Monday, August 02, 2010

The crisis of the American working class


Obama and the Democrats are in trouble. Barring some unforeseeable development on a par with Katrina in terms of scale, the GOP is going to romp the mid-terms on a much reduced turn-out. The capitalist media will say that this is because of the Tea Party 'movement', or because the president moved too far to the left in a centre-right nation. Left-wing anger, and the disillusionment of working class constituencies previously supportive of Obama, will be ignored.

Obama's dual constituency in the 2008 election comprised the majority of the working class, and the dominant fraction of big capital, particularly the finance, insurance and real estate industries (the rentiers in other words) who gave Obama $37.5m toward his campaign. In the 2010 mid-term Congressional elections, the signs are that much of the working class component of that electoral coalition will fail to mobilise for the Democrats. This has already been foreshadowed in the Massachusetts by-election, where the core working class vote collapsed - and, of course, the media blamed it on Obama's excessive radicalism over healthcare, despite Massachusetts favouring socialised medicine by a wider margin than most states.

There will be almost no discussion this election as to what has been done, what has continued to be done, to the American working class. The generational stagnation and decline of working class incomes, and the stomach-wrenching fall [pdf] in the share of produced wealth going to the working class, has worsened under Obama's watch. In this recession, bosses have taken the opportunity afforded by the crisis to slash jobs and downsize in a way that is massively disproportionate to the impact the crisis has had on their profitability. David McNally reports:

The best description I have heard comes from an economist who I won't name for the moment because he's a real shithead. But he did nail this one when he said, "What the United States is experiencing is a statistical recovery and a human recession." That's precisely what's happened. A few statistical indicators have moved up, but for the vast majority of working class people, the recession continues.

If you add in the nearly 10 million who are involuntarily underemployed--they're taking part-time work because they can't find full-time work--you've got about 27 million people unemployed or underemployed in the U.S. economy right now. That translates into an unemployment rate of over 17 percent, and for Black and Latino workers, it's an unemployment rate of around 25 percent.

According to the Economist, one out of every six U.S. workers has taken a wage cut in this recession, and amazingly, four out of every 10 African Americans has experienced unemployment during this crisis. Looking at food stamps, an additional 37 million people went onto food stamps in the U.S. in 2009, and 40 percent of those recipients are working for a wage. They're not unemployed--they're simply the working poor that can't make ends meet.

As for the next statistic I'm going to give you, this one was so overwhelming that I did check it to be sure. Half of all U.S. children will now depend on food stamps at some point during their childhood, and the figure runs at 90 percent for African American kids. Imagine that--in the heartland of global capitalism.


The "new normal" is signposted by a catastrophic drop in income in the last year, and a long-term doubling in the ratio of "economically insecure" workers. This intensification of the rate of exploitation is a logical way for the ruling class to proceed, but it may not be good for the system as a whole. A section of the US ruling class is aware of the problem this poses for consumption, and therefore for the system's capacity to reproduce itself. Ben Bernanke argues in a speech published today that depressed wages and incomes, resulting in falling consumption and diminished revenues for local state budgets, is "weighing on economic activity". On that basis, he urges continued stimulus spending at federal and state levels.

In the coming elections, the GOP will naturally bluster about cutting spending, throwing red meat to this astroturf 'movement' they and their business allies have helped create. But few will buy this: the GOP co-engineered and voted for TARP, after all. And any stimulus spending they can attack is pittance compared to the truly astonishing transfer of wealth to the banks, which itself discloses the fatal dilemma posed by the current crisis. This transfer of wealth was not ostensibly just for the benefit of one sector of capital. The whole system in the neoliberal era has been financialised, so that manufacturing and service capital, along with a sector of the actually existing middle class, is substantially dependent on financial revenues. But that transfer really didn't rejuvenate the system, even though the attack on the working class has temporarily boosted profit margins. It just staved off the worst. And now the final act of the transfer, that being the cuts in social expenditure and privatization (the whole thing is an act of accumulation-by-dispossession), risks further slashing spending power and thereby prolonging and deepening the crisis.

However this conundrum is resolved, it will not be in the interests of the working class. David Harvey has written of how capitalists would usually rather retreat behind the flood barriers and watch everyone else get washed away in the deluge than sacrifice some of its wealth to boost consumption and save the system. Only under significant working class pressure do they ever take the latter option, and such pressure is not a significant factor in American political life at the moment. It is certainly not expressed in elections, as electoral insurgencies are very capably and swiftly stamped on by the Democratic Party machinery. The Democrats' hegemony on the working class vote (to the extent that workers vote) may have been eroding, but it has not been successfully challenged from the left since it was first consolidated in 1932. Only the Progressive Party came close, and they didn't come very close. Instead, most workers simply do not vote. It is also true that the Republicans have in the past taken an expanding layer of (esp. white) working class voters, partly on racist grounds as per the misnamed 'southern strategy'. But the main factor - as Kenworthy et al [pdf] have shown - is the disorganisation and de-unionisation of the working class since the 1970s, which led to millions of workers seeking individualist solutions to their material needs, sometimes identifying with a conservative agenda of low taxes as being more advantageous to their immediate economic wellbeing than social spending.

The main problem for the American working class is not a lack of class consciousness. It is the weight of the accumulated outcomes of successive class struggles over several generations. At each phase, workplace organisation has been smashed, left-wing political movements broken up and the remnants coopted. Chris Hedges argues that America needs a few good communists, and he's right. But a few won't cut it, and they won't be sufficient unless there's a movement of working class militants they can relate to. What do I mean by 'militants'? Well, a militant is a worker who has experience of dealing with management, who has learned how to stand up to them and how to protect her rights as well as those of her co-workers, and who has learned the need for a strategy, for planning, for meetings, for leafleting and so on. There are such people in America, but there aren't enough of them, because the strength of the ruling class has hitherto been such that being a militant, or being organised politically in any way, can be unrewarding and often downright hazardous. However, if this crisis continues to see a weakening in the global power and cohesiveness of the US ruling class there will be opportunities for a renaissance in the labour movement. Every US worker should be praying for the fall of the empire, and the opportunities it will bring. And then the conversation will change, and we won't be hearing about how Obama, the president of Goldman Sachs, is too left-wing for such a conservative country.