Labor Day 2009 Review
1882 Labor Day Parade, Union Square, New York City
by Bill Onasch
September 7, 2009
Today is Labor Day in the USA and Canada. While many of us will enjoy celebrating the holiday with friends and family, it is, without a doubt, the grimmest in living memory in terms of conditions and prospects for the working class. In what has become an annual tradition for us we step back from our normal Week In Review to reexamine what has unfolded over the past year and speculate about what’s in store for our future.
The Financial Crisis
Last Labor Day the Dow-Jones Industrial Average was still riding fairly high at 11,220 despite some concerns about the housing bubble, problems at banks such as at Bear Stearns, and a possible recession. The chart below shows its movement since.
Maybe, like me, you don’t personally own any shares. But most pension funds, 401(k) and IRA accounts are heavily invested in stocks. The plunging Dow wiped out much of what American workers were counting on for retirement. We were not nearly as rich as we were led to believe. We can be thankful Wall Street looters never succeeded in getting hold of our Social Security as well.
Last Labor Day was marked by another milestone measure of fictitious wealth--U.S. housing prices had declined by over 20 percent from their mid-2006 peak and adjustable rate mortgages were beginning to kick in with sky-high interest rates. Many who were counting on the equity value of their homes now found them to have zero or even negative worth. Since then, of course, the housing crisis has become even worse, setting new records for foreclosures and contributing to a surge of personal bankruptcies.
Not just home owners were affected with the burst of the bubble. Mortgage backed securities were in deep trouble. A week after last Labor Day, when we were getting acquainted with Sarah Palin on Saturday Night Live, most were shocked to hear that the government had seized control of the odd couple mortgage lenders Fannie Mae and Freddie Mac. 200 billion tax-payer dollars were injected in to the shaky giants. This has been retroactively designated as the beginning of the financial crisis.
The cascade of default was soon augmented by all forms of derivatives–the most fictional of all wealth. The principal insurer of credit default swaps–AIG, the biggest of all underwriters–went bust. Over the next five weeks Treasury and the Federal Reserve Bank scrambled to rescue AIG through “nationalization,” forced shot-gun mergers on Merrill Lynch, and Washington Mutual--while allowing venerable Lehman Brothers to go down the tubes.
Les Leopold, in his excellent book The Looting of America, commented,
“At least a trillion dollars was handed to big bankers in 2008 and 2009, with very little debate. This is borrowed money that we, the taxpayers and our children, are on the hook for. It’s an immediate transfer of wealth from present and future generations to the largest financial institutions in the world. It may well be the largest wealth transfer since African-Americans built the South. We went along because the financial markets had a gun to our heads. No bailout, no lending. No lending, no economy.”
When President Obama took office he didn’t turn to economists who had been critical of deregulated speculation in derivatives and the sub-prime mortgage scams, such as Dean Baker. He relied on the same bipartisan cabal who had long resisted government interference in “innovative” financial practices. He chose to keep Bush’s Fed chair Ben Bernanke–who believes Roosevelt’s New Deal prolonged the Great Depression--on for another term.
Last Labor Day the official U.S. unemployment rate was a disturbing 6.1 percent. The latest figure this Labor Day is 9.7. The current “real” rate–including unemployed, plus all “discouraged,” and temporary and part-time workers who want full-time regular jobs–is 16.3 percent. The average work week has been hovering around 33 hours for most of the past year. Seven percent of the workforce holds down two or more part-time jobs.
Recent small increases in manufacturing output have not stopped the hemorrhaging of jobs much less created new ones. Labor productivity has increased as a result of squeezing more work out of existing workers. Even if orders for goods increase substantially there is much slack that can be taken up in returning to a normal work week–even overtime–and utilizing temp workers, before any new hiring can be expected. That’s no where in sight at the present.
Recently even the public sector, which has tended to grow even in times of recession, has started taking major hits in layoffs, “furloughs,” and reduced work hours. States including California, Hawaii, New Jersey, and Rhode Island, along with major cities such as Chicago, Philadelphia, and Detroit, have been particularly hard hit. Public sector employers are also imitating private sector bosses in demanding wage, benefit, and work rule concessions.
One more thing to keep in mind about the mass unemployment: the abrupt curtailment of payroll deductions poses a serious challenge to the functioning of Social Security and Medicare just as the “baby boomers” are ready to claim their benefits.
Last Labor Day the Republicans were blasting Obama as being for “cut and run” in Iraq and belittling his lack of experience in “security” matters. The peace movement embraced–and still mostly embraces-- Obama as the leader they had been praying for. Protests against the wars/occupations in Iraq and Afghanistan are today only a small fraction of their size under Bush.
Subsequently Bush in his final days negotiated the “timetable” plan that Obama had advocated for Iraq. Obama retained Bush’s Secretary of Defense and has greatly escalated the war in Afghanistan, spilling over in to Pakistan as well. The ranks of the Army are being increased and there are even more U.S. paid contractors in the war zones than there are GIs.
