Verizon sticks it to its workers because $45 billion isn’t enough

Does a company that racked up $45 billion in profits over the past five years really need to stick it to its employees? The answer depends on who’s asking. From any ordinary human standpoint, clearly no. From the perspective of Wall Street and corporate board rooms, the answer is always an enthusiastic yes.

Class warfare is on display in stark terms at Verizon Communications, and although such direct terms are avoided by the corporate media, there is much talk of the strike against Verizon by the Communications Workers of America and International Brotherhood of Electrical Workers as “labor’s last stand.” That might be a little hyperbolic, or it might be wishful thinking, as such talk of last stands is often intertwined with juxtaposing unionized older sectors with non-unionized sectors that are promoted as “new” and “vibrant.”

We've seen this before: Three unions protest outside Verizon headquarters in Philadelphia in August 2009 (photo by Liz McElroy, for the aflcio2008)

We’ve seen this before: Three unions protest outside Verizon headquarters in Philadelphia in August 2009 (photo by Liz McElroy, for the aflcio2008)

Typical of the corporate media is this report from NBC News, referring to Verizon’s non-unionized wireless operations:

“ ‘The question is, is there going to be a unionized presence in this advanced, technologically innovative kind of industry?’ said Nelson Lichtenstein, director of the Center for the Study of Labor, Work, and Democracy at the University of California — Santa Barbara. The likely answer doesn’t bode well for unions.”

Perhaps an unconscious nod to the technology sector’s old-fashioned exploitation of workers despite its carefully calculated image of modernity, online media has been as responsive to corporate power as has the traditional corporate media. A study of four prominent outlets conducted by Fair & Accuracy In Reporting found 31 direct quotes, either via interviews or press releases, by management during the first days of the Verizon strike versus 13 by workers. The FAIR report said:

“Corporate media coverage of this strike illustrated the fundamental asymmetry of power that still exists between multi-billion-dollar corporations and comparatively small unions. (A union like Communications Workers of America has an annual budget roughly 1/500th of Verizon’s annual revenues of $131 billion.) An analysis of coverage in two major ‘old media’ outlets (New York Times and Washington Post) and two ‘new media’ outlets (Buzzfeed and Vox) exposes a consistent pattern of prioritizing management’s voice over that of the workers or their representatives, to the tune of roughly 2-to-1.”

More is never enough at the top

About 40,000 Verizon workers walked out on April 13, and Verizon continues to take a hard line against its employees. Despite the $45.3 billion in net income the company has reported for the past five years, its notorious tax dodging (more on that below) and the $350 million in compensation ladled out to its top five executives during a recent five-year period, Verizon’s line is — guess what! — the workers are greedy. (Incidentally, Verizon laid off 39,000 workers during that five-year period.) They are portrayed as greedy because they believe they should be paid a living wage and shouldn’t have to relocate for months at a time, away from their families and communities.

Among the complaints of the strikers are Verizon’s moving of call-center jobs overseas; closing of U.S. call centers; outsourcing other work, including installing and maintaining phone lines, to low-wage, non-unionized contractors; and being forced to work far away, sometimes hundreds of miles away, for months at a time. Working conditions are also an issue, as a Communications Workers of America strike update notes:

“Verizon management has created a sweatshop environment with its excessive monitoring and unreasonable overtime assignments. Employees are monitored in call centers by the electronic recording of every call. Outside technicians are monitored with a Global Positioning System tracking every aspect of movement of the company vehicles. The mismanagement of these monitoring tools has created high levels of stress affecting employee productivity and morale. Call center management routinely assign overtime to employees and then without any concern for the employee’s quality of life cancel assignments less than 10 minutes before the scheduled overtime while directing calls to contract vendors. Outside technicians have been forced to work overtime to the point of exhaustion because the Company has not hired enough technicians to keep up with the workload. Members deserve better treatment than this.”

A classic example, not only of the inhuman treatment often meted out by corporate managements, but of technology, in the hands of capitalists, being a tool of repression rather than “liberatory.” This parallels the supposed “innovation” of technology companies that misclassify their employees as “independent contractors” to exploit them more ruthlessly, thus putting old models of weakening labor protections in new “high tech” wrapping. Nor is there anything new about corporations making hundreds of thousands or even millions of dollars per employee and crying they don’t make enough.

A leader at tax dodging

Dodging taxes is yet another capitalist “innovation.” Although far from alone in this, Verizon is flatly lying when it claims it pays the standard 35 percent corporate tax rate of the U.S. In fact, Verizon enjoyed a tax rate of minus two percent for the period of 2008 through 2013. Yep, despite racking up $42 billion in profits during those six years, it paid no federal taxes. For the years 2008 to 2012, Verizon received a composite $535 million in tax rebates. Although the company did pay taxes the past two years, it paid at a rate lower than what its employees pay.

Then there are corporate subsidies — Verizon pocketed $60 million in subsidies over the past decade from the New Jersey state government alone, yet far from hiring new workers, it laid off more than 300 in that state. The corrupt administration of Governor Chris Christie, which has handed out billions of dollars in corporate giveaways, did not ask for the money back from Verizon despite the failure to create jobs.

Once again, Verizon is not unique. Tax dodging by multi-national corporations costs the U.S. about $111 billion per year, according to an Oxfam report.

As an added insult, Verizon spent $110 million on lobbying for the years 2008 to 2014, and holds $1.3 billion in cash in offshore accounts — money that is hidden so as to not be not taxed.

That such behavior is the corporate norm does not excuse Verizon. A company that reports billions of dollars in annual profits, pays millions to its executives and dodges taxes by the billions can afford to pay its workers a living wage and treat them with dignity. Underlying this battle is Verizon’s wish to concentrate more of its workforce to its non-unionized subsidiaries. Workers in the company’s Verizon Wireless unit are not represented by a union and make far less; Verizon is far more interested in investing in this portion of its business than its legacy landline and cable businesses.

Neoliberalism and the promotion of jealousy

A New Yorker article that was not sympathetic to the strikers nonetheless pointed out the big differences in wages that unionized workers are defending:

“When Verizon workers walked off the job in 2000, there were eighty-five thousand workers striking, and they represented the main part of Verizon’s business. In sixteen years, the number of unionized workers has fallen by more than half. And it’s worth noting that a customer-service agent who makes north of sixty thousand at Verizon would make closer to thirty-six thousand on the company’s wireless side, according to the job site Glassdoor.”

