Tariffs!

AI generated cartoon representing tariffs

The article is by Jason Koslowski, and it appears in Left Voice under the title Notes from a Wall Street Sewer: Tariff Edition. Mr. Koslowski identifies himself as "a contingent college teacher and union organizer who lives in Philadelphia." In other words, he works for peanuts, having to share his salary with the zillion other PhDs out there seeking a career in academia.

I assume he teaches English given the quality of writing, which is good. 

He gets the most important fact correct: Tariffs are "a tax on imported things." The reason for tariffs is supposedly to make foreign goods more expensive for American consumers, and thereby encouraging us to buy domestically. Or, alternatively, to incentivize the producer to manufacture their products in the US. In principle, tariffs should lower the trade deficit.

He remarks, correctly, that this usually doesn't work, writing "...this plan did not work in 2016. Also, pretty much every expert everywhere says it’s not going to work this time."

I don't blame Mr. Koslowski for taking Trump's justification for tariffs at face value. But in this case I think he's mistaken. I think Trump understands that tariffs won't likely reduce the trade deficit. What he really wants to do is raise taxes. And tariffs, especially disguised as repatriating factories to the US, is a politically acceptable way to raise taxes.

In other words, tariffs are--first and foremost--a tax increase. That's entirely the point. The uncertainty arises when one asks Who is gonna pay the taxes? This turns out not to be an easy question to answer.

The obvious answer, which both our contingent college teacher and "experts" suggest isn't likely, is that American consumers will pay the taxes. But here's the rub: when confronted with a tax increase, people adjust their behavior to avoid paying the taxes. American consumers are no exception: they can substitute the foreign products with American products, or they can decide they don't need as much of the tariffed goods after all. Eg, if Mexican avocados are tariffed, then perhaps our affection for guacamole will be lessened. This option, if it happens, would reduce the trade deficit.

Or it could happen that the foreign producers desperately need the revenue, and so they reduce their prices sufficiently to maintain market share. I think Chinese manufacturers may fall into this category--the Chinese need the US dollar reserve currency in order to buy food and oil from abroad, regardless of whether they end up taking a loss in Yuan terms. This is called mercantilism. In this case it is Chinese producers (both workers & capitalists) who pay the tax. There will be no net decrease in the trade deficit.

A third option is that--because, eg, Americans by fewer Canadian products--that Canadians just simply don't have enough money to buy American products. The result is that the Canadian dollar will decline in value compared to the US dollar. This is good for the Canadian manufacturer because of the favorable exchange rate their products sold in the US are no more expensive than they were before the tariffs were imposed. But Canadian consumers are still worse off--they still won't be able to afford that vacation in Florida. In this case there might be an increase in the trade deficit (Canadians sell just as much, but buy less), and it is the Canadian consumer who ends up paying the tax.

Finally, it's possible that Walmart generates sufficiently high margin on, eg, Mexican avocados that they can just pay the tariff as extra overhead. In this case the Walmart shareholder (and eventually, employees) are paying the tariff tax. This will also have no effect on the trade deficit.

None of these options are mutually exclusive, and it's likely that they will all apply to some degree. Of this we can be certain: every option reduces trade and therefore reduces wealth. As such tariffs are bad for the economy. But that's true for any tax increase--all taxes are bad for the economy. The only advantage of tariffs is that they're politically more palatable.

Of course it gets even more complicated. Mr. Koslowski mentions that other countries will levy retaliatory tariffs, ie, raising taxes even more! And it spirals down from there. But I think this problem is somewhat limited because: 1) the US runs a large trade deficit with the rest of the world, so other countries need to sell to the US a lot more than the US needs to buy from them. So the US will win this kind of war. And 2) the US depends less on foreign trade than almost any country on earth, so it's relatively immune from retaliatory tariffs.

In short, apart from being a tax increase, the effects of tariffs are near impossible to forecast. There are just too many options, followed by options in response to prior options, to know how this is gonna proceed. Anybody who predicts a supply shortage/inflation/higher price for Americans/a recession, or any other disaster may be right, but they're most likely wrong. I predict that Trump's tariffs won't have a huge effect on the American economy. People will respond by minimizing their tax bill, and eventually not much tax will actually be collected.

Mr. Koslowski damages his credibility with his cartoon-like description of the US economy. He writes

I think we should see the tariffs as part of a magic trick Trump is trying to pull off. That trick is to hold together an unstable — that’s the key word — class alliance. To get elected, he had to win over very different sections of the different classes in society. 

