: Stories of American Communists”, two of my favorite documentaries.

Like most workers, those who had been working for GM enjoyed excellent pay and benefits. When GM shut down, they became like the people Michael Moore spoke to in “Roger and Me”. Hopeless and broke. One woman in her fifties, a former forklift operator, has had her house foreclosed. We meet her living in the basement of a relative with nothing but a bed to sleep on and her belongings spread about in boxes on the floor.

When she and other workers in her position find out that Fuyao has bought the plant and begun recruiting from the pool of laid-off GM workers, they feel rejuvenated. Things start out with a bang. Fuyao founder and CEO Cao Dewang shows up in Moraine to give the marching orders to the Chinese managers who will be working side by side with their American counterparts. In a strategy meeting with just the Chinese managers and the workers who have relocated from China, Cao warns them that Americans are not as motivated as them.

Once production begins at the resuscitated factory, things come to a head rapidly. To begin with, safety has been sacrificed in order to meet new, much more ambitious, production quotas. An American supervisor who is fluent in Chinese meets with his Chinese counterpart to discuss the failure to meet the new quotas. The American is told that his countrymen in the factory talk to each other and joke around too much, which sounds like most factories in the USA. The American says that duct tape is the answer. The Chinese supervisor looks at him with a puzzled expression as if the duct tape was supposed to be used on machines. No, the American explains, we tape their mouths.

An African-American worker in his fifties says that throughout the decades he worked for GM, there was never a single accident at the factory. Now, under Chinese ownership, there have already been 11 in the first year.

One of the more telling scenes in the film involves the forklift operator who has been able to move out of her relative’s basement. She frets that the forklift operators at Fuyao are being asked to move around heavy loads of glass that the machinery could not handle safely. She turned out to be right. A year after Reichert and Bognar filmed this scene, her worries were confirmed:

Fuyao Glass America Inc. forklift operator Ricky Patterson was discovered early Tuesday morning nearly five minutes after more than 2,000 pounds of glass fell on him, trapping the 57-year-old Dayton man against his vehicle, according to Moraine Police Division documents.

The Occupational Safety and Health Administration is investigating the events that led to Patterson’s death. Fuyao, Moraine’s largest employer with about 2,000 workers, was fined $100,000 by OSHA last year for “serious” safety violations. Employees have repeatedly expressed concern about workplace safety.

It was not only accidents that began to stir the American former-GM workers to take action. It was also encroachments on their rights as human beings. For example, the on-premises lunchroom was converted into a production unit, thus leaving them without a place to have a meal in comfort. Even more crucially, they were not getting the kind of wage they used to earn. Starting pay was $14 per hour, about the same as you might make at McDonald’s or Walmart. One worker speaks at a UAW hall, where plans are being made to organize the plant. He points out that his daughter polishes nails out of her apartment and she made $17,000 more than him last year.

Like in other auto factories, especially in the south, getting a UAW local off the ground is very difficult as Volkswagen employees found out in Tennessee. The bosses use heavy-duty indoctrination against union organizers and the threat of permanent replacements or relocation outside of the USA to pressure workers into voting against a union shop. This is what happens in Moraine as well.

While most of the film is devoted to the events transpiring in Ohio, we also see how Fuyao runs its operations in China. You learn that management exploits the legacy of the Maoist revolution to keep workers in line. We see large posters of the Chinese presidents starting with Mao and ending with Xi Jinping lined up in a reception area with a Fuyao trade union official explaining that factories, the Communist Party, and the state-backed unions working like interlocking gears. As it happens, the trade union official is the brother-in-law of the plant manager.

In a review of “American Factory” for Jacobin, Joe Allen complains that “American Factory Stops Short of Class Conflict”. In his view, “the film leaves the door open to anti-Chinese xenophobia.” This conclusion is drawn not on the basis of anything in the film itself but because of an interview the Obamas gave. In keeping with their cluelessness about the problems facing working people, they said, “If you know someone, if you’ve talked to them face-to-face, if you know what their story is, you can forge a connection. You may not agree with them on everything, but there’s some common ground to be found and you can move forward together.” There’s little connection between what they said and what Reichert and Bognar wanted to say in this film.

My strongest recommendation to those trying to understand problems the labor movement is facing both here and in China is to see the two films in tandem. As I have said on multiple occasions, Ovid is the go-to place for leading edge cinema. If you are not yet a subscriber, I urge you to start now (https://ovid.tv/). It will be the only place to see “We the Workers”, a film that prefigures major class battles that have the potential to shake up the world’s second wealthiest nation in the world, one that is communist in name only. With workers determined to win the rights that the American trade union movement once enjoyed, both here and in China, the stakes are enormous. Just before his assassination, Trotsky was preparing an article on the trade unions that including the following observation. It is as true today as it was back in 1940:

From what has been said it follows quite clearly that, in spite of the progressive degeneration of trade unions and their growing together with the imperialist state, the work within the trade unions not only does not lose any of its importance but remains as before and becomes in a certain sense even more important work than ever for every revolutionary party. The matter at issue is essentially the struggle for influence over the working class. Every organization, every party, every faction which permits itself an ultimatistic position in relation to the trade union, i.e., in essence turns its back upon the working class, merely because of displeasure with its organizations, every such organization is destined to perish. And it must be said it deserves to perish.

November 29, 2019

The Irishman

Filed under: Counterpunch,crime,Film,Kevin Coogan,trade unions — louisproyect @ 3:51 pm

COUNTERPUNCH, NOVEMBER 29, 2019

Two days ago, I received a DVD for Martin Scorsese’s “The Irishman” that lets me off the hook. I will be nominating it for best film of 2019, with it even edging out some of the foreign language films I prefer. (The overhyped Korean film “Parasite” does not make the grade.) The title refers to Frank Sheeran, an Irish-American Teamster official with mob connections who confessed to killing Jimmy Hoffa. Robert De Niro plays Sheeran and Al Pacino plays Hoffa. Rounding out the major roles is Joe Pesci, who retired from acting in 1999. Scorsese and De Niro persuaded him to play Russ Bufalino, the mob boss whose brother Bill was the lead attorney for the Teamster’s union. These characters and just about every other featured in the film were historical figures. As is generally the case with Scorsese’s flicks about real people such as Jake LaMotta, Howard Hughes, et al., you’ll find few major fictional characters.

Continue reading

October 7, 2019

Was there anything “socialist” about CIO officialdom’s alliance with FDR?