Neoliberal ideology aims to generate jealousy that someone else has a good wage with benefits and some measure of security, lest too many people get the idea that they ought to have those wages and benefits, too. Recall the public-relations battle over the removal of collective-bargaining rights from Wisconsin public workers in 2012. Wisconsin Governor Scott Walker and the corporate powers that animate him waged their war on working people through careful framing.

Conservative ideology insists the question should be “Why does someone have something you don’t have” (such as a pension), instead of “Why do you not have something that you should be entitled to but don’t have.” Once the question was framed that way in Wisconsin, and anti-government rhetoric was wrapped around it, there was a short path to making pensions indistinguishable from excessive government spending.

In that case, government workers were specifically made scapegoats for tactical reasons, but unionized workers are more generally the target of scapegoating, and Verizon flacks have made sure to inflate the actual size of strikers’ wages so as to portray them as “greedy.” It remains to be seen if this tactic will work if the strike become lengthy. It also remains to what extent union leaders will cuddle up to the Democratic Party, and thus dampen rank-and-file militancy. Democrats are openly supporting the strikers right now — it is an election year after all — but the decades-long tactic of unions throwing support to Democrats without asking for anything in return has played its part in the decline of unions and increase in inequality.

When you guarantee unconditional support, when you keep your mouth shut when you are forgotten after the election, when you desperately suppress any independent mass movement, when you are so comfortable in your bubble that you can’t conceive of doing anything different, when you are unable to differentiate between a crumb and a loaf, you will lose. And you will keep losing. It’s long past time for working people to build our own organizations independent of corporate parties and to end illusions that the system that creates a Verizon can be reformed and made “nice.”

A global working class in formation

With the rise of a working class rooted in the global South comes worker militancy in the same geographies. This is militancy that has yet to attract much notice in the advanced capitalist countries of the North.

One reason lies in the withering of labor movements across the North, and a belief in some circles, flowing from that withering, that the working class is shrinking and perhaps ceasing to be an instrument of social change. In part such viewpoints are due to a failure to see office workers in “white-collar” professions to be part of the working class. (Surplus value is extracted from them just the same.) In another part it is myopia — believing labor acquiescence in the North to be universally representative while failing to appreciate the rise of militancy on the part of super-exploited workers in the developing world.

Workers in the South, however, are developing new forms of resistance, and are now an integral part of a global working class, under-appreciated developments brought to vivid life in Southern Insurgency: The Coming of the Global Working Class* by Immanuel Ness. The industrial working class has not disappeared, but rather has been reconstituted in the South and in larger in numbers than ever before, in contrast to scholars on the right and left who “declared the working class dead.” In his book, Professor Ness argues:

“While the right wing declared the working class dead and a false construct, leftist scholars were also challenging the legitimacy of the working class as a force for social equality and transformation. Yet, more than 40 years after the onslaught of the economic, political, and intellectual offensive against organized labor throughout the world, the working class has a heartbeat and is stronger than ever before despite the dramatic decline in organized labor. … While it may be the case that the labor movements in Europe and North America are a spent force, it is their very defeats that have marginalized their existing supine and bureaucratic order and regenerated a fierce workers’ movement in the early 21st century.” [page 3]

Southern Insurgency coverThe percentage of formal-sector workers holding industrial employment in the South has grown from about 50 percent of the global total in 1980 to 80 percent. This increase is of course central to corporate strategy in the neoliberal era — as organized labor achieved successes, capital responded by moving production. This process has repeated, as Northern multi-national capital continually seeks out lower-wage Southern labor to exploit. That Northern capital has intensified its exploitation is demonstrated by the fact that profits being taken out of the South are rising faster than the inflow there of investment capital.

Southern traditional unions lost whatever militancy they may have once had through their co-optation into state and capitalist institutions. But in contrast to working people in much of the North, workers of the South have begun to build new types of organizations. Professor Ness writes:

“In more and more industries in Africa, Asia, and the Americas, this new proletariat is forming bonds of solidarity through independent organizations demanding improved conditions for all workers, pushing existing unions to represent members and non-members, and forming alliances within communities to improve the quality of life for all impoverished workers. The workplace and community demands that are now made by the new industrial proletariat reveal the motivations of workers rooted in solidarity, and a fundamental opposition to neoliberal capital, inequality, and poverty.” [page 58]

Migrant workers are the most vulnerable, and suffer particularly unsafe and exploitative working conditions and pay. Liberal theories of migration ignore the structural reasons for migration, Professor Ness notes — neoliberalism creates unemployment and inequality, forcing involuntary movements; forced displacement in turns leads to slums, poverty and exploitation. Capital needs these migrations, and immigration, to increase competition for jobs and thus make work more precarious. Guest workers tend to earn barely enough to ensure their own survival and don’t contribute to their home economies, in contrast to World Bank and International Monetary Fund propaganda.

Precarious labor in India

The core of Southern Insurgency are case studies of three of the largest Southern economies: India, China and South Africa. The intensity of exploitation in each of these countries is high and resistance ongoing despite the use of force on the part of both capital and government. The first of these case studies, India, represents “a leading example of neoliberal imperialism,” Professor Ness argues:

“The actions of the Indian state have been decisive for multinational capital and its local agents by facilitating foreign investment in new manufacturing industries, safeguarding foreign investments, and commonly using legal rulings against workers and unions and unions fighting for democratic representation at the workplace. Moreover, state police are readily available to intervene on behalf of multinational investors seeking to thwart labor organizations. In India, the state police and the criminal justice system are not impartial intermediaries but partisans in support of corporations against the working class as it seeks equity and humane conditions in the workplace.” [pages 105-106]

Only about one-quarter of Indian workers enjoy regular employment and are eligible to be in a state-recognized union; three-quarters of workers are “contract workers” who have no security, are prohibited from unionizing and are paid 25 to 50 percent of the low wages of regular workers, barely enough to eat and pay rent. Although Indian law has permitted unions since independence, labor law has been flouted since the early 1990s by the state, capital and sometimes even unions. With traditional Indian unions, who are aligned with weakening political parties, failing to defend workers, a new independent formation, the National Trade Union Initiative, is attempting to organize non-union and informal workers, although the government refuses to recognize it.

