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The Continued Power of the American Working Class – A review of Kim Moody’s Book: On New Terrain

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As dynamic teacher strikes in the South are demonstrating the power of workers when organized into a determined struggle, it’s a good time to explore important questions about the strength and capacity of the working class to unite in struggle in the United States.  In particular; is the U.S. working class still able to play a revolutionary role as the main engine to bring an end to this abusive system of capitalism and bring forward a new socialist society?

The excellent book “On New Terrain: How capitalism is reshaping the battleground of class war” by Kim Moody, published in 2017, is an important contribution to this discussion. Kim Moody is a founding member of Labor Notes and author of many books on labor. As always Moody bring a wealth of facts to back up his arguments. In this book he has brought these together into a focused view of “the terrain” upon which the labor battles of tomorrow will be waged.

The book is divided into three sections. The first two sections are essential reading for activists wanting to understand the potential of the working class to launch powerful struggles in the next period. The third part discusses the changing political terrain. This article will mainly review the facts and arguments elaborated in the first two sections. I will make a few brief points on part three at the end of the article.

This new terrain is most dramatically seen in the explosive teacher struggles in West Virginia, Kentucky, Oklahoma, and Arizona.  These outbursts of labor activism, which challenged social norms in “red states” and won real victories, have dramatically exposed the fallacy of the narrative told in conservative and liberal media that the organized working class is no longer an important factor in U.S. society. Instead, it has shown that when workers move into struggle, they can overcome huge obstacles, including the role of their conservative union leaders, and can unite wide sections of the working class behind bold, popular demands.

Many will point to the fact that teachers are not as powerful as the industrial working class that shook the foundations of U.S. society through their dynamic struggles in the 1930s. While this is clearly true based on their ability to affect the economy, that is only one side of the issue. The teachers have demonstrated once again the dynamism and capacity for struggle of the U.S. working class. This an important development. But Karl Marx, the founder of scientific socialism, identified the broader role the working class has the potential to play – to unite into a powerful force that could overthrow capitalism and usher in a new socialist society. By reviewing in detail the relationship between the modern working class and the economy, Moody’s new book also shows that the working class still has the capacity to play this historical role.

The Liberal Narrative

Moody’s book contradicts the basic narrative that has been repeated in the liberal press and academia that the potential power of the working class has been eroded since the massive upsurge of militant industrial workers in the 1930s and 1940s built powerful unions, which laid the basis for huge gains in living standards for the broader working class in the 1950s to 1970s.

The principal arguments used to back up this narrative were that: 1) the industrial working class had declined, 2) that the working class was not longer concentrated in major cities, but now scattered in the suburbs, 3) that the service industry and the gig economy had transformed the working class, and 4)  that, with union membership having declined, unions were effectively powerless. Moody’s book negates all these arguments through a powerful presentation of facts and Marxist analysis.  

“The New Terrain” Has U.S. Production Declined?

The first myth that needs to be refuted is the idea that the industrial working class, which has the potential to stop production and thus has enormous potential power has declined. This is not true. Moody quotes The Economist magazine: “For all the bellyaching about the ‘decline of American manufacturing’ and ‘the shifting of production en masse to China, ‘real output has been growing at an annual pace of almost 4% since 1991, faster than GDP growth”  (The Economist, “Industrial Metamorphosis,” 9/29/2005).

The statistics compiled by Moody confront the simplistic narrative, recently latched onto By Trump, that imports have taken away American manufacturing jobs. Yes, jobs were lost, but the truth is far more complicated. The majority of jobs were lost during the recessions. Two and a half million in the 1980-82 recession, almost 1 million in the 1990-92 recession, just over two million in 2000-02 recession and around two million in the 2007-2010 great recession. Between these recessions, unemployment levels were either steady or increased. Moody argues that If it had been imports that caused unemployment, the trend line of loss of manufacturing jobs would have been a steady decline.  

To prove his point, Moody looks at domestic content of products made in the U.S. While imported parts and components in products produced in the U.S. has increased since the 1980s, the domestic content of products assembled or manufactured in the U.S. is still 85-90 %. This compares with a global average of 72% (U.S. Census Bureau, Statistical Abstract of the United States, 2011; p 408, 647).

Moody quotes the Federal Reserve Board’s industrial production index to demonstrate that manufacturing output increased by 131% between 1982 and 2007.  This is an annual increase of 5% – three times the rate of other developed countries. This 5% rate compares with 6% during the boom years of the 1960s. A very recent expansion of six mega projects representing over $185 billion in investment by the U.S. chemical industry in the Southeast provides further evidence to back up Moody’s analysis (The Economist, 4/14/18).

