The Neoliberal Metamorphosis: Worker’s Power Today

For the major part of the last four decades, the common narrative on the Left has been that worker’s power, particularly in the United States, has become a thing of the past: swept away by the neoliberal project of the ruling class. The idea is that, preceding the economic recession of the late 1970s and early 1980s, the US government abandoned the ideology of Keynesianism (regulation to ensure jobs, a robust social services sector, etc) for one of unfettered free market capitalism. Flowing from this ideological shift came deindustrialization, deregulation, free trade, and the like. The consequences of this were twofold. First, it led to the outsourcing of production to the global south in search of cheap labor. This resulted in the second consequence, which was the loss of five million jobs in the United States, many of them good-paying union jobs. This resulted in a decline of organization and militancy within the working class, meaning that there could be no hope for radical politics which put them at the center. Finally, the argument goes that an interconnected and dispersed service economy made of low-paying precariously-secured work emerged, which disincentivized struggle. For most in this era of barely getting by, struggling against the bosses is a good way to get replaced by the next person in line for the job. This is especially true given that a large chunk of the labor force is made up of immigrants, who risk being deported if they attempt to unionize. This lack of organization and loss of direct relations to the means of production, some argue, means that the majority of workers in the US cannot be considered part of the traditional proletariat as Marx conceived of it.

On the other hand, higher paid workers (teachers, nurses, tech workers, and so on) are considered “bought-off,” their class consciousness nullified by their privilege of decent wages and dignified working conditions. Some would argue that because of the sharp distinctions between these two kinds of workers, they can no longer be considered part of the same class.  From this line of thinking, the idea idea of the “precariat” class has emerged: a class whose existence is characterized by insecurity, a lack of collective bargaining power, and distance from traditional forms of working-class organization.

We have also entered a period in which there has been a resurgence of socialist ideas: a rejection of the exploitative relations of capitalism and a belief that a new society must be built. A major question that the left must grapple with is: who will build this new society: the working class, the precariat, or some other social force entirely?

My hope in this essay is to convince you that, despite all the changes in the economy brought about by neoliberalism, the working class, in the traditional Marxist sense, is still the key to transforming society. To do this, I must unpack the ideas described above, figuring out what is useful, what is harmful, and what needs to be improved upon. I will begin with an explanation of these neoliberal changes, and end with an analysis of what this means for working class power today.

First, I would like to argue that the United States was never deindustrialized. It is true that between the early eighties and the two thousands, geographic shifts in production increased. But insourcing to the US through foreign direct investment actually exceeded outsourcing during this period overall. Manufacturing employment in the US is, admittedly, at an all-time low of nine percent (9%) [1]. However, this has been a long-range trend since its height in 1900. No reasonable radical would claim that the working class did not have revolutionary potential in 1917, despite the fact that manufacturing employment was declining during this period as well. On the same note, manufacturing was only twenty-seven percent (27%) in 1980 [2]. Decline in manufacturing as a percentage of the total employment is a general trend, not at all indicative of the need to move away from the working class as the primary agent of change in society.

This next point is key: While manufacturing jobs are far fewer in number than they were in the past, US manufacturing workers are producing far more than ever. From 1982-2007, manufacturing output in the US actually grew one hundred thirty-one percent (131%) [3]. This escalation of productivity has been accomplished not by the bosses finding a way around the need for workers at the point of production, but by working them harder for less. Today, manufacturing is by far the most profitable sector of the US economy. According to the Economic Policy Institute, manufacturing in 2013 directly contributed over two trillion dollars to the US economy. Taken alone, this would make US manufacturing the third-largest economy in the world [4].

Despite this incredible amount of increasing productivity, wages have stagnated. Compared to an overall 64.9 percent growth of economy-wide productivity between 1999 and 2012, wages have only increased 8.2 percent for non-supervisory workers [5]. Workers are being paid far less than the amount the produce, even within an unfair wages system. This leads, as Marx predicted, to an immiserated working class. One third of full-time factory workers are on some form of public assistance, [6] and sixty-two percent (62%) of Americans would have difficulty covering an emergency expense of one thousand dollars or more [7]. Marx’s idea that society is based on the power of the producers remains true today. There is still a strong base of factory proletarians in the United States, and these proletarians are still exploited.

All socialists agree that worker’s power stems from the capitalist’s dependency on their labor. But their ability to flex that power is dependent on their consciousness of it, as well as the level of organization that is present in the class. Understanding the loss of this organization helps to clarify why this power lays mostly dormant today.