Filed under: Jacobin,New Deal,socialism,trade unions,Trotskyism — louisproyect @ 9:17 pm

UAW President Walter Reuther conferring with President Harry S. Truman in the Oval Office, 1952

On October 2nd, Jacobin published an interview with Jake Altman titled “The Socialist Party in New Deal–Era America” that made an amalgam of Norman Thomas’s party and FDR. This is not the first such exercise in bad faith. On June 19th, Seth Ackerman wrote an article titled “Why Bernie Talks About the New Deal” that made identical points. It is understandable why these “democratic socialists” would try to shoehorn Norman Thomas’s SP into their neo-Kautskyist political agenda.

If the DSA is a continuation of Norman Thomas’s Socialist Party as Thomas was a continuation of Eugene V. Debs, then everything is hunky-dory especially if you can convince people that Thomas “viewed Roosevelt’s program for reform of the economic system as far more reflective of the Socialist Party platform than of his own [Democratic] party’s platform”. The quote is from a Norman Thomas biography that Ackerman thought would bolster his SP/New Deal amalgam. Whatever credibility the biographer claimed, it seems unlikely that he ever thought much about the words of Norman Thomas himself who once said, “Emphatically, Mr. Roosevelt did not carry out the Socialist platform, unless he carried it out on a stretcher.”

For Ackerman and Altman, one of the main proofs of the socialist character of the New Deal was its cheek-by-jowl connection to the CIO’s organizing drives. Ackerman writes, “By 1936, the newly formed industrial unions that grew out of those strikes had become the core of his political base, and most were led or had been organized by socialists and communists: Walter Reuther of the United Auto Workers, Sidney Hillman of the Clothing Workers, Harry Bridges of the Longshore Workers, John Brophy of the CIO. At the same time, thousands of socialist and communist experts flooded into the New Deal agencies, including the National Labor Relations Board and the Treasury, Agriculture, and Commerce departments.”

Altman says about the same thing. “You also have socialist leaders and organizers in a number of unions, and they achieve a lot in terms of building a robust labor movement in the United States. They didn’t do it on their own, but through coalitions they were able to build some really impressive institutions like the United Auto Workers (UAW). It helped that they had allies in unions that were already led by social democrats, including the Amalgamated Clothing Workers of America (ACWA). The ACWA poached promising organizers from the Socialist Party for union work, and some of these socialists went on to hold important positions in the labor movement for decades. The most well known are the Reuther brothers. There was a robust middle rank, too.”

Missing from this analysis is any reference to the Little Steel Strike of 1937 when FDR allowed the bosses to smash the trade union organizing drive led by Gus Hall and other radicals. In FDR’s infamous words, he told capitalists and workers “a plague on both your houses”. Furthermore, there is little evidence that organizing drives to build industrial unions in and of themselves have that much to do with socialism. Both Ackerman and Altman view the Reuther brothers as symbols of the ties between the Socialist Party and the New Deal. However, Walter Reuther not only quit the SP in 1939; he led the purge of CP members from the CIO after becoming president of the UAW in 1947.

What neither Ackerman and Altman can seem to grasp is the dialectical relationship between FDR’s relatively tolerant attitude toward CIO type unionism and the co-optation of the working-class into the imperialist hegemonic aspirations of the USA from 1941 onwards. In order to rely upon working-class support for its colonial wars abroad, it was necessary to offer sufficient material gains to make co-optation feasible.

Just before his untimely death, Leon Trotsky wrote an article titled “Trade Unions in the Epoch of Imperialist Decay” that was discovered in a desk drawer. If you’ve never read it, I urge you to take a look. And, if you have read it, I urge you to take a fresh look since it shows Trotsky at his most prophetic. Of the CIO, he writes:

In the United States the trade union movement has passed through the most stormy history in recent years. The rise of the CIO is incontrovertible evidence of the revolutionary tendencies within the working masses. Indicative and noteworthy in the highest degree, however, is the fact that the new “leftist” trade union organization was no sooner founded than it fell into the steel embrace of the imperialist state. The struggle among the tops between the old federation and the new is reducible in large measure to the struggle for the sympathy and support of Roosevelt and his cabinet.

On December 13, 1942, Walter Reuther wrote an article for the N.Y. Times titled “Labor’s Place in the War Pattern” that illustrated exactly what Trotsky was warning about.

These tragic realities must compel American labor to an appreciation of its obligations as a major member of America’s war team. Labor’s place in the new pattern that war has forced on America is clear.

Labor’s first obligation is to realize that we are not now producing solely to provide our population with their everyday needs, but that we are producing primarily to protect our freedom, our nation and our homes from destruction.

Labor must face the challenge of the war as it would a forest fire or a flood that menaced the home town. The promise of labor’s spokesmen that strikes will be abandoned for the duration of the war, a pledge which has been underwritten by labor’s organizations in conventions, must be honored.

That no-strike pledge would haunt the UAW and other CIO-type unions until this day. The “national interest” is just a cover-up for the right of the rich to enjoy their wealth without any concerns for the needs of working-people. It is exactly how GM managed to impose a two-tiered pay scale on the UAW and how it is trying to maintain its grip on “our nation’s” well-being.

For an alternative to Walter Reuther’s class-collaborationism, I recommend Art Preis’s “Labor’s Giant Step”. Preis was a member of the SWP whose book diverges sharply from Ackerman and Altman’s gauzy portrayal of FDR’s partnership with CIO officialdom. This excerpt will show you how some workers defended their class interests during WWII despite the no-strike pledge:

There were many signs of the growing restiveness of the industrial workers as 1942 drew to a close and during the opening months of 1943.

The coal miners, for the most part isolated in small towns, were squeezed worst of all. When Pennsylvania anthracite miners started an unauthorized walkout on January 2, 1943, it was clear that they had reached a point of open revolt against economic conditions.

On March 10, the UMW opened negotiations with the Appalachian soft coal operators. Among the seven demands [union president John L.] Lewis and the UMW committee presented to the mine owners were: (1) retention of the existing 35-hour, five-day week in the coal mining industry; (2) inclusion of all time traveled from the pit entrance to the point of work and back to the surface as part of the paid work time; (3) a $2-per-day raise in base pay.

The UMW president cited the terrific accident rate in the mines due to lack of safety equipment: 64,000 men killed and injured in 1941; 75,000 in 1942; an estimated 100,000 in 1943, with the intensification of war production.

The mine owners brushed aside the UMW’s demands and the Roosevelt administration intensified pressure on the union to capitulate.

Roosevelt himself intervened as the April 1 mine strike deadline approached. He asked the operators on March 27 to agree to extend the existing contract beyond April 1 and make any subsequent wage adjustment retroactive to that date. At the same time he said that the dispute must be settled “under the national no-strike agreement of December 26, 1941” with “final determination, if necessary, by the National War Labor Board.”

