Two-tier wage system & class struggle

New York Times economic analyst Louis Uchitelle’s articles usually appear in the business section. That his Nov. 20 feature wound up on page one means his editors found it especially important.

As with most Times’ articles, this one is slanted to discourage workers from struggling. A Marxist activist reading it, however, might conclude that working-class struggle in the United States is inevitable, a new union leadership is absolutely necessary, and this new leadership must refuse to accept private property and capitalism as permanent. They must instead embrace Marxism, the ideology of class struggle and the need for socialist revolution.

This is the only alternative to workers submitting to a life of grinding poverty.

Uchitelle examines the bosses’ strategy of imposing “two-tier” wages in the factories in the industrial region of southeastern Wisconsin. This is where the cities of Milwaukee, Racine, Kenosha and Brookfield are. It’s where 15 percent of the workforce still works in factories and are in unions. It’s also where most of Wisconsin’s African-American population lives.

Most factory workers until recently earned wages and benefits that could provide a family with a home, car, health care and retirement benefits, according to Uchitelle’s numbers.

Factory owners and managers — even at profitable factories — have decided to increase profits even if they must reduce sales. They are consciously cutting labor costs by reducing wages. They do this by hiring “casual workers” at lower wages and no benefits. They impose low wages on new hires.

The new wages are half to three-quarters the existing rate. This disrupts union solidarity, dividing the new and the experienced workers. These wages are too low to allow young women and men to set up a household similar to what their parents could. They create a situation of immediate frustration.

To bludgeon unions into accepting such bad contracts, the bosses threaten to shut the factory or move it, not to China, India or Mexico, but to areas of the U.S. where unions are weaker or nonexistent.

No doubt workers and youth in southwestern Wisconsin want to fight this development. But Uchitelle interviews the old-line union leadership. They became leaders when the workforce was overwhelmingly white and male, and when anti-Communist laws pushed revolutionaries out of the unions. They see capitalism as permanent, and they accept the ground rules of private property. With workers fearful of losing jobs under conditions of high unemployment, these union leaders have already given up the battle.

WW reporter Martha Grevatt has been writing for the last two years about such conditions already imposed on members of the United Auto Workers at Delphi plants and, under the terms of the 2009 government bailout, on workers at the big three car makers.

Uchitelle implies that capitalists all over the U.S. will adopt this strategy: Cut wages in half, starting with two-tier contracts, and make wage cuts and high unemployment permanent.

Such a strategy undermines the social stability in the U.S. working class that has existed for decades. Even if the decline in wages to near-poverty levels fails to provoke an explosion of struggle, it creates conditions where young workers have no choice but to re-examine the society they face. It is a society that stifles them at every turn.

Only by rejecting the primacy of profits can workers even begin to wage union struggles. Only by developing a leadership that includes more women and more people of color can they represent the most combative workers. Only by expanding beyond the plant can they enlist the forces of other oppressed groupings in the community. Only by going beyond their region can they unite with unorganized workers in parts of the country where the bosses threaten to move. Only by viewing the U.S. workers as a class can they envision a national strike. Only by embracing internationalism can they unite with immigrant workers and understand their common interests with workers around the world.

Only by accepting the goal of ending capitalism and replacing it with socialism can they walk the road to victory.

For a thorough examination of the ideas in this editorial, read the book “Low-Wage Capitalism” by Workers World contributing editor Fred Goldstein.