The Crisis in the Labor Movement

The Million Worker March movement, the splits that are emerging at the top of the AFL-CIO around the New Unity Partnership, the renewed offensive of employers in industry after industry as well as the government’s demand givebacks and concessions, are all indications that the crisis that’s brewing in the labor movement for over two decades may be fast approaching a breaking point.

It is important to note that US capitalism is also entering a period of major crisis, mainly regarding the quagmire in Iraq which threatens to accelerate its long-term structural crisis that is reflected in the accumulation of unprecedented debts and deficits; stock market and housing speculation bubbles; massive loss of industrial jobs; and lack of investment in infrastructure, education, health care etc.

The wave of labor-management “partnership” and concessionary contracts – which were originally seen as a temporary solution for hard-hit industries such as steel, auto, and airlines – resulted in the loss of tens of billions of dollars by the workers in those industries but in increased profits for the employers. Concession bargaining is now the standard in just about every industry in the country. Even employers who have healthy profit margins and are not threatened by “foreign” competition demand concessions from the workers. The same applies in the public sector through the threat of privatization.

Despite some scattered organizing successes, the proportion of workers in unions in the private sector dropped from 9.6% in 2002 to 8.2% in 2003, leading some labor experts to question the very future of “collective bargaining.” At its peak, union density in the private sector was 35% in 1956.

Study after study show that real wages for a majority of workers, have stagnated or declined. During the last three years alone, the average family income declined by $1,500, and 4.3 million people (especially children) were added to the 17 million who considered officially poor. Over 50 million people are estimated to have no health insurance. The real extent of poverty can be seen in the latest issue (2004/2005) of State of Working America which shows that 30.4% of black workers, 39.8% of Latino workers and 15.1% of white male workers earned poverty wages in 2003. The same publication shows that there was an 11% increase in work hours between 1979 and 2002.

At the same time, “a large share of the population has little or no net worth, while over the last 40 years at least, the wealthiest 20 percent has consistently held over 80 percent of all wealth and the top 1% has controlled over 40%.” (State of Working America, published by the Economic Policy Institute.)

According to AFL-CIO president John Sweeney, over 15 million people are without jobs if those who have given up looking for work or work only part-time are included in the statistics for unemployment, bringing the real unemployment rate to over 10%.

As during the Reagan presidency, the offensive against wages and conditions went hand in hand with massive tax cuts for the rich and the big corporations. Workers, trying to cope with the crisis, relied more and more on credit and borrowing, leading to an explosion of consumer debt ($2.2 trillion) and record personal bankruptcies. Since 2001, 1.6 million jobs were lost – making Bush the first president since the Great Depression to have a net loss of jobs during his administration.

A recent study reported in the New York Times (10/8/04) by the Ford and Rockefeller Foundations, shows that 9.2 million working families – one in four – earn wages that are so low they are barely able to survive. “Our data is very solid and shows that this is a much bigger problem than most people imagine,” said one of the authors of the report which also found that there are 20 million children in these low-income families.

Employers’ Offensive

The Bush administration continued the employers’ offensive that went on unabated during Clinton’s presidency when NAFTA, deregulation of industries, welfare “reform” and massive cuts in social spending took place in order to “balance the budget” and please his Wall Street backers.

In the airline industry (the most heavily unionized private industry) billions of dollars worth of workers’ hard-earned wages and benefits have been rolled back as companies demanded concessions to supposedly save jobs, then went into bankruptcy and made the cuts anyway.

In the trucking industry, once the symbol of Teamster and organized labor power, union membership is now 17% with UPS representing a disproportionate share. In the steel industry, where there are few workers left, it is the 600,000 retirees that have become the target for concessions, with cuts in their health and pension benefits.

In the auto industry, the UAW gave away huge concessions in the 2003 contract, agreeing to allow the auto companies to pay new workers 30-40% less than those currently working at assembly plants. The UAW had over 1.5 million members in 1978 and was seen as the model for raising the living standards of blue-collar workers. It now has about 600,000 members and setting the pace for job losses and wage losses in the labor movement. As a result, unionizing efforts for the non-union 80% of auto parts workers and those working for auto “transplants” have been set back.

In the public sector across the country, the recent contracts of municipal workers saw virtually no wage increases, but instead demands for higher productivity and an increase of privatization. In New York, AFSCME District Council 37 (which represents city workers) signed a terrible three-year contract in which the below-inflation wage increases were to be financed by cuts in salaries and benefits for new hires and productivity increases. In city after city, the government claims that there is no money to support services, education, libraries, etc., while hundreds of billions of dollars are given to rich developers and military contractors.

The Grocery War

Workers with picket signs became a feature in southern California at the end of 2003 as 59,000 workers confronted three of the biggest supermarket chains in the country. After a grueling five-month strike/lockout, the struggle ended in February 2004, when workers accepted a concessionary contract that forced them to pay for their health benefits (previously paid by the company). The new contract created a two-tier system for new employees, with an inferior “health plan” and lower wages.

The dispute it was since UPS workers went on strike in 1997. It gained national attention not just because of the large number of workers involved, but also because it signaled a serious new offensive by employers against employer-based healthcare.

The grocery workers, represented by seven locals of the United Food and Commercial Workers union (UFCW), were fighting to defend the gains they had made over the past decades of hard struggles. The employers – Safeway Inc. (owner of Vons and Pavilions), Kroger (owner of Ralphs), and Albertsons – known as the Big Three, together control 60% of the market in south California and made $8.3 billion in net profits in the last four years alone, an increase of 91% since 1998.