The moral position of the miners was becoming stronger every day. The CIO [Congress of Industrial Organizations] and AFL [American Federation of Labor] leaders backed the miners’ demands and, for the time being, refrained from open attacks on the UMW’s threat to strike. Local bodies of the United Auto Workers and other CIO unions passed resolutions of unconditional support for the miners.

On April 22, the WLB announced it was assuming jurisdiction of the case. The UMW refused to appear before this “court packed against labor.” On April 24, WLB Chairman Davis announced that the board would consider the case only within the framework of the Little Steel Formula, which automatically ruled out any raises for the miners.

Miners in Western Pennsylvania and Alabama left the pits that same day, a week in advance of the truce deadline.

The United Press reported that 41,000 bituminous miners were already out.

 FDR as strikebreaker

The spreading coal strike forced Roosevelt to step forward personally to take public responsibility for leading the opposition to the miners. He telegraphed Lewis on April 29 that he would use “all the powers vested in me as President and Commander in Chief of the Army and Navy” if the strikes were not ended by the morning of May 1. Roosevelt’s threat brought an immediate defiant reply from the mine workers. Nearly 10,000 Ohio miners left the pits. By the morning of Saturday, May 1, every union soft coal mine in the country was closed.

The national strike of the miners was not only the largest coal strike the country had seen up to this time. It was the largest single strike of any kind the land had ever known. It was carried out with a dispatch, discipline and single-minded determination that had never been surpassed in the American labor movement.

The press did surpass itself in the volume of vituperation, slanders and threats hurled at the miners and Lewis. Lewis was linked with Hitler in newsreels, on the radio, in countless newspaper cartoons. Union leaders joined the chorus of anti-labor forces who were screaming for nothing less than the destruction of the miners union under the guise of aiding the war for “democracy.”

On May 1 Roosevelt himself ordered government seizure of the struck coal mines under Solid Fuels Administrator Harold L. Ickes. Ickes “seized” the mines by promptly ordering the American flag to be flown over all mine properties and directing all mine owners and managers to run the mines as government agents in the name of the government—all profits to continue as usual. Ickes then declared the miners were working “for the Government” and ordered them back to work.

The miners didn’t budge.

It was during the first of the series of wartime coal mine strikes that the Communist Party revealed to what depths of treachery it could really sink in order to demonstrate to the United States capitalists how useful the CP could be to them if American capitalism would make some kind of permanent deal with the Kremlin.

The May 1-4 national coal strike brought the anti-labor, strikebreaking activities of the Communist Party to a peak of ferocity that the vilest capitalist enemies of the unions did not surpass. On April 29 the Daily Worker carried a front-page appeal by CP National Chairman William Z. Foster, urging the miners not to respond to their union’s strike call.

On the morning of June 1, some 530,000 miners refrained from entering the pits “without any special strike call being issued and with casual matter-of-factness,” as George Breitman, the Militant’s correspondent, wrote from the mining area around Pittsburgh.

 ‘Can’t dig coal with bayonets’

Roosevelt, on June 3, threatened to call out the troops unless the miners returned to work by June 7.… The miners merely shrugged and repeated their classic phrase: “You can’t dig coal with bayonets.”

By the time the official strike deadline, November 1, had arrived, all 530,000 coal miners were out, for their fourth official national wartime strike within one year.

Roosevelt was at the end of his rope. He could not arrest 530,000 miners. He could not force them to go down into the pits at bayonet point, and even if he could, they need not mine an ounce of coal. He could not jail Lewis and the UMW leaders, for the miners swore they would strike “till Hell freezes over” if Lewis were victimized in any way. The President again seized the struck mines and authorized Ickes to negotiate a contract.

The WLB on November 20 finally agreed to a contract acceptable to the union and contractors. This fixed the mine wage at $57.07 a week and provided $40 to each miner for retroactive payment for travel time.

The UMW Policy Committee ratified the new contract on November 3 and instructed the miners to return to work. They had cracked the wage freeze.

If the miners had not fought and won, if they had been defeated, it would have meant not only the crippling and possibly the crushing of one of the most powerful industrial unions—the UMW—but a demoralizing blow of shattering proportions for the auto, rubber, steel, electrical equipment, and other CIO workers. The government would have introduced new “formulas” to slash wages, increase hours of work and intensify the exploitation of labor in the name of patriotism and the “needs of the war.”

Instead, the miners’ victory opened a whole new wave of labor struggle, mounting steadily through 1943, 1944 and 1945, reaching a titanic climax in the winter of 1945-46.

The miners themselves were able to go on from victory to victory in the war and immediate postwar period, winning many new gains, such as health and welfare funds, retirement pensions and other conditions, which then became objectives of the CIO unions as well.

 

September 18, 2019

Smash the two-tier labor system!

Filed under: trade unions — louisproyect @ 9:34 pm

I first became aware of the two-tiered wage system in 1997 when UPS workers, organized by the Teamsters, went on strike to challenge the growing reliance on part-time workers who earned only $8 per hour. In a good article on the strike for Jacobin, Joe Allen, who worked for UPS for a decade, summed up the victory that a militant, 1930s-type struggle had won:

The company reached a tentative agreement with the Teamsters on August 20, 1997, fifteen days after the strike began. UPS agreed to the union’s main demands to create ten thousand full-time jobs out of low-wage part-time positions, the largest wage increases in UPS history, and protection against subcontracting of union jobs. The company also backed off its plan to hijack the full timers’ pension fund.

Ron Carey hailed the agreement as an “historic turning point for working people in this country. American workers have shown they can stand up to corporate greed,’” he said.

It was the biggest labor victory in a generation and led many people to believe that the US labor movement was finally poised for a dramatic comeback. Referring to the aftermath of the air traffic controllers’ strike smashed by Ronald Reagan in 1981, historian Nelson Lichtenstein wrote that the strike ended “the PATCO syndrome, a sixteen-year period in which a strike was synonymous with defeat and demoralization.”

As it happened, Lichtenstein was wildly over-optimistic. Instead, since 1996 the two-tier system has continued and deepened as a way of keeping workers divided. Even the bourgeois Washington Post allows Jacobin editor Alex Press to take note of this in August 2018 despite Jeff Bezos’s embrace of what might be called a one-tier system that screws everybody working for him. Press writes:

“Two-tier” refers to contracts that divide a workforce into distinct wage and benefit tiers based on their hiring date. Workers in both tiers are union members, but they toil under separate conditions. Usually, the lower-paid tier comprises workers to be hired after the contract’s negotiation, leaving them little recourse, even as they are forced to accept lesser terms.

