Detroit Bankruptcy and the assault on labor

Remarks  for DSA Youth Conference August 9, 2013          Jack Clark.

This morning’s session focuses on the future of the labor movement.  That’s proper.  For all its flaws and its current weakness, labor remains the largest and most strategically important social movement fighting for ordinary Americans.  It’s difficult to imagine a revitalized liberal-left coalition without a strengthened labor movement.  It is impossible to imagine the development of an American democratic socialist current in the absence of a strong working class movement.

With that said, I am not beginning my presentation with a look at labor itself.  Rather I want to start by looking at attacks on labor and particular one influential attack that uses the crisis in Detroit as the reason to attack unions. .  I’ll take a provocative look at a large question posed by one of labor’s foes and  suggest a large theme that might inform our struggle, and I’ll end by suggesting some specifics on what we want to fight for as allies and participants in labor’s cause.

Since you’re here in Washington, you need to take in some “inside the Beltway” wisdom.  I refer you to the pre-eminent  inside the Beltway purveyor of wisdom, Washington Post columnist, George Will.   In case you missed it, his July 31 column dealt with the city of  Detroit bankruptcy.  .  Will opens his column with this gem:

” In 1860, an uneasy Charles Darwin confided in a letter to a friend: “I had no intention to write atheistically” but “I cannot persuade myself that a beneficent and omnipotent God would have designedly created the Ichneumonidae with the express intention of their feeding within the living bodies of caterpillars.” What appalled him had fascinated entomologist William Kirby (1759-1850): The ichneumon fly inserts an egg in a caterpillar, and the larva hatched from the egg, he said, “gnaws the inside of the caterpillar, and though at last it has devoured almost every part of it except the skin and intestines, carefully all this time avoids injuring the vital organs, as if aware that its own existence depends on that of the insect on which it preys! Government employees’ unions living parasitically on Detroit have been less aware than ichneumon larvae.”

After that charming description of public employees as less intelligent than parasitic larva, Will muses on Detroit’s fate and collective bargaining more broadly:

Detroit’s population, which is 62 percent smaller than in 1950, has contracted less than the United Auto Workers membership, which once was 1.5 million and now is around 390,000. Auto industry executives, who often were invertebrate mediocrities, continually bought labor peace by mortgaging their companies’ futures in surrenders to union demands. Then city officials gave their employees — who have 47 unions, including one for crossing guards — pay scales comparable to those of autoworkers. Thus did private-sector decadence drive public-sector dysfunction — government negotiating with government-employees’ unions that are government organized as an interest group to lobby itself to do what it wants to do: Grow.

 

There’s a lot to unpack there.  Will acknowledges that Detroit has lost nearly two-thirds of its population.  That fact might have something to do with the city’s fiscal distress.  Institutional racism and government policies that reinforced racial exclusion contributed directly to that loss of population.  Like all his colleagues on the Right (and too many in the mainstream center), Will chooses to ignore that history.

He has a different narrative that focuses on greedy unions bringing down first the private sector then spreading the contagion of greed to the public sector.  His narrative is wrong on almost every count.  The competition big US automakers faced in the 1970s and the competition they face today is not primarily from low-wage foreign producers.  Look at the Audi’s, the BMW’s, the Volvo’s and Saab’s on our highways.  These high-end cars were built by European workers with higher rates of unionization and higher wages than workers at Ford, GM and Chrysler.  Japanese auto workers are also highly unionized and well paid. The total labor costs of US manufactured cars was significantly higher but that’s because costs like health insurance aren’t treated as costs of production in other advanced nations.  Those benefits are part of a social wage–a subject to which I will return.  Incidentally,  European and Japanese firms are producing cars in non-union and low-wage areas of the US, particularly in the South.  That says more about the sorry state of US labor law than it does about the competitive position of GM, Ford and Chrysler.  That the facts don’t match Will’s narrative doesn’t matter.   Repeat the story often and with emphasis, and people, particularly people with the power to set policy, will believe.