Increased Productivity – The Job Destroyer

The productivity of American workers has increased enormously, but this has only benefited the bosses. Moody gives good examples of this process, whereby the corporate owners extract more value out of the labor of the worker.

The labor theory of value is one of the central themes of a Marxist analysis of the capitalist economy.  The worker sells his or her ability to work by the hour to the boss. The boss gets to utilize that worker’s labor in any way they like during that time. Profit comes from the ability of the boss to create more wealth in this hour of labor than he pays the worker in wages.

The first element in raising productivity is mechanization. For example, the number of workers employed in the U.S. steel industry declined from 187,000 to 96,000 between 1990 to 2005.  Yet during the same period the total net shipments of U.S. steel producers in the U.S. increased by 14%. This was due to the growth of so-called “mini-mills” which used electric arc furnace, which are more efficient.  Their share of domestic production increased from 37 to 55% in this period (U.S. Census Bureau, Statistical Abstract of the United States, 2011; p 408, 647).

The other key aspect of increased productivity is achieved by making the worker work harder. Marx calls this the intensification of the workday. Moody demonstrates this well when he compares how Toyota extracts 57 seconds of productive work out of each 60 seconds of labor by the worker.  This is similar to what Amazon does in its warehouses, measuring each motion made by a worker to extract every second of profit by avoiding any “wasted” labor. The same figure in U.S. based auto plants was between 45-52 seconds of productive labor per 60 seconds. (Basso, Modern Times, Ancient Hours, p. 63-64). Moody quotes a rank and file newspaper The Barking Dog which laid its hands on a memo from GM-Toyota NUMMI plant in California where it reported the introduction of a “pilot team in charge of figuring out how to add six seconds of work to our job.”

Employers went after work rules, cutting the number of breaks and the length of each break. As a result, between the 1980s and the 2000s the average break time was cut from 13% of the workday to 8% of the workday.  That is almost 30 minutes of free labor for the boss (Kim Moody and Simone Sagovac, Time Out! The Case for a Shorter Work Week, 1995, p 15-16).

A second process used by auto manufacturers and other employers is to move from five 8-hour shifts to four 10-hour shifts. By extending the length of the day by two hours employers calculated they could extract more productive labor from the workers, since there would be fewer shift changes.  Also, by extending the regular workday into the evening and the weekend, they avoided paying overtime outside the Monday to Friday 8-hour work schedule.

In all these ways, the bosses increased their profit per hour based on workers’ labor.  Among other similar statistics, the Conference Board, a business organization, calculates there has been an average 4% annual increase in  profit per hour between 1979 and 2012 across all U.S. manufacturing industry (Conference Board, International Comparisons of Manufacturing Productivity and Unit Labor Costs Trends, 2012, p. 7).

The Working Class Today

Moody does an excellent job identifying the different layers of workers, and those that are essential to the productive process of capitalism. For example, he correctly points out that transportation and warehouse workers are essential to the modern productive process.

The total number of workers employed in “production, transportation, and material moving” in the U.S. at the last census was 19 million. 13 million workers were employed in “extraction, construction, and maintenance.” These represented 19% of the workforce. 18% were in services and 24% in sales. This totaled 63% of the workforce. The remainder are 1% “capitalist class,” and 36% “managerial” or “professional.”  

However, he also identifies sections of workers in the “professional” category such as engineers, teachers, etc. who are in the process of “proletarianizing” due to the increased regimentation and standardization of their work.  In fact, many of these workers have been on picket line in recent years. These adds up to 8% of the workforce. When added to the 63% above you get a broader number of 71% of the workforce being classified as working class (U.S. Census Bureau, 2012).

He points out that among the growth in service jobs, five million jobs were based on maintaining facilities and buildings.  Most of this labor was outsourced by manufacturing and other industries. These would have previously fallen under the Bureau of Labor Statistics category of “manufacturing” (U.S. Census Bureau, Statistical Abstract of the United States, 2011; p 410).

Cohesion of the Working Class

For Marxists, the cohesion and opportunity for unity are key to understanding the potential power of the working class. The main division fostered by the ruling class in the U.S. has been race.  Other divisions are national background and geographic location.

Moody provides important insight into two of these issues. The workplace is more integrated now than ever before.  Women are 51% of the workforce and are employed in a much wider variety of workplaces that previously. They now represent 37% of construction, 28% of warehouse workers, 22% of transportation and 41% of information workers.  Black, Latino, and Asian workers now represent 33% of the workplace. Forced to work in lowest paid jobs, they will play an important part of the working-class fightback as it develops.  Already largely female teachers and nurses are playing a vanguard role in rebuilding the labor movement.