First sector of this support: large chunks of the ruling class, the “big bourgeoisie,” the very rich, majority shareholders and big CEOs of big companies. ...

He won a lot of them over. Trump’s selling his party as the most pro-business of the two parties. (Elections are lovers’ quarrels between segments of our masters.) He’s offering massive tax breaks for the rich, again. He’s deregulating the economy, he’s slashing protections on the environment — all this is great for profits.

One part of his appeal to the ruling rich: break the backs of the workers. 

His premise is that there is a fight-to-the-death between bosses and workers. I've discussed this in many previous blog posts, and it's not true. While they have some things to fight over, for the most part bosses and workers have a common purpose: sell as much to consumers as possible.

He asserts that the "big bourgeoisie" have a common interest--namely they're for tariffs. Many of them (in industries like agriculture, auto manufacturing, retailers, etc.) are very much against tariffs. Others (such as tech firms) don't care because they don't export material goods. I don't think there are many big businesses who actually think tariffs work in their favor.

The biggest supporters of tariffs are in fact the unions. Many union members were present at Trump's "Liberation Day" announcement. UAW head Shawn Fain is a strong supporter. And no wonder--tariffs allow unionized workers to collect a rent on top of the market wage--eg, a salary increase roughly equal to the tariff.

Mr. Koslowski's only evidence that Trump is anti-worker is "...he's attacking the National Labor Relations Board." This is small potatoes--the NLRB plays a bit role in the American economy. Indeed, the whole idea of collective bargaining is so last century--supply chains and consumer choices are too diffuse for a strike against any one company to have much significance. Much more impactful are unions as lobbying and political organizations, and it is in precisely that role that Trump is trying to reach out to them. A new tariff will strengthen the union far more than any collective bargaining agreement.

Personally, I'm on the side of Mr. Koslowski's cartoonish bourgeoisie: I think tariffs are on net a bad thing for the economy. They're a tax increase. But politically they make a lot of sense, and for Donald Trump they look to be a winning issue.

Further Reading:

• The General Strike Fizzles
• Left Voice Demands 5 Things of UAW's Shawn Fain
• Tradable vs. Non-Tradable Goods

Trump & the Working Class

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Left Voice authors Professor James Dennis Hoff and Jason Koslowski, write an article entitled Is the U.S. Labor Movement Ready for Trump 2.0?. It's a very long article and I'm not going to go through it line by line. But it is truly weird that intelligent, supposedly well-informed people--professors even--should get it all so spectacularly wrong.

They fail in three ways:

1. They don't understand class struggle.
2. They don't understand the role of the unions.
3. They don't know what "solidarity" means.

After an introductory paragraph describing the way Trump--at the behest of the "ruling class"--will "attack" unions, our two academics write

Building a labor movement that can fight these attacks and grow stronger in the process will require not only a radical break with the business unionism of the past, but the active organization and mobilization of the entire working class. It’s up to rank-and-file workers to protect ourselves, not just against the hammer blows on unions that are coming our way, but against the devastating attacks on the working class meant to divide our power, like mass deportations and bigoted anti-trans legislation. 

Their model of society is that the "working class" is in an all-or-nothing, fight-to-the-death struggle against the bourgeoisie--aka the "ruling class." Of course this is wrong--for otherwise why have the workers put up with "business unionism" for all these decades (if not centuries)? The only answer our academic friends offer is that the workers are too stupid to behave otherwise. What they require is leadership from somebody who knows better and who can lead them to the promised land.

Obviously, if all you need for your liberation is a bunch of know-it-alls who've got everything figured out for you, then who better to ask than a couple of college professors? Even better--these college professors imagine themselves as part of the Vanguard Party. There you go--problem solved. Just follow whatever they say and all will turn out just fine.

For proof, just ask the folks in Cuba, Venezuela or North Korea to describe the benefits of following a Vanguard Party.

The problem with our professor-friends' account of reality is that it's wrong. Workers and their bosses do have disagreements, and there is something to fight about. But mostly they're on the same side, that is, both benefit when the firm--both workers and bosses--increases total revenue. They can argue about how the revenue is divided between them, but without the revenue, then there's nothing to fight over.

Have you ever wondered why Starbucks baristas work so hard to get your drink precisely right? It's not just that the boss will get mad if they don't--but even worse, their fellow employees will be just as mad. That's because--deep down, in their heart of hearts--everybody in the store knows that if the customer isn't happy, then the baristas are not long for employment.