The recession of 1974-75 was, indeed, a U-turn moment for global capital. Due primarily to years of falling rate of profit and compounded by rising inflation, a very messy monetary system, and the OPEC crisis, the 24 richest countries saw their growth rate fall from five percent (5%) in 1973 to zero percent (0%) in 1975 [8]. The recovery and acceleration of productivity that was to follow would be achieved by an employer offensive through the crippling of labor unions in order to pave the way for the long-term compression of wages coupled with an intensification of work. Unlike the employer offensive of 1958-63, in which unions stood their ground, labor buckled under the new economic and political challenges of the late 1970s. While the 60s-70s was a period of labor victory, it was also a period of major internal union struggle between the leadership strategy of labor-management cooperation and the combative tactics of the rank and file. The recession weakened the rank-and-file even further, making them too economically insecure to simply stage a wildcat strike and get the bosses to bend. As a result, the mass of workers was increasingly dependent on a labor-aristocratic union leadership that had grown comfortable as lackeys of the bosses and was thus unwilling to fight against them. Union militancy, needless to say, was in sharp decline. This period saw the loss of 2.2 million union jobs in eight labor strongholds, a twenty-six percent (26%) loss of union density [9].

With unions weakened, the ruling class was able to undertake a restructuring of production that could not only restore profits to pre-recession levels, but elevate them to new heights. The project required geographic shifts in production, decentralization of production through the creation of regional supply chains, and mechanisms of labor rationalization such as lean production, which I will discuss in more detail later.

Outsourcing across the US border remains a significant feature of this restructuring, but we ought not ignore the shift in production from the North to the South. This is the case for two reasons. Firstly, about ninety percent (90%) of US manufacturing jobs are still located in the United States [10]. They did not disappear, they simply moved elsewhere inside the United States. In this case, the “elsewhere” is the Southern United States.

As Kim Moody argues in her book In Solidarity, the failure to unionize the South after World War Two opened the door for the creation of a competitive, low-wage region of American industry [11]. The wage differential between the growing Southern manufacturing states of Georgia, North Carolina, and Tennessee was fifteen percent (15%) lower than Northern manufacturing states like Michigan and Illinois [12]. The smell of profits wafting from the South was irresistible to the bosses.

As the North saw the destruction of billions of dollars of capital, smaller decentralized firms were opening in the South. By 1997, Tennessee was the fourth largest auto-producing state in the country [13]. The South’s share of production grew from twenty-one percent (21%) of the economy in 1980 to thirty percent (30%) of the economy in 2000 [14].

Increasingly, less production was being done in-house. Rather, production was being organized along regional and global supply chains. Japanese, European, and American auto firms located plants  in the South along interstate highways. Big companies were outsourcing many parts of the production process to smaller firms along these interstates and beyond to global destinations. Production along these regional supply chains required, and still requires, lock-step coordination of worker output. Evidence of this can be found in  US Census Bureau statistics, which show that from 1992-2012, the amount of workplaces with more than five hundred workers actually increased [15]. This number did drop in manufacturing, it only did so by one percentage point. This is hardly the paradigm shift that is usually implied. What this means is that, in addition to remaining exploitative, factory production in the US retains a concentrated, social character. Workers have not lost their connection to each other or to the system of production. This is a fundamental basis for communist revolution.

Equally as important as regional shifts into ever more concentrated areas was the actual restructuring of production on the shop floor: the development of new innovations to intensify work. The description of this reorganization is often reduced to automation. Automation has been key in disempowering workers, but its importance should not be overstated. Rather, we should see automation as part of the growing dominance of the lean production model mentioned above. Through management oversight of the labor process, lean production is about accounting for every second of a worker’s time, developing ‘teamwork strategies,’ and other methods used to constantly tighten the ship. Bosses came to control an increasingly large portion of the worker’s activity, even drafting manuals that show workers how to move their arms during the labor process. The 45-second-minute in auto (the standard of 45 seconds of work for 15 seconds of rest), was increased to a staggering 57-second minute [16]. Many workers in poultry processing plants have been forced to wear diapers so they can relieve themselves while on the assembly line [17]. Quite literally, bosses control the vast majority of a worker’s time. Given that workers are increasingly being robbed of their autonomy on the factory floor, we can safely conclude that production still maintains the alienating character that communists seek to build upon when organizing.

We can conclude from all of this that manufacturing still exists in the United States, and retains all of the central characteristics that Marx identified in his critique of capitalism. Neoliberalism has brought about great changes in American Capitalism, but these changes are not so great as to invalidate the Marxist conception of the industrial working class. Clearly, this class remains a force that has the power to change society.

I would argue that the changes to capitalism brought about by neoliberalism actually increase the power of the industrial proletariat. One aspect of the restructuring discussed above has been that the production process has been broken up. Regional production lines do not produce complete goods, as they generally did in Marx’s time. Now, they produce various component parts that must be assembled at some other point. When parts production is taken into account, gross manufacturing output triples to 5.9 trillion dollars [18]. To put this in perspective, that number is more than one third of US GDP [19]. Manufacturing workers, while far few in number than they were in the past, directly produce far more profit for the ruling class than they did in the 1970s. Therefore, those workers have an astounding amount of economic power.