Women also make up 46% of all union members, while black, Latino, and Asian workers now represent 33% of union members. These are all quite large increases in the last couple decades. Also, 13% of unionized workers are immigrants. This demonstrates the growing diversity of the union movement, which will greatly increase the ability of the working class and the oppressed to act cohesively and to reach support among wider working class struggles such as BLM, immigrants rights, LGBTQ, and the emerging women’s movement.

Kim Moody challenges the dominant narrative about the dramatic growth of the precariat and the new “gig” economy.  In a chapter titled “Precarious Work: Growth but less than you thought” he gives many statistics to demonstrate that capitalism has always relied on a part-time workforce to undermine wages and conditions, and to use for temporary labor.  For example, he gives a figure showing that in 2005-6 employment agencies employed 2.5 million compared to 2.9 million in 2015. The “unincorporated self-employed” totaled 10 million in 2005-6, dropping to 8.5 million in 2015 (Moody p. 25).  While there are many aspects to the new precariat and gig economy, this chapter gives food for thought on the dominant narrative, but will need to be fleshed out by further research.

Location, Location

An essential aspect of the ability of the working class to cohere into a powerful force is proximity to each others’ struggles, either geographically or within larger workplaces. Success in organizing workers of different trades into one union was crucial to victories of the 1930s. By uniting their struggles, steel, auto, and rubber workers were able to shut down U.S. Steel and other huge companies and force them to recognize a union and start to pay decent wages. These unions also united workers from different races into a united force.

Moody demonstrated how the bosses succeeded in breaking up this concentration of mainly unionized workers in major industrial cities like Detroit by opening up plants in more rural areas. For example, this allowed them to open auto plants in the upper South – specifically Kentucky and Tennessee -with a lower wages and benefits and, consequently, higher profits. The failure of the United Auto Workers union to aggressively organize these workers allowed the companies to leverage wage and benefit reductions in unionized plants.

Moody also focuses attention on the merger activity of big corporations. During the 1970s and early 1980s companies were mainly diversifying their operations into profitable activities that were unrelated to their core industries. For example, U.S. Steel moved heavily into financial activity.

In the 1990s and 2000s, with U.S. corporations facing growing international competition, this process began to change. The majority of merger activity was instead focused on strengthening their core activities. This has reversed the previous trend of the capitalist class looking to weaken the working class by creating geographic dispersion.

This has resulted in a re-concentration of the working class around the core operations of the companies. For example, Moody describes how auto production is now concentrated more than ever in a belt in Midwest and upper-South. In order to keep up with capitalist competition abroad, auto parts producers and auto manufacturers have linked up for a tighter production and delivery process.

While Moody describes well the effect of the crisis of the economy on the workplace at this present moment, he fails to draw the broader conclusions about how the inner contradictions of capitalism necessitate a struggle to overthrow the system itself. The 2008 recession was caused by the collapse of speculative bubbles caused by the inability of capitalism to create viable markets for its products. At the same time, to compete with its rivals, it was forced to cuts wages. And it is this reduction in wages that is causing the lack of demand to buy goods.

Only by taking these huge economic resources out the control of the private owners can they be run in the interest of the workers and society as a whole.  The building of a socialist society run the by the working class can end the destructive system of capitalism, where jobs and working conditions are destroyed by the race to the bottom in the interest of profits.

Working-Class Hubs

The most important contribution of this book is the highlighting of the creation of just-in-time logistics supply systems.  Moody writes: “The just-in-time (JIT) standard for the auto industry, and by implication most manufacturing, went from a three-day delivery ‘window’ to a ‘thirty-minute time frame’” (Moody, page 15). This drive for increased profitability has forced the big companies to streamline their operations to such an extent that they are now even more susceptible to strikes.  Massive sprawling distribution centers bringing together warehouses and transportation have been concentrated in “nodes” or “clusters” in suburbs around centers of unemployment and low wages in and around major cities.

Moody estimates there are over 50 such hubs in the U.S., with Chicago, Los Angeles, the New York/New Jersey port, and Memphis having concentrations of over 100,000 workers each. The locations are based on their proximity to major urban centers (markets), docks, and airports. These are also areas with a high concentration of low paid-workers looking for employment, who are predominantly black or Latino.

