Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Support Our Annual Fund Drive! We only shake you down once a year, but when we do we really mean it. It costs a lot to keep the site afloat, and our growing audience, well over TWO million unique viewers a month, eats up a lot of bandwidth — and bandwidth isn’t free. We aren’t supported by corporate donors, advertisers or big foundations. We survive solely on your support.
FacebookTwitterGoogle+RedditEmail

The One-Sided Class War

by LEE SUSTAR

Three years into an economic recovery, workers are losing ground–so much so that the mainstream media are finally having to take notice.

Once inflation is taken into account, compensation for nonsupervisory workers in the private sector–about 80 percent of the workforce–dropped 0.4 percent in 2004. Analyses in the New York Times and Los Angeles Times blamed the usual suspects: globalization and the outsourcing of jobs overseas, a slack labor market and weak unionization rates. (Source: State of Working America, 2004-05)

These developments are, in fact, symptoms of the underlying cause: a systematic shift of wealth from labor to capital through free-market policies–known internationally as “neoliberalism”–that began more than three decades ago. Today’s economic picture–in which profits are taking a greater share of the national income in an economic recovery than at any time since the Second World War–reflects the consolidation of the neoliberal economic order internationally.

The economic reality for U.S. workers today bears increasing similarities to their counterparts in less developed countries: a small and shrinking sector of better-paid workers amid a sea of low-paid and often temporary labor, a country where unions are weak and any economic gains for workers are under constant threat, and where the state has abandoned almost all pretence of a social safety net.

That, said Sylvia Allegretto of the liberal Economic Policy Institute (EPI), is the real character of what George W. Bush calls “the ownership society.”

Until the 1970s, “corporations provided health care and pensions, and the government was there when they failed,” she told me. “Today, fewer employers provide health care, and there is less of a government safety net. It is a huge shifting of risks from big business and the government onto workers’ backs. An ownership society? To own something, you have to be able to afford it.”

Allegretto, a co-author of the EPI’s comprehensive book The State of Working America 2004/2005, pointed out that with workers’ wages stagnant, the three-year-old economic recovery from the 2001 recession has leaned heavily on mortgage refinancing and middle-class consumption. “One writer called it the Nieman Marcus recovery,” she said. “With interest rates rising, you will see the refinance boom continue to fall off, and you can’t get around the high cost of health care costs and the high oil and gas prices. If this continues, it will put a damper on the economy.”

The pattern of wage stagnation and decline has worsened the precarious situation of U.S. workers. While overall real pay last declined in the early 1990s, hourly wages either declined or stagnated throughout the period between 1973 and 1995. Beginning in the mid-1990s, tight labor markets finally pushed up pay, particularly among low-wage workers. Unions were able to reverse some of the downward trends–workers went on strike at UPS in 1997 and General Motors to win more full-time jobs; at Bell Atlantic/Verizon, workers struck twice to win better pay and benefits.

But the recession of 2001 and the weak recovery since unraveled many of these gains. Although real wages continued to grow slowly during the recession, the economy shed large numbers of jobs, particularly in manufacturing, which saw 41 straight months of employment decline.

At the same time, productivity gains that emerged in the late 1990s continued to accelerate, which meant that fewer workers could produce more. According to the Bureau of Labor Statistics, the 4.3 percent average annual increase in productivity for 2001 to 2004 was last matched in 1948 to 1951.

This big spike in output per hour occurred despite the sharp drop in capital investment during the recession. Technology from Corporate America’s late 1990s spending spree undoubtedly played some role in the productivity increase, but old-fashioned speedup is also indisputably responsible. In other words, Corporate America has intensified its one-sided class war–and made major gains.

The result is that while the U.S. economy in 2004 generated 2.2 million jobs, that total is 1.4 million less than expected, based on averages from previous economic recoveries. About 20 percent of the jobless today are among the long-term unemployed–people who have been 27 weeks without a job–“an unprecedented development in the post-[Second World War] period,” according to the EPI.

This poor jobs picture persisted even as U.S. Gross Domestic Product (GDP) grew at a brisk 4.3 percent. While this is less than half of China’s booming growth, it far outpaced Germany’s GDP increase of 1.6 percent and is ahead of Japan’s 4 percent gain.
The numbers add up to this conclusion: The success of the U.S. economy has been decoupled from improvements in the lives of U.S. workers. The idea that increases in productivity will automatically lead to wage increases and improvements in living standards–the assumption of liberal Keynesian economists and union leaders alike–has been shattered.