Note what Will is really complaining about.  He decries the bargaining power the United Auto Workers had in the years roughly from its founding in 1937 to the beginning of the Reagan era, which really started a few years before the 1980 election.  Maurice spoke movingly about Walter Reuther.  It may be hard to imagine now, but the UAW literally led the way to the creation of a mass middle class in the United States.  The period when the UAW and other unions were strong corresponded to the longest economic boom in world history.  While we now need to obsess with the latest statistics on how much worse inequality is becoming, economists characterized the period from 1945 to 1975 as the Great Compression.  The economy grew dramatically, and the shares of that growing income were shared relatively equitably.

Why would Will and his compatriots on the Right denigrate the great success of a highly unionized economy that drove economic growth and greater equality?

Re-read that paragraph.  What Will really fears is the power of a good example.  City officials gave their own employees pay scales nearly comparable to those of auto workers.    We can’t let good examples spread!

One of Margaret Thatcher’s most famous quotes held that  “There Is No Alternative.”  She said that at the time that she was busting unions, cutting back government spending for the  working class and the poor and distributing income upward.  Reagan was pursuing the same policies here.  The  Thatcher-Reagan policies came to be known as  neo-liberalism.  That policy framework  has shaped political discourse around the world.   The Right needs to insure that everyone understands and lives Thatcher’s creed that There Is No Alternative.    Nothing disturbs that more than the possibility that people see alternatives.

Witness the fervor with which Congressional Republicans seeks to roll back Obamacare.   All of them oppose it; many seem willing to force a shutdown of the federal government to force a defunding of the Affordable Health Care Act.

Make no mistake about their motives.  For all the talk about Obamacare unraveling and being unworkable, Paul Krugman  notes that the Right fears that this modest but important reform will succeed too much.  People shut out of the health insurance market because of previous conditions, people who have hit lifetime limits imposed by insurers, people whose family income is three times the poverty rate and who can’t afford insurance–all these people will  see their situations improve.  Health care costs will actually fall.  By acting collectively through our government,  we will improve people’s lives.   The horror!

Let me give an example of a good example  you might find vaguely relevant.  When I worked for DSOC in the 1970s, I lived in New York City during  the worst years of the fiscal crisis.  An emergency financial control board  assumed control over the budget.  One of the board’s early actions was to end the long-standing tradition of free tuition at the City University of New York.  The decisions and deliberations of the board were public, and the New York Times covered their discussions extensively.  No one argued that the amount of tuition collected would contribute significantly to the City’s bottom line.  No, the argument was that imposing tuition was important symbolically.  The message needed to be clearly transmitted that pain was being felt.

Think about that for a minute.    Maurice spoke about Daniel Bell and Irving Howe at City College.  The vitality of New York City as an intellectual center, even its importance as a commercial center,  was directly related to the ability of poor, immigrant kids to attend college free.  Limiting that access was symbolically important to send a message to bankers that the city was serious about its finances.  Free tuition could be a very dangerous good example.

The really dangerous good example of recent years has been the public employee contract.  Workers getting decent wages, vacations and guaranteed pensions, due process on management discipline–that could cause people to get ideas.  The contagion–of rising living standards for workers–used to run from the private sector to the public sector, but now the threat of contagion runs the other way.  Hence the need for thought leaders like Will to compare public employees unfavorably to parasitic larvae.  He provides the intellectual firepower for policies advanced by Governor Scott Walker.

Of course, unions represent more than a good example.  Labor also provides the major institutional base for a challenge to the power of the corporate rich.  And the corporate rich don’t like being challenged.  Pushing unions even further to the margins just takes care of so many problems at once.

But there is a dilemma.  And it’s the major theme of that same July 31 George Will column.  Will states openly that  “Detroit died of democracy.”

This bedraggled city’s decay poses no theological conundrum of the sort that troubled Darwin, but it does pose worrisome questions about the viability of democracy in jurisdictions where big government and its unionized employees collaborate in pillaging taxpayers. Self-government has failed in what once was America’s fourth-­largest city and now is smaller than Charlotte.

Will intends provocation here.  Let us be provoked into posing a question back.  Is capitalism as currently practiced in the US compatible with democracy?

Clearly, a number of Will’s co-thinkers worry that it’s not.  Romney’s speech about the 47 percent of Americans who don’t pay federal income tax expressed clearly the fear that self-interested “takers” would outnumber the virtuous “job creators” at the polls.    The intense attack on voting rights aims to provide a structural remedy for that problem.

