The Situation in the U.S.

Jul 30, 1986

I. After more than three years of economic recovery in the United States, the bourgeoisie continues to attack the working class and other laboring and poor layers of the population. In fact, these attacks have become more generalized and are probably more vicious than during the preceding years of recession. The hallmark of this recovery, to put it differently, is the fact that it is essentially one of profits, without an equivalent development of production which could lead to a more generalized improvement of conditions for wide layers of the population.

Profits overall rose ten per cent in 1985 on an operating basis. This is a substantial increase, especially given that the GNP rose only 2.2 per cent, even if the rate of increase in profits is less than the previous year. General Motors and Chrysler had the second most profitable year in their histories, after 1984. Banks continued to post double digit profit rates for the third year in a row.

Production, however, posted only a very small recovery. And since mid-1984 industrial output has not increased in real terms. This stagnation of production continues a long term trend: the share of manufacturing in the GNP stood at only 21 per cent last year, down from 25 per cent in the late 1970s and from a peak of 30 per cent in the early 1950s.

II. The necessary implication of this type of recovery is that the improvement in profits is being paid for directly at the expense of the standard of living of the working and laboring classes. The bourgeoisie has succeeded so far in protecting itself by imposing, through various means, an increasingly greater burden on others.

The situation of the working class has deteriorated noticeably. The real income level of the stable hourly work force has continued to decline. The before-tax average weekly wage in 1977 dollars has gone from $198.35 in 1973 down to $171.60 in 1985. If tax considerations were added, the drop would be even greater.

There has been a shift away from the relatively higher paid jobs in manufacturing (average wage of $9.42 per hour), to the lower paid ones in service ($7.82) and retail ($5.99). There are 1.7 million fewer manufacturing jobs today than there were in 1979. Over 45 per cent of the workers on layoff who found new jobs had to take a pay cut with their new jobs.

The number of full-time working poor increases yearly. There are now approximately ten million workers earning the minimum wage of $3.35 per hour. At a time when someone supporting a family of four would need a wage of at least $5.28 per hour on a full-time basis just to meet the government’s own official poverty level, approximately thirty per cent of the labor force earns less than this amount.

The consequence of all this is that, over the past period, there has been an increasing polarization, with the bourgeoisie and those attached to it becoming enriched, while the working class and other layers around it face increasing impoverishment.

The gap between those at the top and those at the bottom of the economy is monstrous and growing wider. The top 400 richest individuals in this country have a personal wealth equal to that of 54 million at the bottom. Household income figures give a measure of the way this gap is widening. For the richest 20 per cent of families, real disposable family income went up by almost nine per cent last year. For the next 20 per cent, the increase was three per cent. However, for the poorest 20 per cent, real disposable family income dropped eight per cent. The next poorest 20 per cent lost two per cent in income.

III. The increase in profits has come in large measure from the drive for concessions which each individual capitalist has been carrying out at the workplace, a drive which goes back as far as 1978-79.

If the capitalists continue to win their demands for concessions, it is because the working class has not found the way to carry on a fight sufficient to defend itself. This isn’t to say there haven’t been some militant fights in the recent period. We have seen such strikes at Phelps Dodge, A-P Parts, Watsonville, Bath Shipyard, Wheeling-Pitt and at Hormel. But these strikes, even when they have been militant and determined, nonetheless have remained isolated, without any generalization. The overall trend since 1977 has been towards fewer and fewer fights. The number of strikes in the U.S. involving 1000 or more workers totaled only 54 in 1985, the lowest on record in the 38 years such statistics have been kept. This compares to figures of 62 in 1984; 81 in 1983; 96 in 1982; 145 in 1981; 187 in 1980; and 235 in 1979. In 1974, before the working class had really begun to feel the effects of the crisis, the number of strikes was 424.

IV. The consequences at the workplace of this one-sided class struggle have been drastic. Over three million union workers have taken explicit wage cuts to date. This represents one out of every six unionized workers. Additionally, nominal wage increases negotiated in collective bargaining agreements in 1985 were the lowest on record. The wage increase, before inflation, was 2.3 per cent for the first year and 2.7 per cent over the life of the contract. After inflation, these contracts amount to a real wage cut.

Direct wage cuts tell only a small part of the story. The number of union members covered by COLA’s declined to below 57 per cent, and the average share of inflation adjustment dropped from 2/3 to 1/2 of the rise in prices. Many contracts stopped rolling inflation adjustments into base wages, and some even diverted COLA money to cover fringes. Wage increases were often paid by lump sum, and thus not rolled into base wages for the payment of benefits. In the first six months of 1985, medical insurance benefits were cut in one form or another in 46 per cent of the negotiated contracts. At the end of 1984, eight per cent of all contracts contained two-tier and even three-tier agreements; they continued to spread in 1985. Obviously, the situation for many workers not covered contractually is even worse, even if the decrease is not as severe proportionately, given that their base wages are lower and most do not have COLA and other such provisions.