Splitting the working class is at the core of multi-national capital’s strategy in India, actively encouraged by the state. One example is a fierce fightback at a Suzuki auto plant in 1991. Workers there used hunger strikes and two-hour “tool-downs” to press their demands, which included an end to the contract system. Management responded with a lockout, enforced by a police blockade, and a demand that workers sign a draconian “good conduct” letter to be allowed to return. Ultimately, Suzuki restarted production with scabs, enthusiastically backed by the state.

When Suzuki opened a second plant, the same scenario repeated, but this time the company hired goons who instigated violence, leaving more than 100 injured but only worker leaders jailed. Organized resistance continues in India despite continued repression, Professor Ness writes, and organized fight-backs, which consistently include demands for equal pay and conditions, are building needed class consciousness.

Organizing beyond unions in China

Although Chinese workers face the strongest state among the three case-study countries, they are also making the biggest strides. The very weakness of the Chinese union federation, Southern Insurgency argues, may give workers there more space to act collectively outside the constraints imposed by union bureaucracies and labor law. The All-China Federation of Trade Unions has been the sole national federation since 1949, and because good benefits and security were the norm during the Mao Zedong era, member unions have little experience in negotiating. Local branches don’t function as active organizations but respond only to rank-and-file disruptions of production. Unions are subservient to capital and negotiate without member input, but this makes them little different from Western unions, Professor Ness argues:

“Most existing union models throughout the world do not want competition from independent unions, so why should the [All-China Federation]? Labor unions in liberal democracies that fail to represent members’ interests are thus a poor model for the Chinese working class.” [page 126]

Labor law is largely not enforced in China; in part this is due to enforcement being devolved to the city level. Struggles tend to be ignited by failures to pay wages and thus tend to be spontaneous single-factory actions. Ironically, because workers are circumscribed by an inability to revolt regionally, nationally or across industries, the number of local revolts is higher than it would be otherwise. Younger workers are becoming more assertive in demanding better pay and retirement benefits, and privatizations and layoffs at state-owned enterprises are also behind a rising number of strikes.

Workers in the heavily industrialized Pearl River Delta region, sometimes led by floor supervisors, have forced companies to pay back owed wages and retirement benefits. Police repression has been deployed outside plants but the state has also pressured companies to pay what they owe their workers. Throughout, workers have relied on self-organization as they have received no help from their unions.

Wildcat strikes are the standard model of Chinese workplace bargaining, Professor Ness writes, a “class struggle” unionism outside official channels. A future Chinese labor movement may be emerging from these battles.

State and capital vs. South African labor

Parallel to the contract-labor system of India and the hukou migrant-labor system of China, South Africa extensively uses contract and migrant labor at the behest of multi-national capital. Neoliberalism has an added bitter component there because harsh labor policies are enforced by the African National Congress (ANC), which granted political rights to the country’s oppressed Black majority but left economic relations untouched.

The largest South African labor federation, the Congress of South African Trade Unions (COSATU), formed as an ANC affiliate during the 1980s but became a “distinctly junior partner” to the ANC and the ANC-aligned South African Communist Party and began to lose credibility in the 2010s as it failed to oppose the harsh neoliberalism dictated by the International Monetary Fund. Working conditions are particularly poor for miners — mining is controlled by multi-national capital and is by far the country’s biggest industry.

COSATU and its National Union of Mineworkers affiliate have supported an increase in the use of informal labor because they can hold a dominant position by representing only regular workers and thus without the support of the majority of the workforce. When a wave of strikes nonetheless began in 2009, the unions declared the strikes “illegal” and backed management. In at least one case, the union called for a harsher punishment than management did!

Workers organized themselves, and asked a new union unaffiliated with COSATU, the Association of Mineworkers and Construction Union, to negotiate on their behalf, which in turn won much greater pay raises. The National Union of Mineworkers reached a new low in 2012, however, after striking workers left that union and joined the Association during a strike. When management obtained a court order against the strikers, the National Mineworkers sided with management and sent goons to join with company goons to impose a violent denouement; 34 were killed and scores injured in what became known as the Marikana Massacre.

A fresh wave of strikes commenced in 2014, with Association negotiators obtaining significant wage increases. In parallel, a metal workers union has called for more militancy and for nationalizations; in response, COSATU expelled it. Worker militancy continues to rise and with the fracturing of the union movement, a realignment seems to be coming. Professor Ness writes:

“While the future configuration of the unions remains to be determined, it is clear that rank-and-file workers are helping to build oppositional unions that are shaping a struggle against economic imperialism, insisting on ending the system of exploitation and inequality that remains a fixture in the post-apartheid era.” [page 178]

Strength in worker radicalism

Southern Insurgency concludes by asking if existing labor unions can contain the development of independent working-class organizations. The actions of Indian, Chinese and South African industrial workers are reshaping traditional unions, and workers can’t rely on bureaucratic unions leaders to defend themselves, the book argues:

“It is the development of worker radicalism that will shape the form and survival of decaying traditional unions. … [T]he results of these rank-and-file struggles are mixed, but the evidence … demonstrates that these movements are gaining traction, and achieving real wage gains and improvement in conditions.” [page 189]

This latest book by Immanuel Ness is a needed corrective to the false idea that resignation to neoliberalism is universal, and the examples of militancy that he presents are not simply a necessary corrective but demonstrate that improvements are only possible with organized, self-directed actions. In a world more globalized then ever, workers of the world truly do need to unite — a global working class can only liberate itself through a global struggle.

Immanuel Ness, Southern Insurgency: The Coming of the Global Working Class [Pluto Press, London 2016]

Remembering the Marikana massacre on the third anniversary

Activists gathered across South Africa, and in London, New York and Oakland, to commemorate the third anniversary of the Marikana massacre, the deadliest South African massacre since Soweto.

A deadly massacre under an African National Congress government. And not the only shooting of workers, merely the worst under the harsh neoliberal assault overseen by the ANC.

South Africa’s apartheid system was overthrown in a negotiated process forced by a massive international popular movement backing the ANC, but the party has turned its back on popular forces. (This and the next two paragraphs based in part on The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein.) During the long years of struggle by the ANC and pitiless repression by the National Party, the apartheid-era rulers in South Africa, the guiding document of the ANC was its “Freedom Charter.” The charter, adopted after democratic consultations in 1955, calls for the right to work; to decent housing; freedom of thought; nationalization of mines, banks and “monopoly industry”; and land distribution so that all South Africans can share in the wealth of their country.