The mantra of capitalism is shop till you drop. The mark of a successful capitalist society is a high level of consumption. Because without customers there will be no revenue, and without revenue, nobody--neither worker nor boss--is gonna make any money. The customer is always right! 

The leadership that our academics deride as "business unionism" understands this. A "business union" works to maximize revenue--and then also maximize the fraction of which is paid to the workers. That's why, for example, the UAW was very selective about its strike targets. They understood that a general strike would cut revenue to zero and hurt the workers more than the bosses. So even when on strike, unions try very hard to maintain or even increase revenue.

Our academic friends will never defeat business unionism, because that's the strategy that makes the most sense for workers. Workers, after all, are smarter than academics for one important reason, ie, academics don't have any customers. They get paid by the government no matter how bad they are at their jobs. That's especially true for Professor Hoff, who is a tenured professor--which means regardless of incompetence he can't be fired. His work life is completely different from that of a Starbucks barista.

So the professors misunderstand the working class and the role of unions. But even the unions don't understand the role of unions! That's because--like every other large organization--they evolve into a self-interested bureaucracy. The union is often more interested in maximizing its own revenue rather than the wages of its members. In extreme cases the union is taken over by the Mafia and simply becomes an extortion racket. Las Vegas casinos are mostly unionized--thanks to the diligent efforts of the Chicago Outfit to skim as much revenue off the top as they could. The workers didn't benefit at all.

Even honest unions have to worry about their income--will they earn enough money in dues to make up for the cost of organizing? For retail businesses the answer seems to be mostly No. Neither Starbucks nor Amazon have profit margins big enough to make it worthwhile for a union to organize them. That's why the Teamsters' Union will likely never succeed at getting a contract at Amazon's JFK8 warehouse. The fledgling Starbucks union will be equally unsuccessful, for the same reason. The profit margins (typically 3%) are too small to keep a union solvent.

Our professor friends never have to worry about that. Colleges and Universities don't have to make a profit. The teachers' unions are really good at ripping off taxpayers. That's why they don't understand the conflict between unions and their members.

Finally, we get to "solidarity." This is what the professors write (links omitted):

Without a radical shift in strategy, labor may wind up squandering the relative advantages it still has. 

These include record-high levels of popular support for unions, an increasingly pro-labor workforce made up of young workers ready to organize, and the likelihood of increased class struggle as Trump attempts to carry out the worst of his proposed agenda against workers, immigrants, women, and trans people. A plank of Trump’s platform is the mass deportation of immigrants — which is not just an attack on immigrants, but also a frontal assault on the working class itself, to divide and weaken it. None of our union leaders have spoken yet of this threat. But stopping it requires a labor movement willing to strike for more than its immediate needs at its own workplaces. Stopping Trump here calls for a willingness of workers to strike in solidarity with immigrants and against the state and ICE — technically against the law. Here, again, relying on the state to support unions will weaken us, not strengthen us.

The Militant (published by the Socialist Workers Party) has been touting the abundance of "solidarity" in Cuba for decades now--most recently here. Solidarity is all they've got there--no food, no water, no medicines, no electricity. The next time our gracious professors encounter a homeless bum, I'm sure he'll be grateful for their "solidarity."

Even the professors have to acknowledge that Trump won the votes of the majority of the working class. They attribute this to a combination of workers being stupid, and/or being racist. But our professors are wrong, of course. The working class is a lot smarter than the they are.

For example, Trotskyist academics will have you believe that allowing more immigrants is good for the working class because of "solidarity." Professor Hoff can believe this because he has tenure and therefore never has to look for a job. But most people realize that if you're looking for a job, you're competing with other similarly qualified people. And more, if there are a lot of similarly qualified people then the average wage for those folks will go down. That's Professor Koslowski's problem--he's an adjunct lecturer working for peanuts because there are so many other folks with useless PhDs wanting the same opportunity.

Then consider the bizarre list of folks that somehow deserve our solidarity. Weirdest is the affection for trans people--that 0.5% of society who somehow think they deserve more rights than the rest of us. The professors also insist that all workers show solidarity with the Hamas death cult, which demands the extermination of all Jews. That's not gonna make anybody any richer. It won't even make the Palestinians richer. 

So why did most workers support Trump? That's easy. Trump is for prosperity. Prosperity means more consumption, more revenue, lower taxes, fewer regulations, and smaller government.