The latest two-tier crisis centers on one of the United States’ largest private-sector unionized employers, UPS. If the company gets its way, it will be a signal to employers nationwide: You can’t directly bust your employees’ union, but here’s a way to divide and conquer, undermining them from within and locking in division between workers in the process.

Ironically, despite a majority of UPS members rejecting a contract that would continue to make concessions to the boss on part-timers, it was ratified anyway. A Teamster vote is only official if it has a certain percentage of members voting and in this case it was beneath that threshold. The vote remained low for obvious reasons. The Teamsters Union is a bureaucratic nightmare and most workers would rather stay at home watching a football game than vote. This wasn’t the case in 1997 when a reformer like Ron Carey led the union. But after he was forced out for campaign irregularities, Jimmy Hoffa Jr. took over and turned into what it is today, a typical business union.

No doubt the men running the UAW are not much different from Hoffa, probably worse. Despite this, the UAW is on strike now with the two-tier wage system being a primary grievance. Once again, Jacobin, despite its woeful tail-ending of the Democratic Party, continues to be a useful source of left analysis of working-class struggles. Jane Slaughter, a long-time journalist on trade union struggles, has an article titled “GM Workers Strike Against Low Wages and Two-Tier Contracts” that is worth reading. She writes about the boiling discontent at the shop-floor level that finally put sufficient pressure on the stiffs at the top to call a strike:

GM was bailed out by taxpayers to the tune of $50 billion in 2009. It made over $8 billion in profits last year, while paying no federal income taxes yet gifting CEO Mary Barra $22 million. For GM to demand concessions from its overworked employees now is a sign that it thinks the UAW is an easy foe.

After all, UAW president Gary Jones may be distracted. His house and that of former president Dennis Williams were both searched by the FBI on August 28. Jones’s top lieutenant before he became president, Vance Pearson, was charged with using union funds for personal luxuries, and it’s widely believed that Jones and Williams will be next. Pearson was the sixth UAW official to be recently charged or convicted of graft.

Crawford said as the strike kicked off, “Yes, the UAW is corrupt. It’s disgusting beyond belief. But this is not about them. It’s about us. We can and will clean house. But we have a more immediate fight on our hands right now.”

Undoubtedly, the UAW strike is a reflection of a change in the relationship of class forces with teachers, airline attendants, grocery store and hotel workers raising hell. It is difficult to gauge where this is all going but it just might be the actual break in the status quo that Nelson Lichtenstein wrote about in 1997.

For background on how the UAW, one of the most militant unions of the 1930s, became so bureaucratically degenerated, I recommend Michael Yates’s Monthly Review article titled “Who Will Lead the U.S. Working Class” from 2013. It is a review of two books about the trade union movement with Gregg Shotwell’s “Autoworkers Under the Gun: A Shop-Floor View of the End of the American Dream” most relevant to its current sorry state. Michael writes:

Union givebacks ultimately led to the decimation of the UAW during the Great Recession. GM and Chrysler declared bankruptcy, and the federal government demanded—and received—draconian concessions from the union in return for a bailout, in which the owners suffered nothing. And in a final blow to workers and the union, partnership and the resultant worker demoralization helped make possible the recent enactment of a right-to-work law in Michigan, the very cradle of industrial unionism.

Throughout all of this, the automobile manufacturers continued unilaterally to pursue their interests. While the union bashed the Japanese, the corporations partnered with Japanese companies. They took the profits they made from union concessions and invested them in foreign operations, which, the author informs readers, are now the major source of their profits, and where corporate assets are not subject to U.S. bankruptcy laws. They began to spin off their parts components, converting them into quasi-independent corporations that now supplied modular components to them (such as steering wheel assemblies and seats). These new entities either operated union-free or, with UAW cooperation, remained union but with much lower wages and benefits, and weaker work rules.

Although not the lunch-bucket stereotype of the old left’s concept of the working class, the members of the Professional Staff Congress in New York, including my wife, are also dealing with a two-tier wage system. CUNY (the City University of New York) relies heavily on adjuncts and they are like the underpaid part-time workers at UPS but put in the same hours as tenured professors like my wife.

James Hoff, who teaches English at the Borough of Manhattan Community College and is tenured himself, has been an untiring advocate for raising the pay and benefits of adjuncts. He has an article in Left Voice titled “Will CUNY Go on Strike?” that is must-reading. His article begins:

More than two years ago, rank and file members of the Professional Staff Congress (PSC) union of the City University of New York began to organize around a set of bold demands for worker equality. At the center of these demands was a call for a minimum $7,000 per three-credit course for adjunct faculty—an amount that would bring them close to parity with their full-time colleagues. Long exploited by management, the use of underpaid adjunct faculty at CUNY has increased dramatically over the last several decades, creating a two-tier wage system that has undermined the PSC’s ability to fight for more funding for the university and divided the union. Recognizing the transformative nature of the demand, which would require a complete restructuring of the university, activists began to rally around the slogan “$7K or Strike!” ($7KOS). These rank and file union members, many of them adjuncts themselves, argued that the most effective way to approach such a demand and still win a good contract for the rest of the bargaining unit, was to begin the negotiations on a militant footing and quickly move toward organizing the membership for a confrontation with management that included the credible threat of a strike.

Even though a strike would present challenges to my wife and me, this is a fight we would gladly take part in. Just two years before she finished her Ph.D. in 2007, she began working as an adjunct at Metropolitan College. In a stroke of luck, she got a tenure-track position at Lehman College that was arduous to say the least. Just two years ago, she became tenured and protected from the vicissitudes of adjuncthood and the tenure-track. I feel a deep solidarity with CUNY adjuncts as should be obvious from this article and wish them victory.

 

December 21, 2018

Can the Working Class Change the World?

Filed under: Counterpunch,revolutionary organizing,trade unions,workers — louisproyect @ 3:17 pm

The cover for Michael Yates’s “Can the Working Class Change the World?” was a stroke of genius. Ralph Fasanella’s “The Great Strike (IWW Textile Strike, 1912)” sets the tone for a book that has deep roots in working-class struggles in the USA and that shares the artist’s solidarity with the people who take part in them. Fasanella’s father delivered ice to people in his Bronx neighborhood and his mother worked in a neighborhood dress shop drilling holes into buttons. In her spare time, she was an anti-fascist activist. The family’s experience informed his art just as Michael Yates’s working class roots and long career as a labor activist and educator shapes his latest book.