Marikana DayAlthough the ANC had the moral authority to carry out its program, its negotiators tragically (and unwittingly) gave up all economic control, forfeiting their ability to carry out any aspect of their program, with the result that, two decades later, the economy is firmly in the hands of its numerically minuscule White business elite (which is tied to international markets). The country’s eyes were on the political talks between Nelson Mandela and F.W. de Klerk, in which the ANC decisively was the victor against the National Party’s attempts to dilute its loss of government control.

But in the parallel economic talks, which drew little attention, the ANC gave away everything. The central bank would be independent of government (as financiers demanded), National Party government finance officials would remain in office and the ANC government would sign on to everything demanded by the World Bank, the International Monetary Fund and all international trade agreements. Having done so, the ANC took office handcuffed, and having tied themselves to financial markets, those markets applied further discipline by attacking the South African economy at the first sign of anything that displeased them. From pleasing markets and giving financiers repeated assurances, it proved a short path to President Mandela’s successor, Thabo Mbeki, imposing austerity — a 180-degree turn from the Freedom Charter.

Workers face attacks by management and unions

Mining is a critical component of the South African economy, and the foreign multi-national corporations that own South Africa’s mines mistreat local workers with impunity. (This and the next paragraphs are based on Southern Insurgency: The Coming of the Global Working Class by Immanuel Ness.) Workers are often housed in substandard housing that lacks water and electricity, and an increasing number of miners are hired as contingent workers. Not only do mine workers not receive support from the National Union of Mineworkers, the NUM actively joins with managements in oppressing its rank and file.

Nor do they receive support from the country’s largest labor federation, the Congress of South African Trade Unions (COSATU) — in February 2012, NUM and COSATU declared a strike by mineworkers illegal and actually took a harder line against the workers than the mine owner did! Mineworkers continued to bypass the union, or organize through an independent grassroots organization, Amcu, as mineworkers pressed to raise their monthly minimum wage from about US$400 to US$1,150. Two workers were shot by snipers on August 11, and the next day, fearful of returning to the mine, workers gathered on a nearby hill.

The management of the company that owned the mine, Lonmin PLC, called in the police. Lonmin sought to have the strike declared illegal and demanded workers surrender the crude weapons that had fashioned to defend themselves. NUM drove a vehicle equipped with a loudspeaker through the nearby settlements, declaring the strike illegal. Workers gathered on the hill again the morning of August 16 and were encircled by armed police. At 4 p.m., police opened fire, killing 16 workers as television cameras recorded and another 18 were executed off camera after fleeing the initial killings. Another 78 were injured.

An investigation headed by Judge Ian Farlam, appointed by President Jacob Zuma, found that police anticipated the killings hours earlier. Professor Ness, in Southern Insurgency (to be published by Pluto Books in October) provided this summary of the preparation:

“On the morning of August 16, more than eight hours in advance of the police shootings, aware the dozens of workers might be killed in a police assault, Colonels Klassen and Madoda of the [South African Police Service] ordered four mortuary vehicles to the scene from the health department, each with a capacity to carry eight bodies. The report also implicated senior government officials, including ANC and former NUM general secretary Cyril Ramaphosa, a shareholder and director of Lonmin as the events leading up to the Marikana massacre were unfolding. … [A]n email from Ramaphosa to Albert Jamieson, Lonmin’s chief commercial officer, written one day before the massacre and concluding the strike was not a labor dispute but a ‘criminal’ action that required ‘concomitant action.’: ‘The terrible events that have unfolded cannot be described as a labour dispute. They pare plainly dastardly criminal and must be characterised as such. There needs to be concomitant action to address this situation.’ ”

Nonetheless, the commission pinned the blame for the massacre on the workers:

“[T]he tragic events that occurred during the period 12 to 16 August 2012 originated from the decision and conduct of the strikers in embarking on an unprotected strike and in enforcing the strike by violence and intimidation, using dangerous weapons for the purpose.”

Pushing back against government whitewash

The Marikana Support Committee, in rejecting that conclusion, declares:

“This statement is offered as a fact that we have to accept. But it is an opinion. There is no evidence to back it up. The Marikana Support Campaign considers this finding as a gross defamation of the miners. At the same time, despite a run of evidence to the contrary, Farlam and his Commissioners exonerate Ramaphosa and other government ministers. Lonmin is substantially exonerated.”

The Support Committee is calling for a new probe, “a civil society-led inquiry based on the evidence.”

The National Union of Metalworkers of South African (NUMSA), a union expelled from the COSATU trade-union federation after challenging the federation to break with the ANC and the ANC’s neoliberal policies, also sided with the mineworkers. In a statement issued for the third anniversary of the Marikana massacre, the metalworkers union said:

“The Marikana Massacre in 2012 signified the degeneration of our country into a Police State, as evidenced by the continued usage of police and excessive force to undermine popular dissent from below. … The mining industry, like many other key sectors of our economy for many years have been heavily dependent on Black and African working class cheap labour, for its profit maximisation and wealth accumulation strategy. … It is our view that the Marikana Report that was released to the public by President Jacob Zuma was a spit on the face of Marikana’s widows and victims’ families, since it was a whitewash and was intended to make the fast fading ANC-government look caring in the eyes of the working class.”

After two decades of ANC governance, South Africa is the most unequal country on Earth. The country’s gini co-efficient, the most common measure of inequality, was the world’s highest at 0.65 in 2011, according to World Bank statistics, and that the number has not likely improved since. About 57 percent of South Africans live in poverty, and unemployment is 26.4 percent at the same time that only 80 percent of industrial capacity is being utilized.

It is not only divisions along racial, national and gender lines that divide us and block necessary solidarity, it is also the North-South division. An injury to one is an injury to all, regardless of where.

Building workplace organizations anew

Workplace solidarity in the face of the neoliberal onslaught is as crucial as ever, yet present-day unions become ever more fearful. How do we build solidarity in an era when the tools of the past have lost their effectiveness?

New types of organizations are not only necessary, it is essential to look at past upsurges in union activity, particularly those of the 1930s, with clear eyes rather than romanticization, argues Staughton Lynd in Solidarity Unionism: Rebuilding the Labor Movement from Below.* A new re-issue and updating of a classic work, the book has lost none of its timeliness. Critical to understanding how unions lost their way, becoming too cozy with the corporate managements they are supposed to challenge, is the stifling of rank-and-file activity, particularly of militant tactics, by Congress of Industrial Organization (CIO) unions in the 1930s.

