The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Bosses Continue Attacks on the Working Class and Reap Massive Profits

Apr 28, 2014

The following remarks are from a Spark presentation in Los Angeles in March 2014.

Five years after the economic recovery officially began, almost 30 million people, or more than 20 percent of the working age population, is either unemployed or working part-time, while looking for full time work. And things are not getting better. Over the last year, the federal government cut 68,400 jobs, and the Postal Service cut almost another 200,000 jobs, or more than 25 percent of all jobs from its pre-recession level. State governments around the country cut another 150,000 jobs. And local governments cut 600,000 jobs, including over a quarter of a million jobs in public education.

As for the private sector, mass layoffs are continuing there too. Over the last couple of months, giant retailers, including Radio Shack, Staples, WalMart, Macy’s and Penney’s all announced big cutbacks that will cost thousands more jobs at each company.

This unending massive unemployment is not some natural catastrophe, completely out of the control of human beings. It is a catastrophe brought on by the capitalist drive for profit. In the midst of an unemployment disaster, corporate profits have never been higher, running at an annual rate of nearly two trillion dollars – after taxes. This is the highest share of GDP for profit since 1947, when record-keeping began.

What Did They Do with Their Profit?

The corporations passed their profits on to their largest shareholders. Last year, dividends hit a new peak, close to 900 billion dollars. Corporations also bought back shares of their own stock, thus handing billions more to their biggest stockholders. When the number of shares falls, the value of each share goes up. In 2013 the 30 companies that comprise the Dow Jones Industrial Average authorized 211 billion dollars in stock buybacks.

Even after all this money was lavished on stockholders, non-financial companies in the U.S. were still sitting on trillions of dollars in cash. Not to mention the trillions more the banks hold as the result of what they have taken off the top of profits from production.

But companies aren’t investing their profits to expand; they are squeezing more production out of the same old plants and equipment. Factories that used to have one or two shifts are now running flat out: three shifts, 24-hours a day, seven days a week, resulting in hellish hours for the workforce, much greater health and safety hazards, worse working conditions. Airlines cut routes, shrink capacity, fly their planes completely full and charge much higher fares, along with added fees. Electric utilities don’t replace old equipment or install extra capacity for usage peaks, resulting in regular blackouts, explosions and fires.

Capital’s drive to extract greater profit for the benefit of a few is laying waste to all of society, destroying the infrastructure, smashing the standard of living of the working class and other parts of the population.

25 “Good” Years – At What Price?

Some liberal economist pretend that capitalism can be reformed if the economy is regulated. They say that the quarter century between 1947 and 1974 illustrates that it is possible for capitalism to grow and raise everyone’s standard of living. They quote President John F. Kennedy’s famous dictum that the economy’s rising tide lifts all boats.

But what really made those 25 years of growth possible? First of all, they were making up for the preceding two decades of destruction and misery. Between the 1930s Great Depression, the worst, most devastating depression in history, and World War II, the most bloody and destructive war in world history, so many goods, so many factories and equipment were destroyed, it finally made it very profitable for capitalists to invest in new factories and equipment and expand production.

Furthermore, the terrible destruction and pillage by U.S. imperial domination over the underdeveloped parts of the world allowed U.S. companies to extract super profits from Asia, Africa and Latin America. It also led to the wars in Vietnam, Afghanistan, Iraq and dozens of other countries.

As long as the big and easy profits poured in, the U.S. capitalists let a few crumbs fall from their abundant table. They paid for labor peace, especially faced with a unionized working class that was ready to go on strike. The capitalists agreed to increase wages and to add fringe benefits – slowly.

Of course, the capitalists didn’t do this for everyone. Not by a long shot. A big part of the workforce remained condemned to unemployment in the reserve army of those with either no jobs or very precarious jobs – a position historically reserved for black people in the country. This was the capitalists’ method to hold back wage increases for everyone.

But black people’s massive social struggles changed that. Those struggles, which culminated with actual uprisings in cities throughout the 1960s, pushed the U.S. government to expand its safety net and income maintenance programs for the poor, the infirm, the elderly, the blind, those with mental disabilities and the unemployed. Taken together, these programs had a large impact on the whole workforce. Economists estimated that they reduced the total hours worked by all workers by 7%, even while the standard of living went up rapidly.

The Gains Came to a Screeching Halt

By the late 1960s, the rate of profit for the capitalist class had begun to drop. In response, the capitalists slowed investment, cut hiring, and let unemployment grow. This led to a slowdown in the growth of consumer demand, which led the capitalists to cut production and to invest even less.

Our jobs were supposed to have gone overseas, or else they were eliminated by computers and robots.