While profitable, the supermarket bosses claimed that they need over a $1B in concessions from the workers in order to “compete” with companies, like Wal-Mart, which pay low wages and offer little or no benefits.

The strike touched a raw nerve among millions of people in southern California, as the stores were largely empty and the companies lost an estimated $1 billion because shoppers were refusing to cross picket lines. All across southern California, community people were organizing rallies, walking the picket lines with workers, engaging in civil disobedience, and having fundraisers.

Teamsters and longshore workers organized solidarity actions with the grocery workers. Actions reached all the way to Wall Street in New York City, in a rally against the corporate owners of the supermarket chains. Even with strike benefits down to $100 per week in the last month of the strike, very few workers crossed the picket lines – showing their determination to the very end.

Workers in the Los Angeles metropolitan area have seen 500,000 well-paid industrial jobs in aerospace disappear in the 1990’s, which – following the loss of hundreds of thousands of manufacturing jobs since the 1970’s – has led to further class and racial polarization.

In a significant show of solidarity, Teamsters from Locals 848 and 630 refused to cross picket lines, and International Longshore and Warehouse Union (ILWU) Locals 13 and 63 raised a million dollars to help the grocery workers continue their medical coverage. However, the hard fact remains that – despite the mass popular support – the union was not able to stop strikebreakers and scabs from operating the distribution centers and supermarkets. This allowed the Big Three to use their huge resources, share the losses, and bide their time to defeat the strike by the sheer exhaustion of the workers’ resources. Many strikers’ families lost cars and homes because of the long strike.

Many workers also complained that they were kept in the dark about the course of negotiations with the employers. The union’s tactics of trying to play one of the chains against the other by removing the pickets from Ralphs distribution centers in December (and returning them in January) and offering $350 million of givebacks failed. That the supermarkets and distribution centers continued to operate with scabs despite huge losses clearly indicates the intent of the employers to use their combined resources to defeat the union and the workers.

One of the lessons from the strike was the necessity to use mass picketing to completely shut down the supermarkets and distribution centers. The unions should have extended their call for solidarity to the Teamsters and other workers, to honor picket lines. The AFL-CIO and UFCW should have expanded the call for a national boycott of Safeway, Inc. to the Big Three, and called on union members to organize solidarity strikes with the UFCW workers in southern California so that the bosses could not use the profits they make from the rest of the country to keep them going in the dispute. A key reason the bosses were able to withstand the strike was because it was left isolated in southern California. The Big Three were able to use the profits from their operations in the other 49.5 states to outlast the strike.

In every area in southern California, unions, Central Labor Councils, and solidarity committees should have organized demonstrations to support the grocery workers, raised funds, and used the combined strength of the union movement and the working class against the employers. Significantly, even the big-business press had to recognize that the heroic struggle of the 59,000 grocery workers to defend their wages and health benefits resonated widely because of the economic pressures felt by millions of people. All the issues in the southern California dispute are issues that are facing grocery workers nationally. This collective, national power of the UFCW should have been used to organize solidarity actions, including strikes, to bring the maximum pressure to bear on Safeway, Kroger, and Albertsons.

Such a campaign could have been linked with a serious national strategy to unionize “superstores” like Wal-Mart. The chain pays $10/hour less than the 250,000 union grocery workers in California, provides little or no health insurance, demands longer hours from employees, and pays no significant retirement benefits.

The reality is that either the unions will enforce decent wages and conditions on Wal-Mart, or Wal-Mart conditions will prevail in the entire industry, as employers will complain that they cannot “compete.”

‘New Unity Partnership’

Reflecting the crisis in the labor movement, a group of union leaders have formed a mini-federation to challenge the current AFL-CIO leadership. This group consists of Andrew Stern of the SEIU; John Wilhelm of the Hotel Employees and Restaurant Employees (HERE); Bruce Raynor of the Union of Needletrades, Industrial and Textile Employees (UNITE); Terrence O’Sullivan of the Laborers International Union of North America (LIUNA). (UNITE and HERE recently merged into a single union UNITE-HERE.) The group includes Douglas J. McCarron of the United Brotherhood of Carpenters which withdrew from the AFL-CIO in 2001. New Unity Partnership (NUP) has mainly criticized the AFL-CIO for its failure to organize and claims that a new federation leadership would dedicate a much higher priority to organizing.

The New Unity Partnership tries to present itself as a modern-day equivalent of the CIO in the 1930s, and they will most likely challenge Sweeney at the 2005 AFL-CIO convention. Despite the rhetoric about the need to “revolutionize the AFL-CIO,” NUP represents a split in the bureaucracy that runs the labor movement. The NUP group can not transform the unions into fighting, democratic organizations from the top down, through mergers of smaller unions into larger units, the replacement of local labor councils by appointees with no rank-and-file participation other than perfunctory roles as “extras” who are herded in staged demonstrations.

Nevertheless, the fact that there will be a renewed debate about the future of the labor movement is something that can provide important openings for socialists and radicals in the unions. The splits between different groups of the labor bureaucracy at the top will open a serious discussion among activists and workers about the policies that are needed in order to transform the labor movement. This can lead to questioning of the current policies from how to conduct strikes to support for the Democratic Party.

These debates can also help educate a fresh section of young people who, through the anti-war, and anti-corporate movements, have become aware of the labor movement and of the role of the working class as the main force that can challenge the dictatorship of big business and capitalism.