Self-activity from below in the mid-1930s catalyzed a big upsurge in union membership; solidarity through striking was a critical component. When the National Labor Relations Act, also known as the Wagner Act, was moving toward enactment in the 1930s, the American Civil Liberties Union and the Industrial Workers of the World (IWW) opposed it because they foresaw the National Labor Relations Board that would be formed to arbitrate disputes would hinder the right to strike. The board would inevitably aid capital, not labor, they believed.

Solidarity Unionism coverThe Wagner Act was passed, the board came to be, and although specific decisions have favored one side or the other at different times, those fears have come to pass. Mr. Lynd argues that the CIO opposed and suppressed rank-and-file and independent activity, opposed an independent labor political party and agreed to no-strike clauses that would be in force the entirely of contracts, thereby handing all power to company management. And although Mr. Lynd doesn’t discuss it, many of the gains that were achieved in the Wagner Act were taken back a decade later with the passage of the Taft-Hartley Act, which further restricted union activity, including prohibiting sympathy strikes, a serious blow to solidarity.

In U.S. labor mythology, the CIO is the “radical” union umbrella organization, infusing new life into Great Depression organizing after the slow pace of unionization under the guidance of American Federation of Labor (AFL) unions. But CIO contracts ceded decision-making to management in all aspects of operations from the start, while union leaders promoted themselves as guarantors of labor peace. Going back to the CIO of 1936 or 1945 is useless, Mr. Lynd argues, because it set out to suppress independent activity from the start.

Democracy is the essential ingredient

Interestingly, he also argues that the dues-checkoff system is another factor contributing to the undemocratic and collaborationist tendencies of unions, because it makes union leaderships unaccountable to the rank-and-file. New worker organizations must be democratic to have any chance of being effective. Building new labor organizations of a different kind, that demonstrate their usefulness in responding to problems, is the way forward. Mr. Lynd writes that democracy is the starting point:

“Trade unions are among the most undemocratic institutions in the United States. Far from prefiguring a new society, they are institutional dinosaurs, resembling nothing so much as the corporations we are striving to replace. … Democracy means, at a minimum, the freedom to criticize frankly and fully. Union bureaucrats have a tendency to view criticism as treason. But rank-and-file members must be able to criticize, not just the policies of incumbent union officers, but the structural shortcomings of the labor movement. For instance, CIO contracts have always contained no-strike and management-prerogative clauses, but if we think (as I do) that these clauses are wrong and should be abolished, we should be free to say so.” [page 21]

From such democracy arise the conditions to begin moving toward a better world, instead of the defensive retreats of recent decades.

“Working people believe in solidarity, not because they are better than other people, but because the power of the boss forces workers to reach out to each other for help. Because of the vision and practice of solidarity, the labor movement with all its shortcomings does prefigure a new kind of society within the shell of the old. And by building organizations based on solidarity, rather than on bureaucratic chain-of-command, we build organizations that by their very existence help to bring a new kind of society into being.” [page 24]

The author gives three local examples from the area around Youngstown, Ohio. One was a solidarity club consisting of workers from several unions that organized united actions in defense of strikers and other workers facing layoffs or other unfair labor practices; one was a group of retirees that defended pension benefits, especially since, as retirees, they were not allowed to vote on contract changes; and the third organized in defense of workers suffering health problems due to working with toxic chemicals.

Solidarity, not bureaucracy

Although each of these three groups won victories, the author acknowledges that they did not have far-reaching impacts. They did, however, demonstrate what is possible with different kinds of labor organizations that are democratic and based on direct action. Mr. Lynd writes:

“I want to suggest that trade unions as they now exist in the United States are structurally incapable of changing the corporate economy, so that simply electing new officers to head these organizations will not solve our problems. I argue that the internationalization of capital, far from proving that such centralized unions are needed more than ever, has, on the contrary, demonstrated their impotence and the need for something qualitatively new.” [page 47]

Putting life into the concept of “an injury to one is an injury to all” by striking on behalf of workers in other enterprises in one form of this necessary solidarity. Shop-floor committees that organize around grievances and problems rather than negotiating contracts and that use direct action, even in opposition to their union leaders, and “parallel central labor bodies” that organize workers in a geographic region, across industries, are two alternative forms the author advocates. As an example, he recounts a 1916 incident where the 2,000 workers of a factory walked out when an organizer was dismissed; within a couple of days, 36,000 workers across the region walked out in an organized show of strength.

Militancy is what is needed:

“The critical analytical error … of established unions about their current crisis is the assumption that labor and management have the same or mutually consistent interests. … It is the assumption that underlies business unionism, because it induces trade unions to leave investment decisions to management while directing their own attention to wages, hours, and working conditions, and to surrender the right to strike (for the duration of the collective bargaining agreements) in the belief that workers no longer need the strike to protect their day-to-day interests.” [page 78]

By ceding all decision-making to capitalists, negotiating over wages, hours and working conditions will always be defensive because unions are bargaining the extent of their members’ exploitation and can do nothing more. Staughton Lynd has given us a concise guide to thinking about workplace organization differently. (At barely a hundred pages in compact form, I was able to read Solidarity Unionism in a single evening.)

And once we realize we don’t need capitalists to make decisions for us, and learn to organize collective self-defense, getting rid of bosses and running enterprises ourselves enters our imagination.

* Staughton Lynd, Solidarity Unionism: Rebuilding the Labor Movement from Below [PM Press, Oakland, California, USA 2015]

Providing low-cost banking by saving the post office

The struggle to save the United States Postal Service is emblematic of the larger struggle against corporate plundering of public resources. Reversing the intentional bankrupting of the post office requires not only a movement of allies that a new union leadership has begun to assemble, it potentially also merges with creating a public banking option.

What does banking have to do with delivering the mail? Nothing, today. But in the future? A Postal Service bank — a model that is successful in several countries around the world — would not only provide the post office with a reliable source of income, it would provide badly needed basic, inexpensive banking services for under-served populations.

Such an idea is not necessarily controversial. Despite the management of the U.S. Postal Service supporting privatization measures for many years, its office of the inspector general quietly issued a paper a year ago in which it said offering financial services could provide almost US$9 billion per year in new revenue while providing badly needed services to tens of millions of under-served people who are currently at the mercy of predatory “pay-day lenders” and other high-interest usurers.