Me--I'm also for more prosperity, which is why I voted for Trump. Unlike the folks on the Progressive & Trotskyist Left, whose goal is to destroy civilization and redistribute the carrion to the starving masses. Just like they do in Cuba.

Further Reading:

• The General Strike Fizzles
• The End of Cuban Civilization
• Amazon, Teamsters & Contract

CUNY PSC Can't Help HEOs

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The Defense Department surely wins the contest for having the most acronyms, but a close second must be awarded to higher education. Even I--after 40 years in the business--am still encountering mysterious letter combinations. Today's set comes from a collection of essays entitled Voices From CUNY: Why We’re Voting No on the PSC’s Proposed Contract. The teaser paragraph reads

Workers from eight CUNY colleges speak out against their union’s proposed contract, which includes: inadequate raises for many job titles, workload increases and givebacks on job security for adjunct faculty, and no remote work protections for staff.

CUNY, as most of you likely know, stands for The City University of New York, a collection of 25 campuses from community colleges to graduate schools that purport to serve the citizens of that city. It is New York State's second largest system of public higher education, behind only SUNY (State University of New York), which includes 64 campuses outside the City, with similar scope. I worked for SUNY for most of my career.

Most readers are likely less familiar with PSC, denoting the Professional Staff Congress, which is the teachers' union representing professors and staff. These days that includes everybody from graduate assistants to full professors, along with many staff members. The union tries to capture dues from as many people as possible, even though their benefit in belonging to a union is negligible.

Among those staff members is an acronym I'd never encountered before: HEO. I asked Google AI for assistance.

At CUNY, an "HEO" stands for "Higher Education Officer," referring to a series of non-teaching administrative staff positions within the university, encompassing various administrative roles across different CUNY campuses; essentially, it signifies a professional working in a mid-level administrative role at the university.

I'm still not clear what this means--perhaps it's analogous to the classified services employees at SUNY, eg, secretaries and lower-level administrators. At SUNY those folks have a separate union.

None of the contributors to Voices from CUNY are HEOs, so it's left to Professor James Dennis Hoff to make their case.

The proposed contract also does nothing to secure remote work options for our HEO colleagues. This was the biggest demand for HEOs this contract round, and no progress was made on this question at all. This means that CUNY can end or limit remote work for HEOs anytime it feels like it.

Which is weird. The reason for a physical campus is ostensibly to provide students with one-on-one, in-person instruction. So allowing the HEOs to work from home seems counterproductive. I do know that the secretaries at SUNY are often the front face of the department, welcoming students and answering questions. Or perhaps Professor Hoff thinks that CUNY should move entirely on-line and dispense with in-person classes altogether? In which case everybody could work from home.

Meanwhile, the adjunct faculty are whining to high heaven. A contributor named Kamran writes,

I’m an adjunct at Lehman, and I’m poor, and I hate it. And if this contract goes through, in 2027, I will still be poor, and I will still hate it. $7K was the minimum I think we deserved — 10 years ago. In 2027, it won’t be enough. I will be enthusiastically voting no.

The $7K is payment for a three-credit-hour class, and admittedly it's slim pickings. 
Though at SUNY most adjuncts teach two classes per semester for two semesters per year (and maybe also in the summer)--which then comes to $28,000 per year. Still not much. As Tatiana Cozzarelli, an "adjunct lecturer," writes

Over the summer, I had a dream that we had gotten a contract at CUNY. ... But when I woke up, the reality was so different: I had 30 dollars in my bank account and was borrowing money from friends in order to make ends meet. I needed emergency dental surgery and I had to make a gofundme to pay for it. I’m not the only one. I know adjuncts who are on food stamps, especially over the summer. While CUNY President Felix Matos Rodriguez makes nearly $800,000 a year, adjunct professors just cannot make ends meet.

I have no idea if Mr. Rodriguez is over- or under-paid. But if you take his salary and share it among CUNY's 40,000 full- and part-time employees, the annual raise per employee is about $20. Not enough to get anybody off food stamps. Mr. Rodriguez's salary is--in budget terms--irrelevant.

Ms. Cozzarelli, who identifies as "...a former middle school teacher and current Urban Education PhD student at CUNY," needs to go find another job. Her salary reflects the value of her PhD, which is probably closer to zero. Almost anything she could do, eg, drive an Uber, would pay more and be a greater contribution to society than what she is doing now.

