R Arun Kumar
THE president of US, Joe Biden visited the picket lines of the striking workers on September 26, 2023 and expressed his solidarity. This is big news and should have found a prominent mention in the media all over the world. The president of the most advanced capitalist country and leader of the imperialist pack, expressing his support to workers is after all not a small matter. It shows the power of working class struggle and that of the unions.
Workers of the three big automobile manufacturing companies in the US (and the world) – the General Motors, Ford and Stellantis – have gone on strike demanding an increase in their wages. Looking at it, this would look like a normal industrial dispute bound to take place in any factory, anywhere in the world. The fact of the matter is, this strike is happening after a long time and amidst growing inequalities. According to government data, supplementary poverty measure increased from 7.8 per cent in 2021 to 12.4 per cent in 2023. Inflation, attack on job security and social security add to this background. On top of all this, are the union busting tactics actively used by employers across the US. A strike held in this background, which is continuing till date hence deserves attention.
Prices of food in the US supermarkets have increased by more than 15 per cent since the last year and those at restaurants have soared by ten per cent or more. Similarly, the price of fuel was also increased by private oil giants. The increasing interest rates, a policy pursued by the US Treasury in name of taming inflation, is also hurting workers.
Chairman of the Federal Reserve, Jerome Powell clearly outlined his agency’s mission as: “We have to get supply and demand back into alignment and the way we do that is by slowing the economy…and soften labour market conditions”. What he meant by this is, the Fed would be dragging down the economy to weaken the bargaining power of workers and ‘discipline the workers’. He was in fact following the precedent set by Paul Volcker, a former chairman of the Federal Reserve. He had famously declared his intention as: “The standard of living of the average American has to decline” and to ensure this, he increased the interest rates, which were already at a high of 10 per cent when he took over to more than 17 per cent within six months. Now we are witnessing a repeat of this once again. Interest rates were raised 11 times in the past one year. It is for this reason that they joke that the real seat of power in Washington, DC isn’t the Capitol, but rather the Federal Reserve Bank building!
Volcker has another important contribution to his credit. He played an important role in the destruction of trade unions in the US. He identified the attack on trade union actions as an important component in the efforts to fight inflation. Commenting on the way the then President Ronald Regan crushed the strike of air traffic controllers, he said that this was an ‘important but little-recognised contribution to the fight against inflation’. The same thought process still pervades the establishment. Powell declared that his goal is to ‘get wages down’.
According to a study done by the Economic Policy Institute, US, increased profit margins account for 54 per cent of inflation since the pandemic started, while wages contributed only 8 per cent. Non-labour cost pressures accounted for the other 38 per cent. This clearly shows that it is not a raise in workers’ wages that is leading to inflation. If at all anything needs to be controlled, it is corporate profits. For Fortune 500 companies, 2021 was a great year as it saw an increase in ‘total profits, profit margins, and profits per employee’. Between 2013 and 2022, profits of the big three automakers increased by 92 per cent. This is the kind of economic background in which the automobile giants have called for a strike today.
The United Auto Workers (UAW) is the union of the automobile workers in the US, which is leading the strike. The UAW is demanding a 40 per cent wage increase, reinstatement of cost of living protections to ensure wages keep up with inflation, eliminating the two-tier system for wages and benefits (a Volcker era vestige still continuing) and job security in the background of the transition towards the production of electric vehicles (EV).
The UAW is pointing to the super-profits the automobile companies are earning and rubbishing their claims of ‘economic hardships’. In the first six months of 2023, the three companies together posted a profit of over 21 billion dollars. Mary Barra, the CEO of General Motors was paid nearly 29 million dollars in 2022. Ford CEO Jim Farley gets 21 million dollars and the CEO of Stellantis, Carlos Tavares, gets 25 million dollars. On the other hand, the wages of workers have dropped by over 20 per cent, when adjusted for inflation. According to the data provided by Securities and Exchange Commission, the wage of the CEO of General Motors is 362 times the median GM employee's paycheck!
When the 2008 economic crisis struck the US, the companies forced workers to make some concessions in the name of saving the industries. The workers agreed to forego their cost of living protections and also postponed their periodic wage revision agreement. Even after a decade and half since, the companies are not ready to reinstate the cost of living protections that the workers had agreed to sacrifice then, nor are they ready to give them a deserved wage increase.