The basis for this estimate is that “people trying to make it paycheck to paycheck” spend an estimated $89 billion per year on interest and fees on alternative financial services; the paper’s revenue estimate is based on the Postal Service, by offering low-cost services, capturing 10 percent of what is currently spent on those businesses. But the Postal Service inspector general’s office went out of its way not to upset bankers, watering down its proposal to a “partner[ship] with banks and other [mainstream] financial institutions” to “create a ‘win-win’ situation.”

Lupin field, New Zealand (photo by Michael Button)

Lupin field, New Zealand (photo by Michael Button)

If big commercial banks are winning, the rest of us will be losing. Rather than floating fantasies of swimming with ever-hungry financial sharks who are never satiated, thereby disemboweling your own idea, why not set up an independent postal bank? Doing so is precisely what the new president of the American Postal Workers Union, Mark Dimondstein, proposes. He says:

“Services such as basic, non-profit banking would be a great and real benefit to the people of this country, and a good answer to what I call ‘the Wall Street Banksters,’ who devastated the economy and with it the lives of millions of people.”

More than one-third of U.S. post offices are located in ZIP codes where no bank is located; another 20 percent are located in areas with only one bank. Providing low-cost services would help tens of millions struggling to survive financially avoid the trap of “pay-day lenders” who charge an effective annual interest rate of 391 percent, according to the inspector general paper. A typical “pay-day” loan of $395 costs the borrower an average of $520 in interest and fees on top of the principal.

Postal banking already a success

Countries as varied as Germany, Japan and New Zealand have successful postal banking services. The Japan Post Bank is the country’s largest holder of personal savings.

For more than a century, what is now known as the Japan Post Bank accepted deposits but did not lend, instead handing deposits to the Ministry of Finance, which used the funds to finance public-works projects. In 2001, the bank began direct lending instead of sending its deposits to the ministry. But this was accompanied by a privatization scheme. That scheme was halted in 2009, and has not been re-instituted despite the return of the conservative Liberal Democratic Party that originally pushed for the privatization. The bank would be a huge prize for private bankers, as it reported net income of ¥355 billion (US$3.0 billion) for its fiscal year 2014.

Germany’s Postbank is also highly profitable, reporting fiscal-year 2014 earnings of €431 million (US$473 million). The bank specializes in providing “simple, low-cost products for day-to-day needs,” and says it has 14 million clients, including more than 300,000 small and mid-sized companies.

New Zealand’s Kiwibank was founded in 2002. Big Australian banks had controlled 80 percent of New Zealand’s retail banking, and those multi-nationals were quick to close less profitable branches. To provide financial services to underserved communities, and keep capital at home for local investment, the New Zealand government established Kiwibank as a subsidiary of New Zealand Post, putting its branches in post offices. The results were swift, reports public-banking advocate Ellen Brown:

“Suddenly, New Zealanders had a choice in banking. In an early ‘move your money’ campaign, they voted with their feet. In an island nation of only 4 million people, in its first five years Kiwibank attracted 500,000 customers away from the big banks. It consistently earns the nation’s highest customer satisfaction ratings, forcing the Australia-owned banks to improve their service in order to compete.”

Kiwibank reported net income of NZ$100 million (US$76 million) for its fiscal year 2014. The bank reports it now has 860,000 customers.

The Republican assault on the U.S. post office

Although offering basic banking services would boost revenue for the U.S. Postal Service, it would currently be on stable financial foundations were it not for a Republican plan signed into law in 2006 requiring the Postal Service to pre-fund its pension costs for the next 75 years in only 10 years. No private business could or would do such a thing. The results are what would be expected: In the last four years before the pre-funding requirement (2003 to 2006), the Postal Service had a composite profit of US$9.3 billion; it has had massive losses ever since.

It is true that the volume handled by the post office has declined in recent years with the rise of the Internet. Setting up a postal banking system would offset the resulting fall in revenue. But rather than expand services to provide a sounder foundation, corporate ideology, promoted by those with a vested interest, is instead causing a push for the dismantling of the Postal Service and the privatization of its delivery services.

For example, a study by a “think tank” calling itself the National Academy of Public Administration prepared a report that called for a near total privatization of the post office. Two of the four authors had direct interests in privatization and a third has worked for a series of Right-wing extremist “think tanks” that consistently demand the privatization of everything in the public domain. The major funder of the study was Pitney Bowes Inc., which stands to directly benefit; it already earns billions of dollars from its mail-processing facilities and would be in a good position to grab much of the Postal Service’s business.

FedEx Corp. and United Parcel Service Inc., the two largest U.S. private delivery services, also stand to benefit from the destruction of the Postal Service. Both companies employ large fleets of lobbyists and are heavy donors to members of Congress.

Heavy pressure to close post offices and mail-sorting facilities is part of the privatization drive. But the limited research done on closings indicates that closings actually cost more than the savings generated. A study conducted by University of Wisconsin students examined what would happen if one of the seven post offices in a rural Wisconsin county were closed. The study found that the Postal Service would save $560,000 over seven years by closing a post office but the added costs from residents forced to drive further to access a post office would be $1.3 million over seven years. Thus, the overall cost to the community would be more than $700,000.

Another example of the costs to small communities can be found in the small community of Prairie City, South Dakota. Closing the post office there saved $19,000. The nearest hospital and pharmacy is 40 miles away, and when medicine was needed in Prairie City, the pharmacist 40 miles away would hand it to the mail carrier for same-day delivery. Now medicine deliveries take two to three days, an article in Naked Capitalism reports. What is the price of a life that might be compromised because of this delay?

Vowing a new militancy

A slate of local officials pledged to mount much more militant tactics swept into the leadership of the American Postal Workers Union last fall, winning seven of nine contested seats. Union President Dimondstein, elected with this group, said he seeks a “cultural shift” to an organizing model of unionism from a service model. In an interview with Socialist Worker, he said:

“People are disengaged not because they don’t care but because they see their union dues as a premium to an insurance company or as lawyer’s fees. We need to retool, to retrain people to see the union as themselves. We need to encourage workers to take their grievances directly to the boss, in groups, not just file paperwork and wait for union officials to service them. We need more of a movement, a sense of connection to the larger community which will give postal workers hope and confidence.”

That postal workers are in a position to negotiate is because they defied their union leadership in 1970 to engage in an illegal strike that spread across the country to more than 30 major cities — an example praised by the new American Postal Workers Union leadership. The union, one of four that represent postal workers, began talks on a new contract in February, vowing to end a disastrous three-tiered contact negotiated by previous union leaders. That contract calls for reduced pay for new hires and allows people working only 30 hours a week to be considered “full time.”