Many years ago when I was a Trotskyist activist, the party was consumed with how to reach working people. To be frank, we would have learned more from Michael’s books than reading Leon Trotsky especially given the life experience outlined in the opening paragraph of the preface:

BY ANY IMAGINABLE DEFINITION of the working class, I was born into it. Almost every member of my extended family—parents, grandparents, uncles, aunts, and cousins—were wage laborers. They mined coal, hauled steel, made plate glass, labored on construction sites and as office secretaries, served the wealthy as domestic workers, clerked in company stores, cleaned offices and homes, took in laundry, cooked on tugboats, even unloaded trucks laden with dynamite. I joined the labor force at twelve and have been in it ever since, delivering newspapers, serving as a night watchman at a state park, doing clerical work in a factory, grading papers for a professor, selling life insurance, teaching in colleges and universities, arbitrating labor disputes, consulting for attorneys, desk clerking at a hotel, editing a magazine and books.

Continue reading

March 2, 2018

The shape of things to come

Filed under: trade unions — louisproyect @ 12:41 am

February 28, 2018

Mark Janus vs. AFSCME and the need for a real trade union movement

Filed under: trade unions — louisproyect @ 6:50 pm

The  late Robert Fitch: he argued that the automatic checkoff of dues weakened unions

The left tends to see the Mark Janus vs AFSCME case under deliberation by the Supreme Court as a life-and-death battle for the AFL-CIO. It involves agency fees, the money that non-union members are required to pay in a union shop. Janus sued to prevent them from being imposed. The case was submitted by Bruce Rauner, the Republican Governor of Illinois who is just as much a tool of the Koch brothers as Scott Walker of Wisconsin who pushed through legislation that led to his state becoming an open shop alongside Indiana and Michigan, two other former trade union bastions .

In a similar case (Abood v. Detroit Board of Education in 1977), public unions were permitted to divide expenditures between collective bargaining and political advocacy but Janus claims that any money that goes into the collective bargaining bucket is tantamount to political advocacy since it can be used to press for pension benefits that would drain state and local government treasuries. Liberal outlets like Huffington Post and In These Times fret that a vote in favor of Janus would weaken the Democratic Party since it relies heavily on contributions from AFSCME and SEIU. In a long and informative article for In These Times, Mary Bottari of the Center for Media and Democracy notes:

In 2016, labor was the largest contributor to state-level Democratic candidates, accounting for at least 18 percent ($128.7 million) of their total fundraising. Unions also mobilize their workers as persuasive door knockers at election time who can explain who they are and what they fight for.

Oddly enough, the Center for Media and Democracy received 60 percent of its funding in 2011 from the Schwab Charitable Fund, a philanthropy funded in turn by liberals who have accounts with Charles Schwab & Co. Schwab is a heavy donor to the Republican Party and has even chipped in to pay Donald Trump’s legal fees over Russiagate. Twice a year the Koch Brothers host a secret conference where they and other rich bastards can discuss how to screw the working class. Charles Schwab was there at the last one along with other billionaires who donated to Trump.

I’ve been following the news reports on the Janus case but an Adam Liptak article in yesterday’s NY Times really made me sit up and take notice. He called attention to the assessment of David L. Franklin, Illinois’s solicitor general who supported AFSCME’s case:

The lawyers in the case gave varying answers to questions about what would happen if the mandatory fees were eliminated. “When these kinds of obligations of financial support become voluntary, union membership goes down, union density rates go down, union resources go down,” said David L. Franklin, Illinois’s solicitor general, who argued in support of the union.

“When unions are deprived of agency fees, they tend to become more militant, more confrontational,” he added. “They go out in search of short-term gains that they can bring back to their members and say, ‘Stick with us.’”

Let me repeat what he said with emphasis: “When unions are deprived of agency fees, they tend to become more militant, more confrontational. They go out in search of short-term gains that they can bring back to their members and say, ‘Stick with us.’”

Bingo. No wonder the Democrats and the trade union bureaucracy want to defeat Janus. His victory would threaten to turn the clock back to when the trade union movement was really a MOVEMENT.

It is not just a question of agency fees. It is also a question of the automatic dues checkoff that would not be affected by a ruling in favor of Janus. When people get enrolled in a union today, their dues are deducted from their paycheck just like health insurance and any other “benefit”. With unions failing to fight effectively for workers’ interests today either on wages or benefits, no wonder they are having trouble representing auto workers in the south.

In the 1930s, there was no such thing as union dues payroll deductions. Nelson Lichtenstein, a radical who has written extensively about the UAW, discovered that despite workers joining the CIO en masse after the sit down strikes of 1937, many left the unions when the recession of the late ’30s made it more difficult to win gains. For example over 8,000 workers had signed up with the UAW local at Fisher Body in Lansing by late 1937 but a year later only a little more than 1,000 were still dues-paying members.

Writing for Libcom, an anarchist website, Tom Wetzel provides a history of the union shop that, as you might expect, has a distinctly anti-authoritarian perspective. Like Lichtenstein, Wetzel notes that union membership was voluntary under almost all CIO contracts prior to 1942. The dues “check off” was virtually unknown in the late ’30s and dues were collected on the shop floor by shop stewards and committeemen. It is of course ironic that when the trade union movement was really a movement, it was operating under rules that are now considered inimical to trade union survival.

Echoing the concerns of David L. Franklin but from the opposite class perspective, Wetzel writes:

So long as the union’s continued existence depended upon voluntary rank-and-file support, the local union organization was under pressure to continually mobilize to get results. Grievances were pursued whether or not they were clearly justified by language in the contract, and stewards or local officers supported slowdowns or short wildcat strikes if they thought they might work.

Even when they didn’t approve of wildcat strikes or other direct action, local union officials were reluctant to condone company repression of such actions. The most active participants were almost always key union supporters in the plants. If they simply abandoned them to the company, the local officials were afraid this would discredit the union in the eyes of the workers.

Once the “union shop” had been achieved, however, the local union organization would no longer be under such immediate pressure to mobilize a constant struggle with the employers in response to worker grievances and concerns.

In voicing similar concerns but from a Marxist rather than an anarchist perspective, the late Robert Fitch has tied automatic dues checkoff to the decline of the trade union movement. In an interview with Forbes Magazine, of all places, Fitch stated:

The big problems with American trade unions are the legal foundation of exclusive bargaining, and closed-shop and automatic dues check-off. That exists in SEIU. [Automatic dues check-off] means that, unlike the European system, as a union leader, I’m no longer really dependent for my income on voluntary contributions from the workers. So I can disregard their preferences much easier. In Europe, the union leaders have to depend upon the dues that are voluntarily contributed by the members, so if the members don’t like what the union is doing, they stop paying dues, or they pay dues to another union. They can switch from one union to another.

