those of borate miners in California, uranium-processing workers in Illinois, and Red Cross workers across six states.88 To be sure, there was worker resistance as well. The strike figures above included groups ranging from food-processing workers in New York State to nurses in Philadelphia and Minneapolis. Even the UAW, desperately on the defensive in the automobile industry, struck against Bell Helicopter for twenty-seven days.89 But, as in 1979–82, the employers had the upper hand.
Productivity was once again up significantly. In 2009, productivity took several leaps, the biggest being in the second quarter when it grew by 8.4 percent for nonfarm business, as employers shed workers while production rose in the second half of that year. In manufacturing, the third quarter of 2009 brought an unprecedented 16.9 percent jump in productivity. Unit labor costs fell rapidly in manufacturing from mid-2009 through the first three quarters of 2010.90 Looking at these productivity leaps in late 2009, Businessweek’s economic editor explained them as follows: “So people working shorter hours had to do the same work as before, or more. People who kept their jobs had to pick up work of ex-colleagues. Many workers probably put in extra hours that weren’t counted in the statistics in order to get all their work done.”91 He went on to note that this produced the “largest decrease [in labor costs] since the series began in 1948.” While such huge productivity spikes cannot be sustained, it is clear that capital continues to push for the combination of wage restraint and increased relative surplus value as their means of recovery.
In 2011, the attack on working-class living standards moved on to the public sector in accelerated form as Republican governors in several states, responding to the nervousness of state bondholders and the continued desire of businesses and the wealthy for tax cuts, attempted to deprive state and local government employees of collective bargaining rights altogether. The fiscal squeeze found forty-six or fifty states in deficits by 2009, in large part because of cuts on business taxes. The proportion of state revenues drawn from corporate taxes had fallen from 9.7 percent in 1980 to 6.7 percent in 2006. Public workers had faced concessions and staff reductions for some time. By 2009 thirty-four states had begun reducing their workforces.92
This attack had already accelerated in 2004 in Indiana, where Governor Mitch Daniels repealed collective bargaining rights for state workers. The consequence was that union membership among state workers fell from 16,408 in 2005 to 1,490 in 2011. No doubt inspired by events in Indiana, right-wing governors in Wisconsin, Ohio, and Michigan pushed legislation that would abolish or severely limit bargaining for public workers.93 This brought an enormous, largely unexpected reaction in these states, above all in Wisconsin. There the state Capitol Building was occupied for two weeks, with thousands in the street through the week; weekend demonstrations drew seventy thousand union members and supporters in the first week and a hundred thousand in the second. Polls showed that a majority of people across the country opposed depriving workers of bargaining rights, and most of these laws are under challenge in the courts. Nevertheless, Democratic legislators in several states soon joined those trying to repeal the bargaining rights of public workers.94
Underlying the attack on public workers is an effort to reduce the cost of “nonproductive,” though necessary, labor—that is, labor that for the most part does not produce surplus value and, in this case, must be paid out of it in the form of taxation. It is simply another way of accomplishing what direct austerity programs are attempting to do to public workers and the poor in Southern Europe.95 Interestingly, Marx noted that the huge increases in productivity brought about by large-scale industry in the nineteenth century allowed for “a larger and larger part of the working class to be employed unproductively,” mostly as domestic servants in his day.96 Clearly, the problems of accumulation are such that even substantial productivity growth no longer allows such a luxury from capital’s point of view.
With productivity rising, corporate profits reached $1.7 trillion in the third quarter of 2010, the highest amount ever recorded by the government, and an increase of 28 percent over a year before. The biggest part of this increase came from domestic profits and the lion’s share of those from nonfinancial corporations, whose profits grew by 40 percent in that period.97 Certainly, labor, once again, will have played an involuntary role in whatever recovery should follow the Great Recession.
Conclusion
A number of conclusions flow from what has been argued above. The first is that the historic link between rising productivity and wages, so valued by Keynesian and institutional labor economists, and so central to collective bargaining theory, has been broken. The liberal economists at the union-backed Economic Policy Institute called the failure of wages to rise when productivity was growing rapidly in 2000–06 “extraordinary.”98 Actually, it had become the norm. In Marxist terms, the most favorable condition for workers, “reproduction on an expanded scale, i.e., accumulation,” had been stood on its head. The conditions for accumulation have become falling real wages linked to increases in productivity—a downward trend in the value of labor power. It is not in the realm of theory that the productivity-wage link was broken, of course, but in that of class struggle—an altogether too “one-sided class war.” The combination of capital’s industrial and neoliberal strategies and practices on the favorable terrain of global restructuring and labor’s weak reaction and largely misplaced strategic choices and practices have broken the link. The “secret” of the 1982 recovery and whatever subsequent expansion follows the Great Recession is found largely in this broken link.
The evidence for this lies not only in the trends in the United States discussed in this chapter, but on a world scale. Labor’s share of income fell not only in the United States but also in the seventeen leading Organisation for Economic Co-operation and Development (OECD) countries, where it dropped from 75 percent in the mid-1970s to 66 percent by 2005.99 Nor was this redistribution of surplus value limited to the developed economies. The International Labour Office (ILO), in its 2008–09 Global Wage Report, argues that real wages have fallen as a share of world GDP at least since 1995 in pretty much the same way as in the United States. Waged labor, they point out, now makes up half the world’s economically active population. That is, this half is now employed for the most part by capital even if many of these jobs are contingent. The world economy, they calculate, grew by 3.3 percent from 1995 to 2007, while wages grew by only 1.9 percent. As a result, labor’s share of income fell, “an indication that increases in productivity have failed to translate fully into higher wages.”100 Capital has succeeded in restraining wages while simultaneously extracting productivity increases on a world scale, thus lowering the value of labor power across the planet. Much of this was made possible by the opening of vast new low-wage areas of the world to investment after 1990.
With a geographic expansion on the scale of the 1990s no longer possible and the incentive for major technological breakthroughs blunted by declining relative labor costs, it is reasonable to assume that capital will continue to be wedded to this strategy for profitability at least until its limits are reached in the physical degradation or rebellion of the working class. Thus, for the foreseeable future, “the conditions which are most favorable to the workers” will not emerge on their own or as a result of the behavior of capital.
The second conclusion has to do with the organized working class itself. Obviously, the strategies of retreat that have characterized the decisions and practices of most US union leaders since the late 1970s have failed. Chief among these were labor-management cooperation or “partnership,” the near-abandonment of the strike as a weapon, the mergers so common in the 1990s, and bureaucratic reorganization along the lines of the SEIU. Even the new organizing tactics based on employer “neutrality” have proved inadequate in a period when most employers who do not already have a union presence are disinclined to remain “neutral.”101 Simple changes in the leadership and even the structures of US unions, as badly needed as they are, won’t be enough if working-class organization is to spread and dig roots in a changed industrial terrain. The workplace, the central battleground over productivity, will be the key to sustained resistance and mobilization. At the same time, more attention needs to be given to the sort of political and social upheaval that has recently spread around the world, from Bolivia to Mexico to America’s