At the opening session of the contract talks, the American Postal Workers Union leadership was joined by the president of the National Association of Letter Carriers, Fredic Rolando, in a signal that the postal workers won’t be divided by job description. (The APWU represents clerks, drivers and maintenance workers.) The APWU said it would not only negotiate better pay, but “will be putting forth proposals for maintaining overnight delivery standards, halting plant closings, expanding hours of service and staffing for the customers, and providing financial services such as postal banking.”

To back their new militancy, postal unions have formed an alliance with several dozen labor and advocacy groups called A Grand Alliance to Save Our Public Postal Service. The alliance vows that “The public good must not be sacrificed for the sake of private investment and profit.”

No one group or organization can turn the tide against neoliberalism, but an organized fightback must begin somewhere by someone. If there is going to be serious follow-through on all these initiatives, a dramatic departure from the methodologies of U.S. unions of recent decades would be a welcome start — although this can’t be effective without broad popular support and activity capable of solidarity work and overturning anti-union laws such as Taft-Hartley.

Reforms, however welcome, can only achieve so much and are always temporary. Struggles for reform will be fought again and again, becoming more difficult to sustain, as long as economic systems stress private profit rather than public good.

Labor rights respected nowhere on Earth

If labor rights were a test, the entire world would flunk. Basic labor rights are under sustained assault, but just how badly is quantified in a just released report by the International Trade Union Confederation in which every country scored below 50 percent.

To better summarize these results, the ITUC grouped the world’s countries into five rankings, with a ranking of one signifying the countries with the (relatively) best conditions for working people and a ranking of five signifying those with the most repressive conditions. Most of those countries with a ranking of one were in the European Union, but this group also included Togo and Uruguay. Those with a ranking of five include some of the world’s most repressive countries, including China and Saudi Arabia, but also Greece, Turkey and South Korea. The United States has a ranking of four. So much for the home of the free.

The ITUC describes itself as “a confederation of national trade union centres” that includes 325 affiliated organizations in 161 countries and territories. Its Global Rights Index summarizes data on the abuse of trade union rights around the world. The report’s introduction states:

“The increase in precarious employment relationships has further deepened the vulnerability of workers to discrimination at the workplace. Governments in the vast majority of countries have been convinced to alter their labour legislation to encourage various forms of precarious work. In virtually all countries, temporary work, agency work, subcontracting and other types of informal work are expanding rapidly. Given their unstable employment situation and the high risk of dismissal, precarious workers are discouraged from joining unions and being covered by collective bargaining. This means that workers in precarious forms of employment do not have the necessary support to improve their work situation.”

The report collects information on each country for 97 indicators derived from International Labour Organization standards. These indicators relate to one of five categories: Fundamental civil liberties; the right to establish or join unions; trade union activities; the right to collective bargaining; and the right to strike. It assigns a simple yes or no to each of the 97 questions rather than a more gradated system to eliminate any potential bias and because each is a “universally binding obligation” that all countries should respect.

Therefore, 97 is the highest possible score for any country. The highest score attained, however, was 43. The lowest was zero. Therefore, the study grouped the world’s countries into the five rankings, with each ranking containing roughly one-fifth of the total. The ITUC’s map of workers’ rights is below, with the brightest yellow those countries with a ranking of one (those with the most respect for rights) and the deepest orange and red those with a ranking of five (those with the least respect for rights).

ITUC map of workers' rights

ITUC map of workers’ rights

Countries with a ranking of four, such as the United States, Honduras, Indonesia and Kuwait, “have reported systematic violations. The government and/or companies are engaged in serious efforts to crush the collective voice of workers putting fundamental rights under continuous threat.” Only somewhat better are those with a ranking of three, such as Australia, Canada, Singapore and the United Kingdom, where “Government and/or companies are regularly interfering in collective labour rights or are failing to fully guarantee important aspects of these rights. There are deficiencies in laws and/or certain practices which make frequent violations possible.”

Those conditions are reflected in the dwindling number of strikes. During the 1970s, an average of During the 1970s, an average of 289 work stoppages involving 1,000 or more workers took place annually in the United States. In 2009, there were no more than five. Lockouts, in which management bars employees from working, have become more common, reaching record levels this decade.

That is a worldwide phenomenon, of course, in no way limited to any one country, including the one imposes its will on the rest of the world through a misguided ideology of “exceptionalism.” The ITUC notes in its report:

“[W]orkers are struggling everywhere for their right to collective representation and decent work deficits exist in varying degrees in most countries. Abuses of rights are getting worse not better and too many countries take no responsibility for protecting workers rights in a national context or through corporate supply chains. Based on reports from affiliates, workers in at least 53 countries have either been dismissed or suspended from their jobs for attempting to negotiate better working conditions. In the vast majority of these cases the national legislation offered either no protection or did not provide dissuasive sanctions in order to hold abusive employers accountable. Indeed, employers and governments are complicit in silencing workers’ voices against exploitation.”

A continuing race to the bottom is all that is on offer. Capitalists are well organized, across borders. Working people had better do the same.

Republicans, corporate interests intentionally destroying Post Office

Privatization is a polite word for corporate self-interest. When calls for privatization arise, it is always useful to see who’s interest is being served.

Take the United States Postal Service. The Republican Party is doing its best to destroy a national institution that provides hundreds of thousands of unionized jobs. (The Democratic Party is doing nothing, perhaps waiting for a signal from its corporate benefactors.) Merely reading “unionized” in front of “jobs” leads to the conclusion that ideology is behind this latest attack on working people, and surely a Right-wing desire to eliminate large unions and drive down wages further is a significant motivation.

Not the sole motivation, however. Privatizing the Postal Service would mean big new business for delivery services and companies that supply postal products. Advocates of privatization recently sought to inject more wind into their sails with the release of a study by a “think tank” with the bland-sounding name of National Academy of Public Administration. The “study” has yet to published in full, but its four authors, described as “postal industry thought leaders,” have published their conclusion — a call for a near total privatization.