The irony of exploring this question at a socialist conference is clear.  Conservatives and even many liberal allies have posed the reverse of this question to us at least since the Bolshevik Revolution.

Our affirmative answer as socialists and as advocates for the workers, the poor and the oppressed must be that our entire mission concerns the expansion of democracy everywhere

Will would counsel us that government power can be arbitrary and capricious.  Of course, it can.  That’s one very strong argument for public sector unionism.   A worker wrongly disciplined must have the right to due process and to a fair hearing.   That’s part of a democratic process

What Will won’t warn us about is the arbitrary and capricious nature of corporate power in the private sector.  Strengthening the position of workers to challenge unfair employers helps the affected workers directly.  Even in old-fashioned liberal theory, strong workplace organizations create countervailing power that enriches our democracy.  We want more than countervailing power.  We want full democracy in the workplace and the vast reduction of the power  wielded by private corporations.

Conservatives and some liberals bemoan the growth of “entitlement” spending and urge that we cut back Medicare, Medicaid, Social Security, food stamps.

Our response must be that  entitlements can also be viewed as part of what European social democrats have long called the social wage.   Some of what we earn comes in a paycheck.  For many Americans, additional benefits, like health care, come as part of a fringe benefit package.  That’s an accident of history.  Walter Reuther didn’t want GM to pay for health care for auto workers.  He and his CIO brothers and sisters fought for universal health care funded by progressive taxation.  The United States is the richest society in world history.   We can afford to provide benefits to our entire population.  How we can afford it is a longer discussion.  Suffice it to say here that if we cease to project our military power to every corner of the world, we’d find that we have a lot of money.  After that, we can follow Willie Sutton’s advice that we should go where the money is and tax the richest Americans.

Child care is mostly privately funded and is a major burden for most working and middle class families.  In most of Europe, good child care is part of a social wage.

Public education is part of a social wage of sorts now.  Funding is very regressive.  Federal  funds could help to bring up the quality of public education in poor and working class communities.  Doing so would address glaring and growing inequalities that threaten our social fabric.

For some time to come, unions will face severe limits to what they can win at the bargaining table. Labor and its community allies can fight for gains elsewhere.   A higher minimum wage or even better local living wage ordinances can set a standard that determines higher pay for a large section of the working population.  Mandated sick days and mandated vacation exist commonly in European employment law.  Why not here?  Maria is addressing  how alternative labor and community organizing is addressing some of these issues.  Harold Meyerson has just published in The American Prospect  a long and excellent article on the struggles of the Los Angeles Alliance for a New Economy to win many victories along these lines.

In that same light, if New York City in the 1930s was rich enough to provide a free college education, isn’t the United States in 2013 rich enough to do the same?

Moving from fights from democracy on the local level, the democratic socialist movement is also tied to the struggle for democracy internationally.  NPC member Paul Garver has done exemplary work supporting the struggles of independent workers’ organizations in China.  Eric Lee, who used to be my assistant in the DSOC office, now runs LabourStart out of London.  With a few clicks on your computer, LabourStart  allows you to join hundreds in support of jailed union leaders in Iran or striking workers in the Philippines.   Organized workers are central to the democratic insurgencies around the world, and the recognition of basic workers rights is essential to building enduring democracy.  Democracy means that we include everyone.    We also stand in solidarity with women fighting for the right to education in Pakistan and Afghanistan, with the LGBT community fighting for basic freedoms in Russia

To recap, then, we have seen a vicious set of attacks on the labor movement.  Those attacks seek to de-legitimize and even de-humanize working people and their representatives.  But the viciousness has two purposes: to snuff out possibilities of good examples that can spread and to weaken the strongest remaining force against corporate power.  In attacking unions, the Right has inadvertently its own ambivalence about democracy.  We must jump into this fight, demanding more democracy and fighting for changes that can strengthen the position of working people broadly.  Part of that will be re-defining the demonized entitlements as part of a social wage.

Closing where we began, unlike George Will, we know who the real parasites are.

 

Jack Clark was the first National  Director of DSOC from

1973-1979.  The Democratic Socialist Organizing Committee merged with the New America Movement  in 1982 to become DSA.  Clark served on the  National Political Committee of  DSA from 83-93.

Remarks  for DSA Youth Conference August 9, 2013

 

 

 

 

 

 

 

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