Needless to say, people like Rich Trumka and Andy Stern have about as much interest in seeing the AFL-CIO transformed along these lines as Samuel Gompers did before there ever was a CIO. Speaking dialectically, it just may be the case that the total destruction of the organized labor movement will have to take place before a new labor movement comes about under the banner of workers power. Leon Trotsky considered such questions in an article titled “Trade Unions in the Epoch of Imperialist Decay”:

Monopoly capitalism does not rest on competition and free private initiative but on centralized command. The capitalist cliques at the head of mighty trusts, syndicates, banking consortiums, etcetera, view economic life from the very same heights as does state power; and they require at every step the collaboration of the latter. In their turn the trade unions in the most important branches of industry find themselves deprived of the possibility of profiting by the competition between the different enterprises. They have to confront a centralized capitalist adversary, intimately bound up with state power. Hence flows the need of the trade unions – insofar as they remain on reformist positions, ie., on positions of adapting themselves to private property – to adapt themselves to the capitalist state and to contend for its cooperation. In the eyes of the bureaucracy of the trade union movement the chief task lies in “freeing” the state from the embrace of capitalism, in weakening its dependence on trusts, in pulling it over to their side. This position is in complete harmony with the social position of the labor aristocracy and the labor bureaucracy, who fight for a crumb in the share of superprofits of imperialist capitalism. The labor bureaucrats do their level best in words and deeds to demonstrate to the “democratic” state how reliable and indispensable they are in peace-time and especially in time of war. By transforming the trade unions into organs of the state, fascism invents nothing new; it merely draws to their ultimate conclusion the tendencies inherent in imperialism.

 

March 3, 2017

Reform or Repression: Organizing America’s Anti-Union Movement

Filed under: trade unions — louisproyect @ 2:28 pm

COUNTERPUNCH MARCH 3, 2017

The Scab Economy: the Origins of America’s Anti-Union Movement

Ever since Donald Trump became a front-runner in the 2016 primaries, leftwing pundits have offered varied historical analogies to help identify the threat we face. Was he more like Hitler or more like Berlusconi? In my view the best prism through which to view Trump is American history itself. Ever since the Reagan presidency there has been a concerted effort to turn the clock back to the 1880s—the gilded age. Or maybe even further back to Andrew Jackson, whose portrait Trump hung in the oval office. After all, it was Jackson who conned both voters and latter-day historians into believing that he was for the common man. Or fast forward to 1919 when the progressive Woodrow Wilson authorized the Palmer Raids that led to the deportation of 500 foreigners during a Red Scare.

The counter-clockwise rotation speeds up under Republican presidents and slows down a bit under Democrats but it never stops. Only a revolution will reset the clock once and for all.

I was reminded of this while reading Chad Pearson’s Reform or Repression: Organizing America’s Anti-Union Movement that was published in 2015. If you knew nothing about the contents, you might assume from the title that it referred to the Truman presidency when the Taft-Hartley bill was passed. But instead it harkens back to the turn of the century when Theodore Roosevelt was president and whose Square Deal meant conservation, trust-busting, respect for workers and other progressive measures.

Read full article

January 29, 2017

Divided We Fall

Filed under: Film,financial crisis,trade unions,ultraright,Wisconsin,workers — louisproyect @ 9:03 pm

If victorious strikes by teamsters in Minneapolis in 1934, by San Francisco dockworkers the same year and auto workers three years later in Flint define the rise of the American working class as a powerful force to be reckoned with, three confrontations between labor and capital in our lifetime mark its retreat.

In 1981 Ronald Reagan fired 11,000 airline controllers who had gone out on strike as a signal that the partnership between labor and capital was a thing of the past. Four years later, the meatpacking workers organized as P-9 struck Hormel in an effort to maintain the good-paying jobs with generous benefits that were seen as essential for a decent middle-class existence. With the defeat of P-9, jobs at Hormel and other meatpacking jobs became non-union, low-paying and dangerous with a predominantly immigrant workforce made up in large part of vulnerable undocumented workers.

While not a strike as such, the union-led struggle in Madison, Wisconsin of 2011 was launched to prevent teachers and other public service employees from being “Hormelized”. When Governor Scott Walker introduced a bill in January of that year that would cut wages, benefits and eliminate dues checkoff—a mechanism that is essential to keeping a union functioning in a closed shop environment—over 100,000 people took part in a “kill the bill” movement that adopted many of the tactics of the Occupy Wall Street movement that erupted a couple of months later.

For those not old enough to have bitter memories of the P-9 strike, I recommend tracking down Barbara Kopple’s 1990 film “American Dream” that unfortunately is nowhere to be seen on VOD but that can be borrowed as a DVD from better libraries, such as Columbia University’s. Kopple is also the director of “Harlan County, USA”, another documentary about labor struggles, in that case a 1973 strike by coal miners in the legendary pro-union county that voted 8-1 for Donald Trump in November.

Kopple has declined in recent years, stooping so low as to make a documentary about Woody Allen in 1997 and following up with a docudrama about the Hamptons in 2002 that was a Yankee version of British soap operas like Upstairs/Downstairs or Downton Abbey.

Fortunately for us, a new Barbara Kopple has emerged, namely Katherine M. Acosta, the sociologist and obviously politically advanced director of “Divided We Fall”, a film about the Wisconsin labor struggle that I had the good fortune to watch yesterday. For now, the film has not found a distributor and hopefully this review will inspire some enterprising party to invest in this film that is equal to Kopple at her best and moreover a story that demands the attention of everybody trying to understand how we have ended up with an orange-haired baboon in the White House determined to throw us back to the 1880s. Essentially, the defeat of the public workers struggle in Wisconsin involved all of the players and all of the contradictions that led to the defeat of Hillary Clinton and the nightmare we are now living with.

Even if you’ve read every article about the Wisconsin struggle as it was unfolding in 2011, nothing comes close to seeing exactly how young people and workers rallied to the capitol building to put their bodies on the line to oppose Scott Walker’s anti-labor assault that was as calculated a bid to destroy organized labor that year as Reagan’s firing of the airline controllers was in 1985.