What matters is class struggle. As the socialist economist Michael Yates put it in a recent article on the U.S. working class in Monthly Review, “rebuilding the power of the U.S. working class is the only thing which can give workers any sense of hope that the future will be in any way better than the past 30 years.”

The challenges in doing this are profound. The lingering labor surplus, along with the productivity boom, gave employers a powerful weapon, even as the economy picked up steam. Unions at major corporate employers in the airline, steel and auto industries made big concessions on wages and benefits, adding to the economic downdraft. Capital’s dominant position in the balance of class forces, which provoked some resistance in the late 1990s, has been restored–and then some.

The latest wage statistics underline the point: It’s no longer true–if it ever was–that a rising economic tide will lift all boats. It’s class war from above that’s allowed America’s rulers to accumulate their vast power–and it will require class war from below for workers to make any significant gains.

LEE SUSTAR is a regular contributor to CounterPunch and the Socialist Worker. He can be reached at: lsustar@ameritech.net

LEE SUSTAR is the labor editor of Socialist Worker

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine

minimag-edit

September 29, 2016
Robert Fisk
The Butcher of Qana: Shimon Peres Was No Peacemaker
James Rose
Politics in the Echo Chamber: How Trump Becomes President
Russell Mokhiber
The Corporate Vice Grip on the Presidential Debates
Daniel Kato
Rethinking the Race over Race: What Clinton Should do Now About ‘Super-Predators’
Peter Certo
Clinton’s Awkward Stumbles on Trade
Fran Shor
Demonizing the Green Party Vote
Rev. William Alberts
Trump’s Road Rage to the White House
Luke O'Brien
Because We Couldn’t Have Sanders, You’ll Get Trump
Michael J. Sainato
How the Payday Loan Industry is Obstructing Reform
Robert Fantina
You Can’t Have War Without Racism
Gregory Barrett
Bad Theater at the United Nations (Starring Kerry, Power, and Obama
James A Haught
The Long, Long Journey to Female Equality
Thomas Knapp
US Military Aid: Thai-ed to Torture
Jack Smith
Must They be Enemies? Russia, Putin and the US
Gilbert Mercier
Clinton vs Trump: Lesser of Two Evils or the Devil You Know
Tom H. Hastings
Manifesting the Worst Old Norms
George Ella Lyons
This Just in From Rancho Politico
September 28, 2016
Eric Draitser
Stop Trump! Stop Clinton!! Stop the Madness (and Let Me Get Off)!
Ted Rall
The Thrilla at Hofstra: How Trump Won the Debate
Robert Fisk
Cliché and Banality at the Debates: Trump and Clinton on the Middle East
Patrick Cockburn
Cracks in the Kingdom: Saudi Arabia Rocked by Financial Strains
Lowell Flanders
Donald Trump, Islamophobia and Immigrants
Shane Burley
Defining the Alt Right and the New American Fascism
Jan Oberg
Ukraine as the Border of NATO Expansion
Ramzy Baroud
Ban Ki-Moon’s Legacy in Palestine: Failure in Words and Deeds
David Swanson
How We Could End the Permanent War State
Sam Husseini
Debate Night’s Biggest Lie Was Told by Lester Holt
Laura Carlsen
Ayotzinapa’s Message to the World: Organize!
Binoy Kampmark
The Triumph of Momentum: Re-Electing Jeremy Corbyn
David Macaray
When the Saints Go Marching In
Seth Oelbaum
All Black Lives Will Never Matter for Clinton and Trump
Adam Parsons
Standing in Solidarity for a Humanity Without Borders
Cesar Chelala
The Trump Bubble
September 27, 2016
Louisa Willcox
The Tribal Fight for Nature: From the Grizzly to the Black Snake of the Dakota Pipeline
Paul Street
The Roots are in the System: Charlotte and Beyond
Jeffrey St. Clair
Idiot Winds at Hofstra: Notes on the Not-So-Great Debate
Mark Harris
Clinton, Trump, and the Death of Idealism
Mike Whitney
Putin Ups the Ante: Ceasefire Sabotage Triggers Major Offensive in Aleppo
Anthony DiMaggio
The Debates as Democratic Façade: Voter “Rationality” in American Elections
Binoy Kampmark
Punishing the Punished: the Torments of Chelsea Manning
Paul Buhle
Why “Snowden” is Important (or How Kafka Foresaw the Juggernaut State)
Jack Rasmus
Hillary’s Ghosts
Brian Cloughley
Billions Down the Afghan Drain
Lawrence Davidson
True Believers and the U.S. Election
Matt Peppe
Taking a Knee: Resisting Enforced Patriotism
FacebookTwitterGoogle+RedditEmail
[i]
[i]
[i]
[i]