The capitalists have also protected their profits through a tremendous speed-up in the rate of production. One indication of the extent of this is production in basic steel which had increased 30 per cent from the recession level of 1981-82 by the end of 1985 while the number of workers on the job decreased in this same time period by ten per cent. To take another example, the average number of vehicles produced per production worker at Chrysler in 1982 was 15.1; already by the end of 1984 the figure had jumped to 25.2 vehicles per worker. Certainly a part of these changes are accounted for by varying amounts of overtime and layoff periods in the years involved, by downsizing and by outsourcing for parts. A small proportion is also due to new equipment. But above all else, the changes are due to a fierce speed-up campaign.

This speed-up has numerous consequences. For those workers who remain in the plant, there is an aggravated deterioration of the human body and increased risks to health and safety, in part due to speed-up. In one year, injuries mounted to 5.4 million, while death on the job increased 21 per cent from 1983 to 1984, the last year statistics are available for at this point. Three thousand seven hundred and forty workers lost their lives.

The speed-up also translates into a higher unemployment rate, officially still above seven per cent after more than three years of recovery. That is, almost eight and one half million people officially out of work; another million and a half “discouraged” who no longer are counted as unemployed; another five and a half million who are forced to work part time. When everything is totaled up, the figures of those unemployed or underemployed come to fifteen and one half million workers – a significant proportion of whom have been put out into the street by the speed-up.

V. Devastating attacks have also been carried out directly by the bourgeoisie against other laboring people, especially the farmers. In the last five years, over 150,000 farm families were driven off their land. Those medium-sized farmers who remain face increasing difficulties, with the threat of bankruptcy hanging over them. The small farmers for the most part have either lost their farms or been forced to work outside the farm to keep their land. Total farm debt is now over 209 billion dollars, with the debt/asset ratio for farmers at its highest point since the Depression.

There have been some protests against foreclosures, and some of these were very militant, even desperate. Nonetheless, few farmers have been able to prevent the banks from foreclosing. The amplitude of the fights on the farms has been limited, to the extent that we can judge from here. Beyond that, without a fight of the working class, the farmers are much more vulnerable to the attacks which come from the increasing domination of finance capital over the agricultural sector.

VI. Today the bourgeoisie feels relatively free to use its government to take an ever increasing share of the social wealth for itself. Under the cover of claiming to be reducing government spending, the Carter and then the Reagan administrations have been shifting that spending more in the direction of the bourgeoisie. Gramm-Rudman and other calls to balance the budget in fact are directed essentially against social spending, while expenditures that subsidize the bourgeoisie continue to mount. Military spending, which has increased over 50 per cent in the last five years to a total of over 300 billion dollars, is the principal – but not only – means of subsidy. Despite all the rhetoric, the federal budget continues to increase in size, rising 11.8 per cent in real terms in 1985 alone. The federal government deficit continues to balloon right along with these expenditures: tripling from 75 billion dollars in 1981 to 225 billion in 1985.

The ever-mounting government debt, which represents today’s increased subsidies to the bourgeoisie, will require increasing interest payments tomorrow. Already interest is the third largest item in the federal budget at nearly 130 billion dollars a year. These sums, which go primarily to the banks and insurance companies which hold most of the debt securities, must also be paid by someone. The bourgeoisie is taking advantage of the fact that it faces no opposition today to establish a legacy for the next generation as well. In the 1960s, even when the U.S. government was fully engaged in the war in Viet Nam, when the necessity to pay the military bill was overwhelming, the government, nonetheless, did not feel able to impose this cost on the population, at least not directly. Confronting a real social struggle in this country – most importantly, that of the black population which, by the mid-1960s, was in open rebellion in the streets; but also strikes waged by the working class – the government decided that there needed to be butter as well as guns, despite the difficulties that choice presented as far as encouraging inflation. But we don’t sees such a struggle today.

VII. The lack of any social struggle explains in large part why the Democratic Party appears today as it does: openly as a carbon copy of the other bourgeois party, the Republican Party. In periods of social struggle, the Democratic Party has generally pretended to champion the causes of protest, using a different rhetoric, claiming to be the friend of labor or of the poor or of black people.

Today, in the absence of any social struggle, the Democrats feel no need to distinguish themselves from the Republicans. They are at pains to take their distance from the unions or black organizations, saying they do not want to be beholden to what they call “special interest groups” – as if they ever had been beholden to anyone other than the special interests of the bourgeoisie. On the level of rhetoric as well as deeds, the two bourgeois parties compete with each other on the same ground today.

VIII. The lack of any social struggle also explains in part the still growing conservatism in questions such as the family, religion and patriotism. Certainly this conservative ideology, which often has its biggest hearing from sections of the petty bourgeoisie, has been promoted by the government to justify its attacks on the population. Women’s rights are under new attack, exemplified by the crusade against the right to abortion. The bombing of abortion clinics has been all but formally endorsed by Reagan. The black population seeing the gains of the 1960s slowly pushed back, begins to confront more open expressions of racism.

The general conservative tone weighs on the whole population, including the working class, the more so that the masses are not engaged in fighting for their own interests. When the Philadelphia cops bombed the MOVE house there was little or no response from the black population. We couldn’t imagine such a massacre being accepted, even defended, ten years ago as it was in 1985, by significant sections of the black population.