US Labor Against the War has organized antiwar resolutions to be presented at next week’s AFL-CIO convention and has arranged a convention appearance for representatives of the Iraqi trade union movement.
While preoccupation with the tanking economy is understandable an even more serious crisis–the most challenging to yet confront humanity–is developing with alarming velocity. Climate change, mainly due to greenhouse gasses produced by the burning of fossil fuels, is advancing much faster than the most pessimistic expected only a year ago.
We are already seeing some sneak previews of what to expect in areas plagued with long-term drought such as Australia, Mexico, the eastern Mediterranean–and much of the western United States and Canada. For example, in past weeks inevitable wild fires in tinder dry areas have threatened cities such as Los Angeles and Athens.
At a time when shifts in the Earth’s axis/orbit should be further cooling the Arctic it is warming, and melting--for the first time in at least 8,000 years. The temperature of the Earth’s oceans is the highest ever recorded. Repercussions from these ongoing events will lead to more droughts in some areas, flooding in others, and a rise in sea levels threatening the homes of hundreds of millions around the world–including the USA.
Clearly these results of global warming will mandate big changes in the way we work and live. The only question is whether or not we will utilize a shrinking window of opportunity to stop this human made crisis while we can still maintain quality living standards for future generations.
Since the principal cause of climate change is burning fossil fuels the solution is simple–quit burning them. Science has not only been predicting gloom and doom; they also have developed clean, renewable energy technologies that can rapidly replace the need to burn coal, oil, and gas. Implementing this change would be the biggest job creation project in history. Tackling the crisis really comes down to economic/political solutions to utilize science.
China has now captured the lead in volume of greenhouse gasses produced. But the good old USA is still out in front in per capita carbon emissions. And much of China’s fouling of our biosphere is the result of offshored production for the U.S. market.
A year ago the Republicans were reaffirming the global warming denial of the Bush administration and were chanting “drill baby, drill!” In that context it didn’t take much for Obama to assume the mantle of green crusader. And not much is what we have seen.
The linchpin of the Democrat climate/energy bill passed in the House is discredited cap-and-trade. Free permits would be granted to the worst corporate polluters for up to ten years.
The administration promotes a resurgence in nuclear power despite no known way of safely dealing with spent fuel that remains deadly for millennia.
Washington has also tried to save the struggling scam of biofuel, gives credibility to the fraud of “clean coal,” has eliminated obstacles to mountain top removal, given its blessing to more offshore drilling and has approved the 959-mile Alberta Clipper pipeline from the disgraceful tar sands of Alberta to Superior, Wisconsin.
And, just in time for Labor Day, the President’s adviser on “green jobs,” also serving as a liaison to labor and environmental groups, Van Jones, had to fall on his sword after a loony right campaign proved he had once made crude references to Republicans in congress.
Our First Was Hopeful
This is our tenth Labor Day since we launched the kclabor.org website in March, 2000. Not all have been so gloomy as this one. The first one was full of hope.
Long time public interest advocate Ralph Nader was opening what would prove to be the most serious electoral challenge to the twin boss parties since the days of Debs. He invited his long time friend and collaborator, Tony Mazzocchi, to deliver a major talk to the Green Party nominating convention. Speaking about the Labor Party, who were not running or endorsing anyone, Tony’s speech was entitled, We Are Unabashedly a Class Formation. The Green delegates were so enthusiastic about the Labor Party perspective they voted to incorporate not only the party’s Just Healthcare campaign but the entire Labor Party program in to their platform.
Nader went on to speak to rallies often numbering in the thousands and won endorsement from the UE and the California Nurses Association. Despite shoe string funding, inexperienced volunteer committees assembled on the fly, and numerous challenges to his ballot access, Nader received nearly three million votes. Dozens of Green candidates rode Nader's coat tail to electoral success for local offices.
This should have been an example worthy of attention by organized labor. Had the unions chosen to follow it, with their hundreds of millions of dollars, thousands of full-time staffers, and tens of thousands of stewards and local activists at their disposal, today we’d likely have a labor party seriously vying for power and the Democrats would be trying to justify their third party existence. But, paradoxically, this promising assault on ruling class monopoly of American politics proved instead to be an enormous setback for independent working class political action in the United States.
Scapegoating the ‘Spoiler’
After the Florida fiasco, that awarded runner-up Bush the White House, the Democrats, union bureaucrats, and mainstream environmental leaders all focused the blame not on the Republican thieves–but on Nader “the spoiler.” Not only Nader, but also Tony Mazzocchi and the Labor Party started getting treated as pariahs. Even the Greens seemed shocked and repentant about the fact their votes may have affected the outcome. In 2004 the Greens adopted a two pronged approach–only vote for our candidate in states where it won’t matter; in contested states vote for Democrat Kerry.