Professor Hoff, who is a member of the union's Delegate Assembly (an elected leadership body), contributes this:

[T]his memorandum of agreement is a pay cut, plain and simple. The proposed across the board wage increases for the life of the contract will equal only 2.82 percent per year. This comes after historic levels of inflation close to twenty percent since 2021. The proposed retroactive wages will do little to make up for that loss and probably will not even keep pace with inflation going forward. Even in the best-case scenario, this contract will actually bake in a nine percent pay cut across the board for all PSC-CUNY members. This comes on top of the lost value that our salaries have suffered since the New Caucus took power in 1999.

In other words, the union got peanuts--despite collecting union dues from Ms. Cozzarelli and her ilk. She's wasting what little money she has. But one has to wonder at the perfidy of the "New Caucus," which agreed to this contract. Why did they do that when it's obviously so bad?

I can think of a number of reasons:

1. Declining enrollments
2. Declining revenues from state and city governments
3. The necessity to keep all the adjuncts and HEOs employed, despite fewer students
4. An inability to continue deferring maintenance.

Etc. In other words, the New Caucus has to face reality. There is no plausible universe in which CUNY has enough money to make everybody happy. 

I think the contributors to Voices from CUNY are all members of what I call the Shutdown Caucus, of which Dr. Hoff is a leading spokesman. These people--who have never seen a strike they didn't like--think every workplace in America should be shut down until the bourgeoisie cough up their horde of gold coins. In particular, they think CUNY should be shut down with all 40,000 employees going unpaid while on strike. The analogy they present are the strikes at Starbucks, Amazon, the auto workers and at Boeing.

What they don't mention is that workers at Starbucks and Amazon, etc., actually do something useful--and for their labor they get paid by their customers. CUNY employees--ie, the professors, HEOs and adjuncts like Ms. Cozzarelli--don't do anything useful. They're effectively on the public dole--and if they went on strike nobody would even care.

They have no customers. Nobody voluntarily pays money to CUNY. Their entire budget is extorted through taxes on pain of imprisonment.

So please--go on strike. Save us all a dime.

Further Reading:

• Trump Won! Professor Hoff Says So
• Whiners & Complainers
• Amazon, Teamsters & Contract

 

The General Strike Fizzles

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 ‘Twas the Strike before Christmas, when all through the land,
   the workers were stirring, on strike to take a stand…

Madeleine Freeman

The optimism was palpable. Just days before Christmas workers at both Amazon and Starbucks went on strike, along with activist rumblings from students at CUNY. The working class was stirred. The game was afoot. Jeff Bezos would get his comeuppance after all. Left Voice author Madeleine Freeman expressed her high hopes in an article entitled Generation U Raises Its Head with a Roar. Her lede paragraphs (links omitted):

The working class is making history. 

In the middle of the holiday rush and massive profits for big business, Starbucks workers have just joined Amazon workers and gone on strike against one of the largest corporations in the country. Hundreds of workers are rising up against these union-busting companies who refuse to negotiate contracts that would guarantee real wage increases, job protections, and other much-need improvements to working conditions. Amazon and Starbucks workers, who have been at the forefront of a new wave of labor organizing amongst precarious sectors of workers in recent years, have had enough. 

The enthusiasm was echoed by three authors (Pola Posen, Jimena Vergara and James Dennis Hoff) in an article entitled Essential Workers at Amazon Are Rising Up for the Whole Working Class. Professor Hoff, in particular, is a leading spokesman for what I call the Shutdown Caucus--which believes that all workplaces should be shut down immediately, and stay shut down until the bourgeoisie coughs up it's (hypothetical and largely imaginary) trillions in gold coins.

He and his co-authors write:

On Thursday, December 19, Amazon drivers and warehouse workers at several distribution centers across the country began walking off the job in the middle of the holiday rush to protest low wages, awful working conditions, and the corporate giant’s ongoing refusal to recognize or to negotiate with the more than 10,000 workers who have formed local Amazon unions since 2022. ...

This strike is by far the most important labor action by the ALU since the workers at JFK8 formed their independent union in 2021. That first victory against Amazon was a shot heard ‘round the world, and these strikes show that the fighting spirit of that struggle lives on. These workers — many of whom are some of the most exploited and oppressed in the country, including people of color and immigrants often living on the edge of poverty — are facing off against one of the most powerful and ruthless corporations on the planet. 

The inaccuracies abound. First, Amazon claims a US workforce of about 1.1 million, so even at face value the number of strikers is trivial--less than 1%. And worse, Amazon doesn't count the drivers as employees, but rather as employees of contractors. The contractors collectively employ about 400,000 drivers, of which only 10,000 are Teamsters. Since the drivers do not work for Amazon (claims the company), the company disputes any necessity to negotiate with their union.

