In Light Of The Auto Workers Strike: "The Next Economy The End of the Working Class"

Keeping in mind that this was written in 2017 it is spectacularly prescient.

There are two groups that wannabe elites really don't care for. Firstly, the self-employed as they still seem to be too cussedly independent in mind and spirit for some tastes.

And secondly, the middle-class, probably because they have the wherewithal to make some life decisions for themselves.

The third group, the unionized workers I can't get a handle on, though it seems there is a nascent movement to unionize Silicon Valley and Seattle.

From The American Interest, August 30, 2017

A terrible loss that shouldn’t be mourned.

Increased income inequality; wage stagnation; skill-biased technological change; productivity growth slowdown; rising college wage premium; labor-market polarization; declining prime-age labor force participation; low intergenerational relative mobility; declining absolute mobility—all of these are concepts developed by economists to describe the dimming prospects for ordinary American workers. Taken together, they inform the consensus view that something is wrong with the American economy that isn’t going away anytime soon.

But if we follow the experts in looking at our problems solely from an economic perspective, we will fail to appreciate the true gravity of our situation. Yes, the relevant data on “real” or inflation-adjusted incomes have been disappointing and worrisome for decades. In particular, the sharp rise in income inequality, created mostly by a rollicking rise in the top 1 percent of incomes, has meant that incomes for typical American households have not kept pace with the overall growth of the economy. Nevertheless, a careful and dispassionate review of the data shows that incomes continued to inch upwards since the 1970s. Indeed, of those who “fell” out of middle-class status over the past 25 years, depending on how one defines it, a good many fell “up” to higher income brackets. Although the Great Recession knocked incomes downward, they have now recovered almost all the ground they lost. When we factor in the fact that comparisons of real incomes can never capture access to new products that previously were unavailable at any price, the reasonable conclusion is that overall material living standards in the United States today are at their highest levels ever. Relative stagnation may frustrate our expectations, but isn’t the same thing as collapse.

If we pull back from a narrow focus on incomes and purchasing power, however, we see something much more troubling than economic stagnation. Outside a well-educated and comfortable elite comprising 20-25 percent of Americans, we see unmistakable signs of social collapse. We see, more precisely, social disintegration—the progressive unraveling of the human connections that give life structure and meaning: declining attachment to work; declining participation in community life; declining rates of marriage and two-parent childrearing.¹

This is a genuine crisis, but its roots are spiritual, not material, deprivation. Among whites, whose fall has been from greater heights, the spreading anomie has boiled over into headline-grabbing acts of self-destructive desperation. First, the celebrated findings of Anne Case and Angus Deaton have alerted us to a shocking rise in mortality among middle-aged whites, fueled by suicide, substance abuse—opioids make headlines these days but they hardly exhaust the list—and other “deaths of despair.”2 And this past November, whites in Rust Belt states made the difference in putting the incompetent demagogue Donald Trump into the White House.

What we are witnessing is the human wreckage of a great historical turning point, a profound change in the social requirements of economic life. We have come to the end of the working class.

We still use “working class” to refer to a big chunk of the population—to a first approximation, people without a four-year college degree, since those are the people now most likely to be stuck with society’s lowest-paying, lowest-status jobs. But as an industrial concept in a post-industrial world, the term doesn’t really fit anymore. Historian Jefferson Cowie had it right when he gave his history Stayin’ Alive the subtitle The 1970s and the Last Days of the Working Class, implying that the coming of the post-industrial economy ushered in a transition to a post-working class. Or, to use sociologist Andrew Cherlin’s formulation, a “would-be working class—the individuals who would have taken the industrial jobs we used to have.”

The working class was a distinctive historical phenomenon with real internal coherence. Its members shared a whole set of binding institutions (most prominently, labor unions), an ethos of solidarity and resistance to corporate exploitation, and a genuine pride about their place and role in society. Their successors, by contrast, are just an aggregation of loose, unconnected individuals, defined in the mirror of everyday life by failure and exclusion. They failed to get the educational credentials needed to enter the meritocracy, from which they are therefore excluded. That failure puts them on the outside looking in, with no place of their own to give them a sense of belonging, status, and, above all, dignity.

