In Solidarity. Kim Moody
a million members from 2007 to 2008.77
The aggressiveness of the SEIU leadership toward other unions went beyond the formation of CTW to spark a virtual civil war in organized labor. Much of this centered on the highly controversial efforts of the SEIU to raid a number of unions. One was the California Nurses’ Association (CNA), which was successfully competing with SEIU in recruiting nurses not only in California but around the country. Another major target of SEIU aggression was UNITE-HERE, the recently merged union of garment and hotel workers. This ended in a split in UNITE-HERE, with perhaps a third of its members leaving to join SEIU.78 The CNA, for its part, went on to lead the merger of three nurses’ unions to form the National Nurses United in 2009 with 150,000 members.79
As Stern aggressively merged dozens of SEIU into giant “mega-locals,” he ran into resistance. The strongest opposition to forced mergers and to Stern’s increasing willingness to cut deals with healthcare systems in order to gain members came from the leadership of SEIU’s militant 150,000-member United Healthcare West (UHW). When Stern moved to put this rebel local into trusteeship in 2009, the leaders and thousands of UHW members left SEIU to form the independent National Union of Healthcare Workers (NUHW). As UHW’s membership was technically under agreements signed by the SEIU International, however, the members were not able to simply transfer their loyalty. NUHW suffered a serious setback in 2010 when it lost a representation election for forty-five thousand workers at Kaiser Permanente, the huge California-based healthcare system. Nevertheless, it went on to win representation for some ten thousand healthcare workers by mid-2011.80
Eventually, after alienating much of the leadership of both federations, the SEIU reached truces with UNITE-HERE and CNA and Stern resigned as SEIU president. The war against NUHW, however, continued.81 If the worst of labor’s “civil war” was over by 2010, it had arguably been a factor in the unions’ loss of the one piece of legislation they most sought from the Obama administration, the Employee Free Choice Act, which would have made union organizing somewhat easier. Despite growth in some areas, the US labor movement as a whole had entered the recession in disarray.
Crisis and Decline, Once Again
The rate of profit began its fall in 2006. By the fourth quarter of that year the mass of profits in the nonfinancial sector fell. This was before the subprime collapse was evident and well before the big financial meltdown of 2008.82 As employers responded to this decrease in profits, unemployment began to edge upward in the first quarter of 2007, when the unemployment rate was 4.5 percent. By March 2008 it was 5.1 percent, with 7.8 million out of work. By October 2009 official unemployment hit 10 percent with 15.6 million out of work, a third of them for twenty-seven weeks or more. If we include the 5.6 million considered “not in the labor force” but who wanted work, the total is more than twenty-one million.83 Some six million private-sector production-worker jobs were lost between May 2007 and October 2009.84
The fate of the unions in this situation was predictable. In 2009 unions saw a net loss of 771,000 members, 834,000 in the private sector, more than wiping out the gains of the previous two years.85 The outcomes of collective bargaining followed the pattern of union loss. First-year wage increases in new collective bargaining agreements rose to an average of 3.6 percent in 2007 for all new agreements and 3.2 percent for those in manufacturing, but by 2009 new wage settlements had dropped to 2.3 percent and 2.0 percent respectively, and by September 2010 they had fallen to 1.7 percent and 1.1 percent. Whereas 14 percent of workers covered by these agreements had received no first-year increase in 2007, by 2010 it was 35 percent.86 The number of strikes, while already very low by the 2000s, fell to an all-time low in 2009 of 119 strikes.87 Management aggression in collective disputes in 2009 and 2010 was evident in at least three lockouts; those of borate miners in California, uranium-processing workers in Illinois, and Red Cross workers across six states.88 To be sure, there was worker resistance as well. The strike figures above included groups ranging from food-processing workers in New York State to nurses in Philadelphia and Minneapolis. Even the UAW, desperately on the defensive in the automobile industry, struck against Bell Helicopter for twenty-seven days.89 But, as in 1979–82, the employers had the upper hand.
Productivity was once again up significantly. In 2009, productivity took several leaps, the biggest being in the second quarter when it grew by 8.4 percent for nonfarm business, as employers shed workers while production rose in the second half of that year. In manufacturing, the third quarter of 2009 brought an unprecedented 16.9 percent jump in productivity. Unit labor costs fell rapidly in manufacturing from mid-2009 through the first three quarters of 2010.90 Looking at these productivity leaps in late 2009, Businessweek’s economic editor explained them as follows: “So people working shorter hours had to do the same work as before, or more. People who kept their jobs had to pick up work of ex-colleagues. Many workers probably put in extra hours that weren’t counted in the statistics in order to get all their work done.”91 He went on to note that this produced the “largest decrease [in labor costs] since the series began in 1948.” While such huge productivity spikes cannot be sustained, it is clear that capital continues to push for the combination of wage restraint and increased relative surplus value as their means of recovery.
In 2011, the attack on working-class living standards moved on to the public sector in accelerated form as Republican governors in several states, responding to the nervousness of state bondholders and the continued desire of businesses and the wealthy for tax cuts, attempted to deprive state and local government employees of collective bargaining rights altogether. The fiscal squeeze found forty-six or fifty states in deficits by 2009, in large part because of cuts on business taxes. The proportion of state revenues drawn from corporate taxes had fallen from 9.7 percent in 1980 to 6.7 percent in 2006. Public workers had faced concessions and staff reductions for some time. By 2009 thirty-four states had begun reducing their workforces.92
This attack had already accelerated in 2004 in Indiana, where Governor Mitch Daniels repealed collective bargaining rights for state workers. The consequence was that union membership among state workers fell from 16,408 in 2005 to 1,490 in 2011. No doubt inspired by events in Indiana, right-wing governors in Wisconsin, Ohio, and Michigan pushed legislation that would abolish or severely limit bargaining for public workers.93 This brought an enormous, largely unexpected reaction in these states, above all in Wisconsin. There the state Capitol Building was occupied for two weeks, with thousands in the street through the week; weekend demonstrations drew seventy thousand union members and supporters in the first week and a hundred thousand in the second. Polls showed that a majority of people across the country opposed depriving workers of bargaining rights, and most of these laws are under challenge in the courts. Nevertheless, Democratic legislators in several states soon joined those trying to repeal the bargaining rights of public workers.94
Underlying the attack on public workers is an effort to reduce the cost of “nonproductive,” though necessary, labor—that is, labor that for the most part does not produce surplus value and, in this case, must be paid out of it in the form of taxation. It is simply another way of accomplishing what direct austerity programs are attempting to do to public workers and the poor in Southern Europe.95 Interestingly, Marx noted that the huge increases in productivity brought about by large-scale industry in the nineteenth century allowed for “a larger and larger part of the working class to be employed unproductively,” mostly as domestic servants in his day.96 Clearly, the problems of accumulation are such that even substantial productivity growth no longer allows such a luxury from capital’s point of view.
With productivity rising, corporate profits reached $1.7 trillion in the third quarter of 2010, the highest amount ever recorded by the government, and an increase of 28 percent over a year before. The biggest part of this increase came from domestic profits and the lion’s share of those from nonfinancial corporations, whose profits grew by 40 percent in that period.97 Certainly, labor, once again, will have played an involuntary role in whatever recovery should follow the Great Recession.
Conclusion
A number of conclusions flow from what has been argued above. The first is that the historic link between rising productivity and wages, so valued by Keynesian and institutional labor economists, and so central to collective bargaining theory, has been broken. The liberal economists at the union-backed Economic Policy Institute called the failure of wages to rise