Finally Rewarded With Triple Crown
After eight years of vainly seeking anybody but Bush, last Labor Day our labor statespersons were enthusiastically rallying around an energetic, photogenic, silver-tongued candidate who could finally lead them out of the wilderness. They threw more money and people than ever in to the 2008 election and it was mission accomplished at the end–a strong Democrat majority in the House; a filibuster-proof majority in the Senate; and the biggest prize of all–the White House.
Shortly after the election the Obama campaign made the somewhat exaggerated claim their victory was so broad and inclusive that they were not beholden to any particular group. That was their diplomatic way of warning their indispensable labor supporters not to get too pushy. Such caution was hardly necessary for our leaders had a quite modest agenda:
• Pass the Employee Free Choice
• Enact comprehensive health care reform.
• New immigration legislation with a “path to citizenship.”
• Spend some money for jobs.
Of those four top objectives, all endorsed at one time or another by President Obama, only one has been partially achieved–the emergency “pick and shovel” part of the 787 billion dollar stimulus allotted to states, cities and pet industries.
Top priority EFCA, at least in its original form, is toast. Reporting on an interview with John Sweeney New York Times labor reporter Steven Greenhouse said,
“The AFL-C.I.O’s president has signaled a significant shift to try to move a long-stalled pro-union bill, saying he would support a change that calls for speedy unionization elections, a provision that would replace the much-attacked card-check provision.”
Ever optimistic Sweeney predicts action on a revamped EFCA this year–right after health care reform.
Although hundreds of unions are on record for Canadian-style single-payer, Sweeney, and Change to Win rival Andy Stern, have instead supported Obama’s health care reform–whatever that may be. The President has promised to finally spell out what he wants in legislation in a rare speech to a joint session of congress shortly after Labor Day. Any health care “reform” ultimately passed will almost certainly be minus the “robust public option” previously insisted on by labor.
Immigration reform legislation has not yet shown up on early warning radar. We have not seen the massive workplace raids that characterized the final years of the Bush administration. Instead the Obama administration has been energetically enforcing E-Verify. Employers are notified by the IRS of workers with improperly matched Social Security numbers. Bosses continuing to employ these workers are vulnerable to criminal prosecution. As a result, thousands of immigrant workers–many of them union members–have lost their jobs and been driven underground. Just the week before Labor Day 1500 immigrant workers were fired at American Apparel in Los Angeles as part of Washington’s E-Verify crack down. And, of course, the President has assured all that “illegal” immigrants will be excluded from any health care reform.
From Bush’s In-Your-Face to
A lack of action on labor’s legislative agenda doesn’t mean Obama has neglected the unions. Quite the contrary. One of his first major actions was to take control of General Motors and Chrysler as the price of a bailout to save them from the threat of collapse. Part of the deal was to demand “shared sacrifice” by the UAW, including acceptance of a completely revamped contract. The Tory government in Ottawa gratefully adopted the same template for whipping the CAW in line as well.
The result of the Obama-Harper reorganization of North American auto was the single biggest defeat for the working class in these country’s history. In one blow tens of thousands of GM and Chrysler jobs were eliminated with collateral casualties running well over 100,000. Pensioners lost benefits. For those UAW and CAW workers still lucky enough to have jobs wages were cut, benefits were reduced, work rules were altered, and strikes were prohibited until 2015.
No Republican could have gotten away with all this without at least verbal denunciation if not a real fight. In Europe, unions responded to auto cutbacks with massive strikes, demonstrations, plant occupations, and occasional holding bosses prisoners in their offices. In Korea auto workers sometimes battled cops and scabs with Molotov cocktails.
But on this side of the Atlantic, where the employers are usually addressed by our leaders as “partners,” there were no such disturbances. Riding on a wave of adulation from all “progressive” forces, Obama showed himself to be a man of bold vision. By first humiliating and house breaking the historically most powerful industrial union those with less clout could be expected to fall in line. And so they did. Not only was there no criticism of the devastating restructuring of auto; Obama was praised for “saving” the American auto industry and hailed by virtually all labor leaders as the savior who would restore the “middle class.”
The President has announced that his point man in auto restructuring, Ron Bloom, will now be a “czar” for the whole manufacturing sector. Bloom is accompanying Obama to speak, along with Sweeney and Rich Trumka, at a Labor Day event in Cincinnati. Next week Obama will address the AFL-CIO convention. Trumka, who will replace the retiring Sweeney there as fed president, was asked by Steven Greenhouse to grade Obama. The one-time mine workers leader replied, “ He gets an A for effort, and an incomplete for results.”
Obama tried to follow up on this first test of fealty around auto, that the union bureaucracy passed with flying colors, by using David Bonior to broker a unity that would allow labor to “speak with one voice.” Of course, the voice would not be theirs but the ventriloquists in the White House. Leaders of the top AFL-CIO and CtW unions, plus the NEA, were recruited.