Acosta draws from a wide variety of interviewees, from relatively lowly teaching assistants at the U. of Wisconsin, including FB friend Elizabeth Wrigley-Field, who is a brilliant Marxist analyst in her own right, to sociology professor Rahul Mahajan, who I first ran into in the mid-90s as a graduate student on the list that would evolve into Marxmail. Rahul is witty, wise and as informed in class analysis as Wrigley-Field. So, with people like that in the front ranks of the occupation of the capitol building and in strategy meetings, what could have gone wrong? The title of the film says it all. The movement was divided and as such bound to fail.

There were basically three blocs involved within the workers’ camp but each with its own priorities. Those closest to the student movement like Wrigley-Field and Mahajan were revolutionaries, to put it bluntly. They saw the fight against Scott Walker in exactly the same way that Farrell Dobbs saw the fight to organize truck drivers in 1934, as the first step in building a new (in this instance, renewed) labor movement that could fight effectively for the interests of workers in general and lead ultimately to a transformation of American society.

In the middle were union officials at the local level who had to stand up for the rights of their membership, those people who would be forced to pay more for health insurance and face wage stagnation. Like the average member, the officials had a class status just one step above precarity. Losing a job as a clerical worker in an AFSCME union could plunge some into penury and worse. The officials often came directly out of that social layer and knew what was at stake.

The head of AFSCME, who was led off in handcuffs toward the end of the film, was Marty Beil. Beil, who died two years ago, was a bear of a man with Michael Moore’s physique (or lack thereof) who understood the importance of AFSCME better than the top officials in Washington. Formed in Wisconsin in 1932, AFSCME was the first and foremost organizer of predominantly white collar clerical government jobs even though it grew to include firefighters. It is of some interest that Beil’s first job was as a probation and parole officer, not exactly the sort of position that you would associate with labor militancy. As the film makes clear, the police presence at the capitol building was initially drawn from campus and local cops who were much more sympathetic to the struggle, even to the point of marching in support. Such contradictions might vex those addicted to Marxist schemas but one that the film skillfully engages with especially as these cops were replaced by state troopers who had no use for workers at all.

Another powerful presence from the local labor movement was John Matthews, the president of the city’s public schoolteacher’s union who combines a soft-spoken Midwest speaking style with a willingness to openly confront the national leadership of his union. These big shots parachuted into Madison and stayed at a luxury hotel, where they mapped out a strategy to settle the strike on terms favorable to Scott Walker.

For reasons probably having something to do with being reluctant to defend their role in in Acosta’s film, they are not heard from. But you don’t need to hear from AFSCME president Gerald McEntee to know what agenda he would follow in Madison. In 2009, McEntee was being paid $480,000 per year. When you make that kind of money, plus fringe benefits such as staying at Madison’s best hotel on the membership’s dime, you tend to lose track of the sort of class antagonisms that drove the average worker to rise up.

Another problem was the reliance on Democratic Party “friends of labor” who were just as eager as McEntee to deescalate the struggle in Madison and get things back to normal, even as they were giving speeches in support of the unions and in working to undermine Republican attempts to steamroll through Walker’s legislation.

If the film consisted of nothing but talking heads, it would still be worth watching, particularly to hear from Wrigley-Field, Mahajan and other radical students and professors at the U. of Wisconsin. But beyond that, Acosta was present throughout the occupation directing her film crew to capture the Occupy Wall Street type drama of those sitting in. That footage combined with the commentary by people involved with the struggle make up for an unforgettable movie experience that screams out for nationwide distribution.

The film makes clear that occupy type tactics could only go so far. The Republicans had a majority in the state legislative bodies and would ultimately prevail. Of course, the real question is why a shit-hook like Scott Walker could ever become governor of a progressive state like Wisconsin.

Once the occupation ran out of steam (helped along by “kettling” tactics by the state troopers), the trade union officials and Democrats thought that the answer was to replace Walker. Instead of considering ways to block the legislation by either a general strike (probably an over-projection by some leftists) or guerrilla tactics in the workplace like “sick-outs” or working by the rule, all the energy went into the recall campaign.

But the recall was to no avail. Walker was reelected. Why?

He was reelected because he was to Donald Trump as his Democratic Party opponent Tom Barrett was to Hillary Clinton. Walker had defeated Barrett in 2010 and by even more votes in the 2012 recall election. This has to do with Barrett running exactly the same kind of campaign as Clinton, one geared to the “swing voter” and careful to avoid any association with trade unions, sit-ins and the like.

But looking past the Wisconsin context, which the film understandably did not try to address, I would suggest that there was an important element that militated against success. As the film’s title implies, there were problems of being divided—but not just within the labor movement but in the Wisconsin population as a whole. Seen as benefiting from Democratic Party largesse, the taxpayers felt that these unions were a privileged layer. If Wisconsin was facing a fiscal crisis, why shouldn’t teachers et al not have to “chip in” to bail out the state?

The fiscal crisis, of course, was rooted in a system that included “starving the beast”. State budgets were in the red because taxes kept being cut. If the Democratic Party had stood up to the rich, returned tax rates to what they were under Eisenhower, pushed through single-payer health insurance and stood up for the rights of homeowners who had been devastated by the subprime meltdown of 2008, maybe the voters would have been more motivated to back the Democrats. This would have required a total transformation of the labor movement that might yet be in the offing as we sail into the stormy seas facing us over the next four years. As Harriet Rowan, one of the politically astute graduate students interviewed in the film, put it toward the end of the film, we can’t wait for the leadership to catch up with the people.

 

 

January 22, 2017

Wilbur Ross: the dubious savior of the steel industry

Filed under: Donald Trump,economics,trade unions,workers — louisproyect @ 11:29 pm

161130_vod_orig_eyntk_wilburross_16x9_992
Wilbur Ross

When it comes to Trumponomics, most of the left’s attention has been riveted on the new Treasury Secretary Steve Mnuchin for obvious reasons. As CEO of OneWest, he pushed mercilessly to foreclose on homeowners whose mortgages he held, making the banker played by Lionel Barrymore in Frank Capra’s “It’s a Wonderful Life” look like a member of the Catholic Workers by comparison. Politico reported:

Two years ago, OneWest filed foreclosure papers on the Lakeland, Florida, home of Ossie Lofton, who had taken a reverse mortgage, a loan that supplies cash to elderly homeowners and doesn’t require monthly payments.

After confusion over insurance coverage, a OneWest subsidiary sent Lofton a bill for $423.30. She sent a check for $423. The bank sent another bill, for 30 cents. Lofton, 90, sent a check for 3 cents. In November 2014, the bank foreclosed.

So, this is a guy that is supposed to stop “the carnage”?