While the driving force for this concentration has been capitalism’s insatiable lust for profits, the consequence has been to strengthen the cohesion of the working class. They work and live in the same neighborhoods, have similar types of work, and rely on each other’s labor in the productive system. It’s almost as if the factories of 1930s have been recreated in new form. Moody estimates that around 3.5 to 4 million workers are concentrated in these nodal hubs of distribution. Some are unionized, like UPS workers and some truck drivers, but many are low paid workers suffering without union protection in Amazon’s and other companies’ warehouses as well as in non-union trucking.  Many have no set hours, and work on contracts that force them to be “on call.” Also, the importance of air travel in distribution puts a huge amount of potential power into the hands of airport workers..

While no one would underestimate the ferocious resistance Amazon and other huge companies will put up to organizing, the potential for these workers to not only organize but also to win real improvement in wages and conditions is huge.  With the use of social media tapping into the anger at the 1%, once an organizing drive starts to win support it can spread like wildfire to other workplaces. These and other such struggles will have a huge galvanizing role in the labor movement. One only has to look at how teacher struggles have spread to other states after the initial victory in West Virginia.

Moody argues that the potential for a new upsurge of labor is the most favorable in generations. Not only have workers’ living standards been driven down for decades, but teachers provided a reminder of the dynamism and fighting spirit of the U.S. labor movement, and demonstrated the power of the strike as means of struggle when backed up by support from broader working class. In the first two parts of The New Terrain, Moody demonstrates how the terrain, upon which future struggles of the U.S. working class will be fought, have become much more favorable.

The Need for Independent Working Class Politics

The third section of the book lays out important arguments about how both major political parties are parties of big business and the need for labor to build a political alternative. Moody demonstrates the roots of both parties in the class interests of big business and describes the particular role of the Democratic Party as a cul-de-sac for worker struggle. While presenting an image as a friend of the working class and progressive social movements, the Democratic Party hands out neoliberal politics similar to the Republicans once in office.

While Socialist Alternative agrees with these central arguments, The New Terrain places too much reliance on independent movements gathering a certain level of social weight before it can make real challenges to the two parties and achieve political breakthroughs. This means downplaying the essential role socialists and other activist can play by initiating dynamic independent political challenges and thus demonstrating a new path to wider layer of activists and to sections of the labor movement.

He spends many pages describing the important ingredients to building a successful independent working class political movement, focusing on the need to build a base in society and link up with ongoing social movements and reviewing the political movement in Richmond, California. The Richmond Progressive Alliance (RPA),  an independent political formation with the backing of many labor unions, progressive activists, and some in the Democratic Party, won the mayor’s race in 2006 and set the stage for a majority on the Richmond city council. It has won some important reforms. As a Socialist Alternative article describes: “The RPA ran grassroots campaigns based in community needs and social movements and defeated Chevron-backed opponents in four separate election campaigns.”  

Most labor leaders are not going to break from the Democrats unless they can see a viable alternative, and fear being by-passed by an insurgent movement. Socialists and other activists running independent campaigns are an essential part of demonstrating the viability of building a left pro-working-class political alternative outside the Democrats.

For example he spends only four sentences describing Kshama Sawant’s winning of a Seattle City Council seat with 80,000 votes in 2013. Running as an open socialist and member of Socialist Alternative, Sawant’s campaign combined a sharp Marxist analysis of the political terrain with a dynamic campaign focused on the key issue facing working people in Seattle, including a $15 an hour minimum wage.

Since being elected, and re-elected in 2015, Sawant has used her elected office to build serious grassroots campaigns that won $15 an hour, Indigenous People’s Day, and a series of victories on affordable housing. Such a model could be repeated across the country.  If all socialists and other activists, including the most radical sections of the labor movement, took this approach towards politics, it could win real gains for the working class and open up the road of independent political action.

In this book Moody has provided activists with important information on the viability of the U.S. working class to be a force to transform society.  He has demonstrated the continuing importance of the working class as a force in U.S. society, including its growing diversity and its reach into more professional categories of workers. He demonstrates the continued importance of manufacturing in the U.S. economy.  Finally, he points to the newly emerging logistics supply systems and distribution/transportation hubs where capitalism is dependent on groups of workers, who now have enormous power in their hands, and can shut down the economy if they unite in struggle.

As activists, our task is to build dynamic campaigns that reach out to those moving into struggle on wider social issues and into the working class in the workplace, in the streets and in the electoral arena. With the recent teacher strikes demonstrating the continued relevance of the labor movement, and the power of public sector workers when they go on strike, this book could not have come out at a more relevant time. As socialists our role is to link up social movements with the broader layers of the working class, and point toward to the enormous potential of the working class to transform U.S. society when armed with a class struggle strategy and dynamic fighting tactics.

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