Another of the concessions given by the workers in 2008 resulted in new recruits being paid lesser than the veteran employees. The two-tier system introduced in the 1980s intensified during the current crisis, resulting in a difference in wages, health care system, retirement benefits and other social security measures. Now the workers are demanding an elimination of this system by ensuring that the new recruits reach the same pay-scale levels of the veteran employees within 90 days. Workers are also reiterating their right to strike and a fair compensation whenever a plant is shut-down due to various reasons.
A worker in the Adient explained the reasons for the strike: “This struggle is back from 2008 when the union made the big concessions. Finally we decided we will fight for what everybody deserves and get what we need as autoworkers. This isn’t about just UAW workers, it is about the entire working class. We are trying to get where all workers can live comfortable lives and not struggle paycheck to paycheck every week”.
Nearly 97 per cent of the workers have voted for a strike, but due to the decision of the UAW leadership only 3 per cent are actually on a strike. The leadership describes its decision as a new struggle tactic, where certain percentage of workers go on strike and this number would progressively increase, if the management does not heed to their demands. When and where the workers would join the strike would remain a surprise and the companies would keep guessing. These tactics are labeled as ‘stand-up’ strike. Majority of the workers are not happy with these tactics and want the leadership to call for a complete strike to create a much larger impact and force the managements to heed to their demands.
Already the strikers are receiving support from various fraternal trade unions from all over the world. Families of the workers are showing up at the picket lines and standing with the workers. A woman who works in Livonia brought her grandchildren to the picket line as she wants them to know what their grandma is fighting for: “A better life for them and for the future”. People living in the neighbourhoods are also coming out in support of the workers. Some of them got stickers on their cars expressing their support. Workers of various other sectors and unions too are showing up in support of the strikers. Solidarity is expressed by supplying coffee, cookies, donuts, etc., at the pickets.
According to a recent survey conducted by business intelligence firm Caliber, all the automakers have seen significant decrease in ‘several reputational metrics since the UAW strike began on 15th September’. 87 per cent of the respondents stated that they are aware of the strike and are less likely to consider the carmakers products or recommend them to others. Another survey conducted by an agency called Ipsos found that ‘58 per cent of Americans say they support striking autoworkers. 72 per cent of Democrats and 63 per cent of independents share this sentiment, along with 48 per cent of Republicans’. It is this significant support that had forced President Joe Biden to turn up at the picket line and express his support to the workers. He claimed that he is most pro-union president in the history’ of the US. To eat into this popularity, Donald Trump, his predecessor too announced that he too would be visiting the pickets and expressing solidarity with the workers!
Though Biden’s decision to join the pickets has more symbolism attached to it, we should not forget its significance. Biden has announced his decision to contest the 2024 presidential elections. Many unions have endorsed Biden’s candidature, but not the UAW. And UAW is a very influential union in the trade union confederation AFL-CIO. Unions play a crucial role in three swing states – Michigan, Pennsylvania and Ohio. 67 per cent stated that they support labour unions in these three states. To impress the voters of these states, Biden visited the picket lines in Michigan. And remember, Trump is running right behind him, trying to project himself as the champion of working class interests. Trump also had got significant votes from white workers even in the election he had lost to Biden in 2020. All these make it a political compulsion for Biden to visit the pickets. And it is the working class struggles and unions that have forced him to visit a picket.
The workers are not getting completely convinced by Biden’s visit. Dave Ellis, a striker said the visit is just about getting more votes. “I don’t necessarily believe that it’s really about us” said Ellis, who thinks that Trump would be a better president. They have every reason to distrust Biden because the US government is giving millions of dollars as subsidies to companies. Using these as a lever, the government could ask the companies to accept the demands of the workers. It is not ready to do that. During the Great Depression of the 1930s, FD Roosevelt, increased the income tax rates, which were around 90 per cent for the next three decades. This helped the government raise resources from the super rich and introduce social welfare benefits to the working class. The Biden administration is not ready to undertake any such measures.
For every Ellis, of course there are many who are impressed and say that it is “fantastic that we have a president who wants to walk the picket line. And supports workers”. President of a country visiting the workers and supporting their cause is really welcome. Particularly, when we view this from our country, where the prime minister never acknowledges a struggle, forget about taking representations from struggling workers, peasants or any other section of the society. He visiting a picket or a dharna cannot be fathomed even in the wildest of our dreams.
The partial strike of the UAW had not only forced president Biden to visit pickets, but made Ford agree to give up on its two-tier wage system, restore the cost-of-living increases it dropped in 2009, and agree to ‘immediate conversion of all temporary workers to full-time’ and the union’s right to strike over plant closings. Negotiations with the other two are still on. Automobile workers in the US have demonstrated the power of working class. An encore awaits!
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