Much less attention has been paid to Wilbur Ross, the 79-year old “King of Bankruptcy” that is the new Secretary of Commerce, a department that is charged with promoting economic growth. Ross would seem to be a perfect fit for Trump’s “America First” outlook since he is credited with saving thousands of jobs in the Rust Belt, particularly in steel. His approach is to buy distressed companies and make them profitable again, saving jobs in the process. Part of his strategy is to lobby for tariffs that would protect companies like LTV (Ling-Temco-Vought) that he bought at fire sale prices in 2002. His strategy mimicked that of Steve Mnuchin who bought IndyMac in 2012 at a bargain basement price and turned it into OneWest.

As the ostensible savior of American steel, Ross earned plaudits from Leo Gerard, the USW president. NPR, a public radio station with a liberal slant a bit to the left of PBS, put Ross in the best possible light:

“With Wilbur it’s been almost 15 years now, and those mills are [still] running and some of them are the most productive in North America,” Gerard says.

By that time, ISG had become the largest steel company in America by buying up failing steel companies including Bethlehem Steel, LTV Steel and Acme Steel. Gerard says the jobs Ross saved were at the mills themselves and at the companies in supply chain.

If Trump and Ross are hoping to replicate policies that are supposed to be a radical departure from neoliberal “carnage”, it is useful to remember that George W. Bush was a major supporter of protectionism for the steel mills that Ross owned.

With Bush anxious to win over the kinds of voters that helped Trump win the presidency, he announced on Feb. 27, 2002 that tariffs would be imposed on steel imports for three years and a day. That was the same day when Ross announced a deal to take over LTV. Perfect timing, I’d say.

What NPR did not mention is the downside of the deal. After taking over LTV, he fired half the workers. His “rescue” was the same kind as Trump’s of Carrier, which also sustained a heavy loss of jobs to stay in the USA. Since Ross bought LTV in bankruptcy court, he was able to shed $7.5 billion in pension funds to the government.

In 2006 Frontline, a PBS documentary show, reported on the fate of LTV retirees, including a man named Chuck Kurilko. This was his story:

After 38 years in the mill (most of it working night shifts so he could be with his kids after school), Chuck had retired from LTV in late 2001 with a lifetime pension and guaranteed health coverage for himself and Carolyn. “It was looking great,” recalled Chuck. “The first retirement check I got was $2,700 a month. And that’s a nice pension.” Health insurance, he said, was running about $200 a month.

But the Kurilko’s retirement security didn’t last long. Through bankruptcy, LTV had sold off its productive assets and jettisoned its unwanted and underfunded liabilities, like pension and health benefits. LTV’s pensions were taken over by the Pension Benefit Guaranty Corporation (the PBGC), the federal corporation that insures private pensions. PBGC uses a reduced payout formula for retirees under 65, and retirees like Chuck were among the hardest hit. He saw his monthly pension checks slashed by $1,000, and his monthly health insurance payment skyrocket to $1,300. The bankruptcy proceedings that “saved” LTV cost the Kurilkos about $25,000 a year, a devastating turnabout in fortunes. By the time I arrived, the Kurilkos’ savings were down to about $13,000. Every month was a struggle to keep from digging the financial hole deeper.

I expected anger and dismay. What I found was more troubling. Good people that had been justifiably proud of what they’d accomplished through a lifetime of hard work — in the mill, in their community and at home — had lost control of their financial future, and with that their dignity. “We just shouldn’t have to live like this,” Carolyn kept saying, shaking her head as if it was all just a bad dream.

A couple months later, Carolyn’s nightmare got worse. She called me in early April to tell me that Chuck had died from a massive heart attack. We talked about Chuck and about his funeral, and after we talked, I began to think about how Chuck’s passing had come to represent the passing of an era when a lifetime of hard work, at most big companies, was rewarded with retirement security and with dignity. I also thought about Carolyn and the financial predicament she suddenly faced alone. But it wasn’t until later that I came to understand that Carolyn too represents a troubling national trend — the growing number of women facing severe financial difficulty in retirement.

One huge problem in retirement for women like Carolyn Kurilko is longevity. On average, women live longer than men, and nearly a third of all women who reach 65 will live to at least 90. “Chances are the husband will die and the wife will live on and on and on, and she will be the poorest she’s ever been in her whole life,” explains Notre Dame labor economist Teresa Ghilarducci.

The story of LTV and Wilbur Ross is a microcosm of the American class struggle—or the lack thereof. You have labor bureaucrats like Leo Gerard making common cause with a scumbag like Ross in the same way that UAW president Dennis Williams has gone along with deals that led to a two-tiered pay system and reduced benefits so as to “save jobs”. If there was a labor movement instead of what we have now, both Obama and Trump would have been put on the defensive.

The problem, of course, is that the bosses can exercise leverage on the workers by threatening to pick up and move to another country. The threat of runaway shops is what helped Trump get elected even if his solution a la Ross is to make an offer that workers can’t refuse.

Global competition puts pressures on workers everywhere to accept less. This is what “globalization” has accomplished. It cheapens the price of labor and commodities simultaneously. Indian steel mills supply commodities at a price far below those of their competitors in more advanced capitalist countries. Ross cashed in on globalization in 2005 himself: He sold his steel company to an Indian company Lakshmi Mittal for $4.5 billion in 2005, making 12 ½ times on his initial investment.

Mittal is now the far largest steel producer in the world. A lot of Trump’s animosity toward China has to do with its ability to produce steel even more cheaply than Mittal. Like Ross, Mittal screws workers out of their pensions and fires them when they no longer serve the bottom line.

What is happening now is a race to the bottom. Trump is incapable of reversing this trend since it is not susceptible to policy solutions. It is tantamount to King Canute commanding the tide to stop. We are in the throes of capitalism’s decay. I think Trotsky was misguided in the way he went about building a Fourth International but each time I return to his writings, I remained impressed by his ability to size up the political conditions of his epoch in a work like the Transitional Program:

All talk to the effect that historical conditions have not yet “ripened” for socialism is the product of ignorance or conscious deception. The objective prerequisites for the proletarian revolution have not only “ripened”; they have begun to get somewhat rotten. Without a socialist revolution, in the next historical period at that, a catastrophe threatens the whole culture of mankind. The turn is now to the proletariat, i.e., chiefly to its revolutionary vanguard. The historical crisis of mankind is reduced to the crisis of the revolutionary leadership.

We are not in any position today to construct such a revolutionary leadership but if there is one thing that is clear, it is the need to break with the two-party system that entrusts people like Wilbur Ross, Leo Gerard, Donald Trump and Hillary Clinton to get us out of a deathtrap they created in the first place.

Next Page »

Blog at WordPress.com.