Here then is the social reality that the narrowly economic perspective cannot apprehend. A way of life has died, and with it a vital source of identity. In the aftermath, many things are falling apart—local economies, communities, families, lives.

This slow-motion catastrophe has been triggered by a fundamental change in how the capitalist division of labor is organized. From the first stirrings of the Industrial Revolution in the 18th century until relatively recently, the miraculous technological progress and wealth creation of modern economic growth depended on large inputs of unskilled, physically demanding labor. That is no longer the case in the United States or other advanced economies. Between automation and offshoring, our country’s most technologically dynamic industries—the ones that account for the lion’s share of innovation and productivity growth—now make little use of American manual labor.

The U.S. economy still employs large numbers of less-skilled workers, of course. They exist in plentiful supply, and U.S. labor markets are functional enough to roughly match that supply with demand for it. But all of this is occurring in what are now the backwaters of economic life. The dynamic sectors that propel the whole system forward, and on which hinge hopes for continued improvement in material living conditions, don’t have much need today for callused hands and strong backs—and will have less need every year going forward.

Economists describe this situation drily as “skill-biased technological change”—in other words, innovation that increases the demand for highly skilled specialists relative to ordinary workers. They contrast the current dynamics to the skill-neutral transition from an agrarian to an industrial economy. Then, workers displaced from farm jobs by mechanization could find factory work without first having to acquire any new specialized expertise. By contrast, former steel and autoworkers in the Rust Belt did not have the skills needed to take advantage of the new job opportunities created by the information technology revolution.

Here again, exclusive reliance on the tools of economics fails to convey the full measure of what has happened. In the heyday of the American working class during the late 1940s, 1950s, and 1960s, the position of workers in society was buttressed by more than simply robust demand for their skills and effort. First, they had law and policy on their side. The Wagner Act of 1935 created a path toward mass unionization of unskilled industrial workers and a regime for collective bargaining on wages and working conditions. And during World War II, the Federal government actively promoted unionization in war production plants. As a result, some three-quarters of blue-collar workers, comprising over a third of the total American workforce, were union members by the early 1950s. The Wagner Act’s legal structure allowed workers to amass bargaining power and direct it in unison against management, suppressing wage competition among workers across whole industries. Unionized workers were thus empowered to negotiate wages roughly 10 to 15 percent above market rates, as well as a whole raft of workplace protections.

It is important to note that the strictly legal advantages enjoyed by labor at the height of its powers have diminished very little since then. There has been only one significant retrenchment of union powers since the Wagner Act, and that occurred with the passage (over President Truman’s veto) of the Taft-Hartley Act in 1947—a few years before organized labor reached its high-water mark. What really transformed labor law from words on a page into real power was the second great prop of the working class’s position in society: collective action. Congress did not unionize U.S. industry; mass action did, never more dramatically than in the great General Motors sit-down strike of 1936–37, which led to the unionization of the U.S. auto industry. And once unions were in place, labor’s negotiating strength hinged on the credibility of the threat of strikes. Coming out of World War II, when strikes had been strongly discouraged, American workers hammered home the seriousness of that threat with a wave of labor actions, as more than five million workers went on strike during the year after V-J Day—the most strike-ridden year in American history.

This militancy and group cohesion paved the way for the 1950 “Treaty of Detroit” between Charlie Wilson’s General Motors and Walter Reuther’s United Automobile Workers. The deal provided the basic template for labor’s postwar ascendancy, in which workers got automatic cost-of-living adjustments and productivity-based wage increases while production schedules, pricing, investment, and technological change were all conceded to fall within the “managerial prerogative.” “GM may have paid a billion for peace,” wrote Daniel Bell, then a young reporter for Fortune, but “it got a bargain.”....

....MUCH MORE

....Even in the glory days of the Treaty of Detroit, the pact between capital and labor was a Faustian bargain. The wages paid to industrial labor were always a bribe to surrender one’s brain, and part of one’s soul, at the factory gate. In time the physical assaults and indignities of industrial work softened, and the pay packet fattened to afford material comforts earlier workers would never have dreamed of enjoying—but, however sweetened, it was still a deal with the devil.....

Sometimes I wonder if there is a plan. And if that plan is to take down the American automobile manufacturing industry and turn the business over to the Chinese.

All while using the laborers as patsies and then scapegoats.