Further, because of the fragmentation of production, a strike by workers at one factory has the potential to decimate the profits of the capitalist class to a far greater extent than it did in the past. One example of this is the 2014 strike of seventy workers in Toledo, Ohio that produced brake systems for Jeep Cherokees. The fact that the bosses relented after just eight hours of strike action gives us a sense of how quickly strikes at a part supplier can disrupt regional and globalized production lines [20]. If workers in a factory from here to China refuse to stop producing any one of the individual parts of an iPhone, unfinished goods sit useless on the assembly line. This hits the bottom line of the capitalist hard. Workers are more connected, and more powerful economically than ever before. In this sense, the changing landscape of capitalism has reinforced the relevance of Marxism, rather than detracting from it.

Despite the neoliberalization of capitalism, Marx’s conception of the working class as the force upon which society rests remains relevant. Any revolutionary movement must recognize this. It must focus its organizing efforts primarily, though not exclusively, on this sector of the population. The method and analysis of Marxism has just as much, if not more, application today than it did more than one hundred years ago.

We have established that the Marxist conception of the industrial proletariat still has merit today. I would like to spend the rest of this essay arguing for an expansion of this conception. A key part of the Left’s shift away from the working class is predicated on the fact that the majority of jobs in the US are in the service industry. The argument is that these workers are not connected to production. Thus, the Marxist focus on the labor process is irrelevant. I would like to counter this idea here.

The loss of 5 million manufacturing jobs in the US was accompanied by the addition of 1.7 million service jobs over the same period [21].  As we have discussed, it is not the case that service has replaced production. It is also not the case that service and production are unconnected. It is more accurate-and indeed more helpful-to think of this service boom as an expansion of production. Services are used to get parts, to get final products to market, and services to sell those products. Most importantly, services are used to revive and refuel workers so that they can work another day under increasingly intensive conditions. These are inextricably linked to the production process, as neither could survive without the other. The boom in production has required an expansion of services. Capital needs service workers to work just as hard as the producing workers, in order to realize gains in productivity at the point of production. This link between manufacturing and service workers might explain why a high number of fast-food workers, like manufacturing workers, are on some form of public assistance [22].

Further, with the speeding-up of production, capital requires the rapid movement of parts between factories. The economy increasingly depends on the movement of goods from point A to point B. Just-in-time logistics has become critical. Just-in-time logistic firms like UPS use cutting edge communication technology to guide this movement. Through radio frequency identification (RFID) and GPS, inter-mobile transportation on air, sea, and land is all organized in a continuous flow.

Between 1970 and 2000, freight traffic increased 7.5 times, measured by dollars [23]. The transportation workforce grew by nearly one million workers over the same period [24], and is currently one of the the fastest-growing sectors of employment [25]. Think of the potential impact these transportation workers could have on the flow of capital. The ruling class already has. One report showed that that if the thirteen thousand dock workers who run the West Coast’s 29 ports went on strike, it would cost the US economy two billion dollars a day [26].  Transportation workers have a huge amount of economic power. Further, no one would be able to get to work to produce profits if transportation workers did not operate machinery. Transportation workers are vital for the continuation of capitalism, and therefore retain power. They should, for this reason, be considered part of the working class.

We must also think about the potential power of warehouse workers today. According to a 2015 article in The Internationalist, “Hundreds of immigrant warehouse workers in Brooklyn, New York, won a historic victory on November 4 when their year-long organizing campaign brought a landslide unionization vote at the nationally known B&H Photo Video professional supply firm. On October 11, 18 and November 1, they had held spirited demonstrations outside the store on 34th Street in Manhattan. Now the decisive day had arrived. Well before sunrise on the 4th, workers gathered near the company’s warehouses at the Navy Yards and Evergreen Avenue” [27].

Workers in fulfillment warehouses that store and send final goods for retail are a significant link in the production circle. Like service workers, they provide goods the proletariat needs to continue existing and, by extension, to continue making profits for the capitalists. As revolutionaries, we should consider them just as much a part of the working class as any factory employee.

The Amazon Fulfillment Center in Baltimore is over one million square feet long, and employs over one thousand workers. Pickers, warehouse workers who fill orders, are connected with RFID scanners telling them what goods to find, how to do so in a vast warehouse system, how much time it should take them, and what percentage of their picking goal they have reached so far that day. Workers speedwalk ten or twelve miles a day on hard concrete floors in an effort to meet these punishing picking quotas [28]. Not only are these workers linked with the production process, their working conditions mean that they will have an interest in uniting with the rest of the proletariat to overthrow capitalism.