It’s a fairy tale. The loss of five million manufacturing jobs over the last four decades is not due to a drop in manufacturing production. Manufacturing production in the U.S. didn’t fall. On the contrary, it more than doubled. Workers were robbed of their jobs right here by companies that pushed fewer workers to produce much more than they did before. Today, 40 percent fewer production workers in this country produce more than twice as much as they did four decades ago.

The reality is that companies threaten to move jobs overseas – in order to extort greater production out of a smaller workforce. They push workers to literally work their way out of their own job.

This ended the period of economic growth and opened up a new period of ever worsening crises, a period that, after almost half a century, is still not over. In the midst of these crises, the capitalists sought to recover their profits by bleeding and impoverishing the rest of society.

This required a massive offensive against the working population.

That offensive was spear-headed by the government, which slashed social programs. These programs had helped to insulate wages and living standards for workers, giving workers who had lost their jobs a choice. Deprived of this income assistance, workers had to accept the low wage jobs they previously had been able to turn down.

Government officials and the capitalist class also opened up a broad offensive against the entire workforce. This began in the mid-1970s, when both big city governments, like New York, and big companies, like Chrysler, threatened bankruptcy and collapse unless their workforces agreed to big sacrifices, including layoffs and wage and benefit givebacks. These big sacrifices, said all the top officials in corporations, the government, the news media, academia and even the unions, were necessary in order to rescue the companies and government agencies from bankruptcy.

But once concessions were imposed at a few places, the dam burst. Companies and government entities alike clamored for big concessions from their workforce just to keep them supposedly competitive with the companies and government entities that were going bankrupt.

When companies returned to profitability, they paid out fat dividends to shareholders and fat bonuses to their executives. Not only didn’t they return something to the workers, they continued to demand new concessions.

Union Response Was Weak

Workers began to express open dissatisfaction. But union officials led only a few, very limited strikes, the kind you can’t win! As these strikes failed, union officials began to push the message that strikes no longer worked and were outdated.

The number of strikes plummeted. And along with that, the portion of the workforce in unions also plummeted. This reflected the declining power of the workers, a decline in the workers’ confidence in their ability to organize and fight in their own interests.

Could the workers have challenged this? Of course they could have. A strike in 1978 in the eastern coal fields saw the miners taking the offensive. They not only closed down union mines, they sent out roving pickets who closed down non-union mines. To try to stop the strikes, the Carter administration invoked the Taft-Hartley Act. They got a court injunction ordering miners back to work. But the miners would not be cowed, and pretty soon a federal judge ruled in exasperation that since the miners were not obeying the injunction, he was revoking it. The miners showed it was possible to push back the capitalists’ demands for sacrifices. But other sectors did not take up the coal miners’ lead. And most union officials began to repeat the lie that’s it’s not possible to fight.

Without workers making a fight, the door was left open for the capitalist class to increasingly rob the working class – and for profit to skyrocket.

The Working Class Can Fight

The whole increase in profit and wealth is not inevitable. It is not a part of the natural order of things. It’s a result of the unfavorable relationship of forces in the class struggle, which is impoverishing the working class today.

Just to stop the backwards march in their standard of living, workers are going to have to fight. If workers are to win, they can’t be satisfied in carrying out the kinds of isolated fights that the unions have led in the past. The workers cannot accept all of the divisions between union and non-union, and between workers in different companies and unions, between active workers and retirees, between “legacy” workers and new hires. These divisions only serve to weaken the workers. The workers must learn to bring as many forces as possible into their fights. Their strength lies in their numbers and their position as the class that makes society run.

Today we cannot defend our own special interests without also fighting to defend the interests of all workers. Instead of fighting each other over who is going to keep their job, workers must fight to end layoffs and job cuts all together. There must be a fight to put the tens of millions of people who don’t have jobs back to work.

Certainly, there is plenty that could be done by all those who don’t have jobs today. Just look at one sector of the economy: education. Look at the condition of the schools, the buildings that are crumbling and filthy because they are not maintained properly. And look at all the overcrowded classrooms. Millions of people could be put to work just in education alone – and all of society would benefit. Imagine how all of society could be improved if the same thing was done in other sectors: open up the hospitals that have been closed, put people back to work to build up the infrastructure — and so much more.

And if workers are told that there is not enough work for everyone, the answer is simple: share out the work, with no loss in pay for anyone. In this way, people don’t have to kill themselves working all the time in order to make a living.

Finally, workers have to protect themselves from rising prices. They have to protect their buying power. So when prices go up, wages immediately go up at the same rate.

In other words, workers have to use their fights to take back from the bourgeoisie’s accumulated profit in order to guarantee a decent standard of living for themselves and for the whole population.