Just who are these four “postal industry thought leaders”? With one exception, they are people who have a vested interest in privatization. Surprise! Here they are:

  • Ed Gleiman, a former member of the Postal Rate Commission, has since become a lobbyist for the Direct Marketing Association, a group representing large mailers.
  • John Nolan, a deputy postmaster general during the Bush II/Cheney administration, is currently a board member for Streamlite, a business-to-consumer lightweight package delivery service. He is also a senior advisor to The Western Union Co., another corporation that stands to benefit from dismantling the Postal Service.
  • Edward Hudgins is a director of the Atlas Society (“Atlas” as in Ayn Rand) and previously worked for the Cato Institute and Heritage Foundation. The latter two organizations are manically dedicated to destroying all protections for employees, while the phantasmagorical absurdity of Ayn Rand’s novels bear as much relation to reality as an elephant that flies.
  • George Gould, a former political director for the National Association of Letter Carriers union, doesn’t appear to have an ideological axe to grind as do the other three “leaders” and perhaps is guilty of nothing more than absorbing neoliberal ideology. Critics of the NALC say that the union has failed to fight for its membership, and Mr. Gould’s participation in this “study” might provide those critics additional fuel.

Direct funding by a corporation that stands to benefit

To round out the picture, the major funder of the postal privatization “study” is Pitney Bowes Inc., which stands to directly benefit. Greg Bell, executive vice president of the American Postal Workers Union, writes:

“Pitney Bowes, the company that is funding the review, stands to be a major beneficiary. The company is widely known as a provider of mailing equipment, but it is also a major mail ‘pre-sorter.’ The company takes advantage of generous pre-sort discounts offered by the Postal Service to provide outsourced services to high-volume mailers. In 2011, Pitney Bowes operated 41 mail processing facilities and generated $5.3 billion in revenue. Pitney Bowes would certainly snatch up a major portion of USPS revenue if it were given the chance.”

FedEx Corp. and United Parcel Service Inc., the two largest U.S. private delivery services, also stand to benefit from the destruction of the Postal Service. FedEx is one of the heaviest spenders on political donations and lobbying, and employs several dozen lobbyists who formerly worked in government, according to the Center for Responsive Politics. UPS is also a heavy spender on donations and lobbying, while employing its own team of lobbyists who formerly worked in government.

The National Academy of Public Administration “study” advocates a bizarre “hybrid” scheme in which all postal activities will be privatized, except for the “final mile” — a Postal Service worker would deliver mail and packages to mailboxes and other final destinations. The paper states:

“In the ‘final mile’ package strategy, private sector consolidators compete to pickup, process, and transport hundreds of millions of packages. Shippers pay the consolidators to prepare and transport the mail for ‘last mile’ delivery by USPS letter carriers. The consolidators pay USPS a delivery charge. Upstream competition among private sector providers promotes efficiencies that lead to better service and lower overall prices.”

Private oligopolies are not known for lowering prices, however, and the paper’s assertion that regulation counter excesses is refuted by the many industries in which regulation is toothless, and in which agency chiefs routinely cycle back to their primary roles as corporate executives. We need only look at vastly inflated pharmaceutical prices, runaway financial legerdemain and a lack of resolve in food safety to know that private delivery companies will easily evade any serious scrutiny, piling up profits while cutting jobs, wages and benefits. The only certainty is that large numbers of jobs will be lost.

Who can fund 75 years of pensions in 10 years?

A government institution painted as financially troubled is easier to be targeted for corporate plunder than one on firm footing, so, voilà, congressional Republicans cooked up a devastating scheme. A congressional bill signed into law in 2006 requires the Postal Service to pre-fund its pension costs for the next 75 years in only 10 years. This is unheard of; certainly no private business would or could do such a thing. This preposterous requirement — why do I keep seeing sneering villains twisting their mustaches like in those movies of a century ago? — has saddled the Postal Service with a $16 billion deficit.

Hoping to maintain corporate momentum, a leading congressional Republican, Darrell Issa, chairman of the House Oversight and Government Reform Committee, has pushed a bill that would allow an oversight committee to modify union contracts. Representative Issa’s bill, if passed, would allow unilateral cuts to previously bargained wages.

The National Association of Letter Carriers, however, has already approved wage cuts. The latest contract increases the number of “temporary” mail carriers who have inferior wages and benefits, setting a up a two-tier system in which newer workers have lower pay, not fundamentally different than the new two-tier pay systems at General Motors — taxpayers loaned the money to GM to keep it afloat, and the reward is more austerity. These deals in turn serve to depress wages elsewhere by setting lower standards.

In the meantime, tens of thousands of Postal Service jobs have already been eliminated. A statement issued by Detroit Workers’ Voice, analyzing the attacks on postal unions, says:

“Postal workers are being run over time after time, and the strategy of the leadership of the postal unions has proved completely ineffective in stopping this. Yes, the union leaders sometimes have snappy criticisms against management. But they collaborate with management. Thus, when new contracts with management help the USPS decimate the workforce, the main union officials hide the setbacks or justify them. Insofar as there is struggle against the USPS bosses, it is within strict limits. Organizing the rank and file for struggles within the postal facilities is avoided. Public actions of any kind are rare. Militant action that would really press management is off limits.”

Postal Service unions, of course, are hardly unique in their timidity. Fightbacks are possible, as the Chicago teachers’ union demonstrated last year. The Chicago teachers spent months preparing parents and the city as a whole for a possible strike as neoliberal Mayor Rahm Emanuel sought to break the union and replace public schools accountable to the public with private, non-union charter schools under corporate control.

There were critics who complained that the teachers didn’t win many advances and ended the strike too quickly, but it is more realistic to analyze the strike in a fuller context — given the totality of the circumstances, the Chicago teachers won as much as they could have and would have begun to jeopardize the massive public support behind them, an indispensable force as the city’s other unions did nothing to help.

No union, no matter how militant, can win substantial gains without a movement that mobilizes sustained support from those unionized, non-unionized and unemployed — a movement that acts on the understanding that an injury to one is an injury to all. Unions aren’t making efforts to create that support, instead at most narrowly attempting to slightly slow down the defeats to their specific memberships. The structural causes of our present-day world of austerity are far larger than any union federation nor are they contained with any single geographical unit. The entire history of capitalism has led us to today’s world.

An injury to one, or to one group of employees, truly is an injury to all. Enormous power is concentrated into the hands of financiers and industrialists, and there are no limits to the injuries they and the politicians who serve them intend to inflict. Putting our heads in the sand and hoping it’s the other person who gets it only delays the injury to one’s self and makes it worse when they come for you.