Tech workers, contrary to popular belief, are not separate from production either. With the use of universal barcodes, the exact location of inventory during production can be tracked all the way from the factory floor to store shelves. The products are then tracked on store shelves, and tech workers send data back to the supply chain to ensure the optimal amount of units are manufactured. Thus, the process comes full circle.

This connection to production persists even among teachers, nurses, and hospital workers. The result of increased exploitation at the point of production is that there is a greater burden on the working class physically, mentally, and emotionally. This means that there has been a growing need for public hospital workers, social workers, teachers, and the like to care for a working class that is growing sicker and more stressed. Not only that, workers also have less time and resources to tend to their own needs. The ruling class also relies on the social reproduction of the non-producing sections of the working class. They require teachers so that the next generation of workers are sustained, trained, and disciplined. They require workers specialized to care for the elderly and disabled so that other workers are freed from the burden of their care while on the job. The very fact that capital could not survive without these groups means that we should consider them part of the working class.

The most vital aspect of worker’s power, the ability to stop the flow of profits, clearly has not disappeared in the age of neoliberalism. All these workers, from service to retail and beyond, are in some way connected to production. Therefore, they all have the power to change society. Neoliberalism has not transcended the need for a conception of class based around production, but instead made it all the more vital. As I have argued previously, we should return to traditional Marxist ideas about class and, in so doing, assert the unity of the proletariat.

References

  1. The State of Manufacturing in the United States”. International Trade Administration. July 2010. Retrieved March 10, 2013.”
  2. Ibid
  3. Nutting, Rex. “Think Nothing Is Made in America? Output Has Doubled in Three Decades.” MarketWatch, 28 Mar. 2016,
  4. Galdabini, Greg (February 12, 2012). “U.S. Manufacturing: The World’s Third Largest Economy”. United States Chamber of Commerce.
  5. “Raising America’s Pay: Why It’s Our Central Economic Policy Challenge.” Economic Policy Institute,
  6. “Study: One-Third Of Manufacturing Workers Use Welfare Assistance.” Manufacturing.net, 13 May 2016
  7. “Poll: Two-Thirds of US Would Struggle to Cover $1,000 Crisis.” APNORC.org
  8. “The Theory of Economic Growth.” Econometrica, vol. 39, no. 4, 1 July 1971, pp. 137–140.
  9. Greenhouse, Steven. “Most U.S. Union Members Are Working for the Government, New Data Shows.” The New York Times
  10. History shows that trade made easy. “U.S. Has Lost 5 Million Manufacturing Jobs since 2000.” CNNMoney, Cable News Network See also “2013 UN World Investment Report.”
  11. Moody, Kim. In Solidarity: Essays on Working-Class Organization in the United States. Chicago, IL, Haymarket Books, 2014.
  12. Ibid
  13. A Profile of the Automotive Sector in the Southeastern United States, Matthew N. Murray,  David T. Mayes, Kathleen Hoffman. August, 1999
  14. Ibid
  15. Staff, Iif. “CFOI Charts, 1992-2006.” CFOI Charts, 1992-2006.
  16. Moody, Kim. In Solidarity: Essays on Working-Class Organization in the United States. Chicago, IL, Haymarket Books, 2014. Op. Cit.
  17. Chuck, Elizabeth. “Poultry Workers, Denied Bathroom Breaks, Wear Diapers: Oxfam Report.” NBCNews.com, NBCUniversal News Group, 12 May 2016
  18. Galdabini, Greg (February 12, 2012). “U.S. Manufacturing: The World’s Third Largest Economy”. United States Chamber of Commerce. Op. Cit.
  19. Ibid.
  20. Auto Parts Workers Strike for Recognition, Strategy Was to Shut Down Assembly Plant.” Auto Parts Workers Strike for Recognition, Strategy Was to Shut Down Assembly Plant | Labor Notes
  21. “Consumer Spending and U.S. Employment from the 2007–2009 Recession through 2022 : Monthly Labor Review.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics
  22. Kathleen Maclay, May 10, 2016, “One in Three U.S. Manufacturing Workers Is on Public Aid, Study Shows.” Berkeley News, 10 May 2016
  23. “The US Interstate Highway System: 40 Year Report.” The US Interstate Highway System: 40 Year Report
  24. “Chapter 5: Transportation Economics | Bureau of Transportation Statistics.” Chapter 5: Transportation Economics | Bureau of Transportation Statistics
  25.  Mandy, Francis. “Issue Highlights – November 2016.” Cytometry Part B: Clinical Cytometry, vol. 90, no. 6, 2016, pp. 480–482. doi:10.1002/cyto.b.21489.
  26. “Doc Strikes and the Economy” More than Shipping.
  27. Group, Internationalist. “V-I-C-T-O-R-Y!B&H Workers in Big Win for Labor and Immigrant Rights.”
  28. McClelland, Mac et al. “I Was a Warehouse Wage Slave.” Mother Jones

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