IX. The students reflect this growing conservatism also. Overall, there is a pervasive self-indulgent cynicism on college campuses today. At the same time, there is a layer of students in the intellectual milieus, as is generally the case, who are critical of society and looking for a way to respond. In the last year we have seen some open expression of protest on a number of campuses. Nonetheless, the number of protests remains limited to date and their depth remains shallow in comparison to other periods such as the 1960s, or even perhaps the late 1970s, with its flurry of anti-nuclear protests. Whether or not the protests will deepen remains to be seen. In any case, there is definitely a willingness on the part of some students to consider the revolutionary viewpoint.

X. Just ten or 15 years ago, most workers expected to see an improvement in their lives. It seemed reasonable to them to expect they would eventually have their own home, live in a relatively safe neighborhood and be able to provide a better education for their children than they themselves had had. The job was wearing and tedious, demanding even, but at least there would be some material comfort and some improvements. Today, however, such expectations have been battered down.

The ability to purchase a new home, for example, is now out of the reach of most workers. The basic monthly payment on the average-period home with a 30-year mortgage was estimated in mid-1985 to be $768 per month or $9216 per year. Less than a quarter of all households have sufficient income to qualify for this level of financing. For those who have attempted, mortgage delinquencies are at an all-time high of 9.2 million homeowners.

The opportunity for an education is declining as well. The cost of going to college is shooting up astronomically, at the same time the government is cutting back on educational subsidies. The federal government is threatening to cut Pell grants, for example, which would mean another 3/4 million students will lose part or even all of their aid. College education is more and more becoming the preserve of the upper levels of the petty bourgeoisie and of the bourgeoisie. For a layer out of the working class, the possibility of obtaining fuller education is dissolving, at the very same time that youth are being fed the story of the need to gain new skills for the changing job market.

In fact, for the working class, it is even a problem to finish high school. The national dropout rate from high school is 30 per cent, which means that for the working class youth in the major cities it is much higher. The rate in some New York City districts is as high as 70 per cent.

Crime has become an ever-present threat. It is one of the resultants of a deteriorating life in the working class. Youth, the generation which has had neither the income nor the expectation of a job, hang in the streets to prey off others. The likelihood of becoming a victim of crime remains very high in the United States. Current statistics show that nearly four out of every 100 people will be the victim of some violent crime; one out of ten will have their homes burglarized. These figures are for the U.S. as a whole. The figures are actually much higher in urban areas, and twice as high in cities compared to suburbs. To give a sense of what this means, if the murder rate continues at its current pace, someone living in the city of Detroit all their life has a one in 14 chance of being murdered.

There are many raw nerves in the working class today. Whatever illusions there may have been coming out of the long post-war expansion of the U.S. economy, whatever expectations there were of having a comfortable standard of living and seeing an improvement in one’s own lifetime are today shattered by a brutal reality. Today’s new generation is living worse off than the last, and it is obvious and widely understood. A generation ago, many working class parents hoped that their children would not have to follow in their path, ending up with a factory job. Today, working class parents hope their children will be lucky enough to have the chance to take a factory job, to escape spending their working lives at McDonald’s.

XI. If there haven’t been fights by the working class, it is certainly not because there is satisfaction. Far from it. There is a great dissatisfaction, but one which up to this point has not found expression in a fight back against the attacks being carried out against the working class.

The recent vote for the candidates of Lyndon LaRouche are indicative of the bitterness and anger among layers of the population, including some workers and farmers. LaRouche provides false solutions, but he speaks to the concerns of workers, farmers and the poor. The votes his candidates receive at least partially reflect that there are some in these social layers who are tired of the pablum being served up by the traditional politicians, and who are looking for radical solutions, even if it is only on the level of a ballot and not of action. Unfortunately, the left has no hearing in these social layers sufficient to give another direction to those searching for radical answers. The extreme right obviously will be given the material and financial means to appear widely, with media coverage, including TV. If the extreme left is to compete, it will only be because it finds the way to implant itself, to develop roots and influence in those layers of the population.

We can see the workers’ desire for a way out being expressed vis-a-vis the Hormel strike. Across the country, workers are aware of this strike, a strike of only 1500 workers in a little town in the upper Midwest that very few had ever heard of before. This reflects not only the determined fight by the Hormel workers themselves and their conscious attempts to extend an awareness and solidarity for their fight, but also the fact that other workers want to see someone, somewhere, stand up and show that something else is possible besides the continuing acceptance of the concessionary drive and the continuing deterioration of life.

Perhaps this coming year will see the workers continue to accept the attacks, expressing more wearing pessimism. On the other hand, we could see a reversal, and a very sudden one, in the current situation. The sudden development of a wide-spread social movement would not be unusual in American history. The labor movement in the 1930s, the black movement in the 1950s and the 1960s attest to this. If there is a determined fight that shows other possibilities, if there is a proof that a fight can be made, a much wider struggle could be set in motion throughout the working class.