In July these eager but humble apostles, now dubbed the National Labor Coordinating Committee, were granted a rare audience with the President himself at the White House, moderated by Bonior and Labor Secretary Solis. Afterwards they issued a statement that shocked no one,
“We spoke with a unified voice today to the president as we discussed progress on issues that are so important to working families, including the 16 million working Americans in our unions...We are working hard with Congress and the president to win health care for every American. We support a robust quality public plan option...We also talked about the Employee Free Choice Act, which will restore the middle class by giving workers the choice to bargain, not borrow, their way to a better life. We look forward to its passage....”
While there is no question about the vitality of spirit for grand unity to march lock-step with Democrat “friends” the bureaucratic flesh appears too weak to be grafted. Stern’s SEIU is in take no prisoners wars with UNITE HERE and the National Union of Healthcare Workers. While other Change to Win unions have moved away from Stern jurisdictional disputes, and long standing factional scores still unsettled, make their reuniting with the AFL-CIO unlikely.
Does Intelligent Life Exist
In Labor’s World?
If these shenanigans of the top echelon were all the labor movement had to offer we’d have to change our status report from grim to hopeless. Fortunately there are other encouraging examples to report over the past year.
In our December 14 Week In Review we touched on two of them. Commenting on the sit-in at Republic Windows in Chicago we said,
“For about a week, the 240 workers at Republic were in the top headlines throughout the world. They not only attracted attention but struck a chord of sympathy and solidarity with workers elated to see somebody fighting back against bosses and bankers. The popularity of their struggle kept the forces of ‘law and order’ at bay. Politicians found it prudent to cheer them on. And, at the end of the day, the stone hearted Bank of America and JP Morgan coughed up 1.75 million dollars to make the workers whole for their severance.”
Subsequently another buyer for the plant was found and the workers continue under their UE contract. The Local has learned to give as well as receive solidarity support, working closely with their embattled UE sisters and brothers taking on Wells Fargo at Quad City Die Casting in East Moline, Illinois and supporting S-K Tools strikers in Teamsters Local 743 in Chicago fighting against cancellation of their health insurance without notice.
In that same WIR we reported on the historic UFCW organizing victory at Smithfield in Tar Heel, North Carolina, the world’s biggest hog plant. Later they won their first union contract.
Some other positive accomplishments of note include:
• Labor Notes Troublemakers Schools in New York, Chicago, and the Bay Area, each attracting at least 200 labor activists eager to discuss the new challenges ahead.
A much smaller conference was organized in Kansas City in partnership with Labor Notes. The emphasis here was the need to have a combined, just transition approach to both the economic and environmental crises.
Labor for Single-Payer
A worthwhile project that has stirred up this important health care fight within the union movement.
• US Labor Against the War
USLAW is one of the few bright spots within both the labor and antiwar movements.
• The Celebration of the 1934
The commemoration of this historic labor turning point helps today’s generations to reclaim the lessons of past victories.
• The publication of three important books:
The above mentioned Looting of America by Les Leopold.
Staley: The Fight for a New American Labor Movement by Steven K. Ashby and C.J. Hawking, an exhaustive study of an important mid-90s struggle in Decatur, Illinois where a wide range of strategy and tactics were tested in life.
Embedded with Organized Labor by Steve Early A remarkable collection of articles and reviews over the years by a labor activist who always seems to manage to be where the action is at.
These examples and resources provide a framework for educating and rounding up those working class fighters, inside unions and unorganized, who are looking to reverse our grim fortunes. It is this promise of a future rejuvenated movement that keeps our realistic assessment of the gloomy present from sinking in to despair.
A happy holiday to all!
The webmaster of the kclabor.org website is a paid-up member of UAW Local 1981—the National Writers Union. During the 70-80s, while employed at Litton Microwave’s Minneapolis operations, he was elected to various positions in UE Local 1139, including Shop Chairman and Local President. In 1980 he took a union leave from the plant to work on a successful UE organizing drive at a Litton runaway plant in Sioux Falls, South Dakota. When Litton began shutting down its four Minneapolis plants Onasch was selected to be a worker representative in a Dislocated Worker Project administered by Minneapolis Community College—where he became a member of the Minnesota Education Association. Returning to his home town of Kansas City in 1989, he soon began a 14-year stint as a Metro bus driver. During that time he published a rank and file newsletter, Transit Truth, chaired a union Community Outreach Committee that organized public protests against cuts in transit service, helped organize a privatized spin-off at Johnson County Transit, and served a term as Vice-President of ATU Local 1287. He has also been involved in US Labor Against the War and the Labor Party since those organizations were launched and represents Midwest chapters on the Labor Party Interim National Council.
KC Labor Home
Daily Labor News Digest