November 05, 2023

The Power of Workers in the Fight against Capital

R Arun Kumar

THE power of the automobile workers in the US prevailed over the might of the capital. The “stand-up’ strike which lasted for over a month long, was called off  after their trade union, United Auto Workers (UAW), reached agreements with the three automobile giants: General Motors, Stellantis and Ford. This is a major victory for the workers and once again demonstrates the power of the working class. The victory is all the more significant, given the renewed offensive of the capital on the rights of the working class.

As detailed in a previous issue of PD (October 01, 2023), nearly 50,000 workers of the world's largest three automobile manufacturers went on strike demanding an increase in their wages, the restoration of bonuses and other welfare measures that were cut during the pandemic, and higher pensions. The striking workers forced even the US President, Joe Biden, to visit their picket lines and express his support. Not to be left behind, former president Donald Trump also made a beeline to visit the pickets, but the workers refused to meet him. These visits were because the workers had garnered the sympathy and support of nearly 60 per cent of US citizens.

After extensive negotiations with the manufacturers, the union successfully secured an agreement that provides for a 25 per cent wage increase, an immediate 11 per cent signing bonus, and the reinstatement of cost of living adjustments (COLAs). This nearly matches the workers' initial demands. All the workers who would be employed in the electric vehicles manufacturing units that would be started in the future will be made part of the centralised union contracts. This means that unions will have the opportunity to represent the interests of these workers too as and when the factory starts. Previously, the contracts only applied to existing factories, and corporations argued that allowing unions in new factories, especially those related to EV vehicles, might lead to a shift in production to other countries, potentially resulting in job losses in the US. These designs have, for the time being, been averted.

Another significant victory for the workers was the agreement to expedite the elimination of the two-tier system for workers. The two-tier system involves differing pay structures for permanent and temporary workers performing the same tasks in the factory. Under the previous contract, the manufacturers had pledged to phase out these disparities over an eight-year period. Using the pretext of the pandemic, they attempted to maintain the practice of hiring temporary workers and institutionalising this form of differential employment. However, with the strike and the new agreement, this practice will be discontinued within three years. The agreement also mandates the manufacturers to raise pensions for retired workers.

On top of all these developments, just on the eve of the strike, Stellantis closed one of its units, resulting in the loss of jobs for 1,200 workers. However, with the strike's success, not only is the plant being reopened, but these 1,200 workers are being rehired, and it is promised to create an additional 1,000 jobs. In summary, Stellantis had initially planned to cut nearly 5,000 jobs across all its units, but it has now agreed to generate 5,000 new jobs instead.

The agreement will now be put to a vote before all the workers employed in all the units of these three automobile manufacturers. This means the 57,000 workers at Ford, the 43,000 workers at Stellantis, and the 46,000 workers at General Motors will discuss this agreement. They have to ratify the agreement before May Day 2024. After that date, the agreement will take effect and will be again up for renegotiation in 2028.
The significance of this victory becomes even more pronounced when we consider the economic and political context in which it was achieved. For one, proponents of neoliberalism are spreading misinformation in the name of curbing inflation, falsely attributing that increasing wages of workers is the cause of inflation and hence they be reined in.

Very recently an Australian billionaire Tim Gurner declared that "arrogant" workers needed to be tamed, and to do that ‘unemployment’ has to rise. He stated, “We’ve got to kill that attitude among ‘arrogant’ workers. And that has to come through hurting the economy”.  He argued that the pandemic made the workers lazy and they are ‘expecting more than they do’. “They have been paid a lot to do not too much in the past few years, and we need to see that change”. In order to discipline workers, he wanted unemployment to rise to 40-50 per cent. “We need to remind people that they work for the employer, not the other way around”.

And he is not alone. Kokou Agbo-Bloua, an economic analyst stated: “The central banks need to trigger a recession to force unemployment to pick up and create enough demand destruction”. Further: “The labour market is super tight and you have lower labour productivity growth which now is pushing unit labour costs and you get this negative spiral of wage prices”. This means, he too wants a rise in unemployment, as the ‘workers are not working hard and their wages are cutting into the profits of the employers’. The same arguments were made by Jerome Powell, the chairperson of the Federal Reserve of the US and also Paul Volcker, his predecessor.

In fact, on the contrary, an analysis from the Kansas City Federal Reserve found that in the year 2021, a whopping 60 per cent of price increases in the US economy were solely due to increasing corporate profits. The same trend continued through 2022, with profits hitting record highs and this is true even for Canada and Europe. All this is being done while the workers’ wages have not seen any increase in the recent past, first in the name of economic crisis and then in the name of pandemic. To reiterate once again, the wage of the CEO of General Motors is 362 times the median GM employee's paycheck! It is for this reason that the rich are growing richer and the poor, poorer. As Marx had stated: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery…at the opposite pole”.

Two, there is an intense attack on the rights of the workers everywhere in the world. In the name of labour reforms, workers right to unionise, right to strike and negotiate are sought to be curtailed. In the United Kingdom (UK), the Conservative government has introduced a Strikes (Minimum Service Levels) Bill 2023, which is aimed to curb strikes, particularly in the transport sector. This is considered to be the most anti-worker and anti-union legislation in the last over 100 years. Similar legislations are either in the process of enactment or have been already enacted in various developed and developing countries. We have witnessed huge struggles waged by the French workers against the labour and pension reforms introduced by the Macron government.

In the United States, the union busting efforts of giant corporates like Amazon and Starbucks are well known. These efforts are stepped up by one notch in the recent period. Showing a tweet in solidarity with Palestine posted by one Starbucks employee in a unionised store, the management has joined hands with all those who are demanding the closure of stores where unions exist. The Orthodox Jewish Chamber of Commerce alleged that the ‘stores are run by the union and their employees who support Hamas’ and released a list of several hundred unionised Starbucks locations across the US which it wants to be boycotted. Hate is being spread by such organisations with statements as “Drinking a cup of Starbucks is drinking a cup of Jewish blood!”

The management of the Starbucks responded by sending an internal mail condemning Starbucks Workers United (SBWU) and its membership, claiming the union was associated with “acts of terrorism, hate, and violence”. It has ordered the union to change its name and filed a suit against it claiming copyright infringement – the union has Starbucks in its name!
The SBWU immediately responded to this attack stating that the Starbucks is “taking every chance it gets to bash its employees as supporters of hate and violence without any concern for truth, or consequences”. It further stated that the management wants to incite ‘fear and workplace violence against employees’, and is “using the…global tragedy against its own employees”. This is being done illegally to fire union workers and close union shops.

Instead of being cowed down by the management, the SBWU came out with a statement in solidarity with Palestine. 96 per cent of its members endorsed the statement, which now becomes the official voice of the entire workforce in Starbucks, rather than that of a single worker who had tweeted.

This entire episode once again highlights the impact of political developments on workers and their rights. The right-wing assault on workers' right to unionise attempted to exploit the threat of Zionists to suppress the unionisation efforts at Starbucks. However, the workers did not cow down, and openly expressed their support for Palestine and confronted the power of capital.

These developments show us that capital always tries to use any means available to break working class unity and launch an attack on their rights. It has no tolerance for trade unions, let alone broader class unity. As the ruling class of the State, it does not hesitate to resort to force, both physical and ideological.  Police and divisive politics of hate are weapons in its two hands. The growth of right-wing politics, racism, sectarianism (and communalism in our country) are all put to its service for breaking class unity.

However, from the above experiences, we also learn that the working class is equally capable of thwarting these attacks. If the working class is suitably equipped with political and ideological consciousness, it would not only defeat all such machinations of capital but can also move to shake the very foundations of its existence. History is witness to this potential.