So the strike did not primarily involve the ALU (newly formed Amazon Labor Union). According to Alex Findijs, participation by the ALU in the walkout was minimus. He writes 

The Teamsters claims 5,500 members at JFK8 but did not report on how many workers had joined the picket lines. A reporting team from the WSWS last Saturday found the warehouse operating normally, with a small picket outside dominated by union officials.

(WSWS refers to the World Socialist Web Site, published by yet another Trotskyist grouplet whose history I have not followed. But the article by Mr. Findijs seems reasonably factual.) 

Speaking from my own personal experience, the packages I ordered from Amazon all arrived as scheduled. The strike was a dud.

Professor Hoff, et al, claim that "...founder, Jeff Bezos, made $48 billion off of Amazon workers in the first three months of the pandemic..." I have been unable to reproduce this figure. The closest I can come is this article from CNBC,  where author Annie Palmer, writing in 2021, reports that

The company forecast operating income of $3 billion to $6.5 billion in the fiscal first quarter, assuming the roughly $2 billion of costs related to Covid-19.

Amazon said sales in the first quarter will be between $100 billion and $106 billion, a slowdown from the fourth quarter of 2020, but an increase of between 33% and 40% from a year earlier. Analysts were expecting revenue of $95.8 billion.

"Operating income" is a proxy for profit, while net sales is the quarter's total revenue. In other words, Amazon's profit margin (before taxes) is about 5%. That means, of total revenue, 95% went to employees of Amazon, its drivers and its suppliers--in other words, to the workers. And that's the problem my friends in the Shutdown Caucus have--if the workers go on strike, they hurt themselves much more than management. They collectively lose 20x more money than the share holders.

That's why strikes usually don't work. Most often it's just the workers shooting themselves in the foot.

But let's not forget Starbucks--where approximately 500 stores were closed by strikers, out of the 10,000 company-owned stores in the US. The employees sacrificed 100% of their paychecks for the lost cause of getting a union contract from Starbucks. Starbucks, like Amazon, operates on thin margins and can't afford to pay a premium to the union. That's why the strikers will never, ever get a contract that is more generous than what Starbucks pays its non-union employees. They'll just close the stores before they do that.

Ms. Freeman puts it this way:

Starbucks has now stated publicly that it will offer a serious contract proposal before the end of the year, but workers say the company is not making good on any of their demands. Further, the company is trying to go around the union by offering concessions on its own terms to head off future organizing efforts at its other stores. One of workers’ central demands is for wage increases, but the company refuses to include immediate raises in the contract — in a slap to the face, the company offered a measly 1.5 percent wage increase for future years.

In any case it all fell apart. The "history making" working class just caved. As Mr. Findijs reports,

Thousands of Amazon and Starbucks workers returned to work this week after launching nationwide strikes. Thousands of Amazon drivers ended their week-long strike on Thursday, while an estimated 5,000 Starbucks workers ended a five-day strike on Christmas Day.

But let's not forget the silliness over at CUNY, as described by this article.

CUNY is the university of the working class of New York and that gives us organic and natural connections to workers including those at Amazon. Our solidarity with these workers is instrumental in furthering class struggle at this moment. Amazon is the largest employer in the United States, only behind Walmart which has no physical presence in New York City. This makes it all the more necessary for us CUNY students to stand in solidarity with Amazon workers as they create history in our very own city.

If the "working class" is conveniently defined as adults without a college degree, then I'll venture that none of our Left Voice authors are members of the working class. They're all at least as petty bourgeois as I am (me being a retired college professor). Their supposed solidarity with Amazon and Starbucks workers is just empty virtue-signaling.

More, I doubt any students are attending CUNY so that they can work in an Amazon warehouse. If they end up being Starbucks baristas, that won't be by choice. Instead they all aspire to professional/managerial jobs. Like their professors, they, too, want to join the petty bourgeoisie. I can't say as I blame them.

Workers don't need more "solidarity." What they need is more money, and that means more revenue from growing, thriving and successful businesses. Going on strike is hopelessly counterproductive.

Further Reading:

• Left Voice & the Election, 2024
• A Woman's Place is ...
• Labor Notes 2022: Starbucks

Oberlin, 2024

 

84 year-old Jack Barnes, leader of the Socialist Workers Party since 1972.
(Source)

“Every class struggle is a political struggle.” With that statement Jack Barnes, national secretary of the Socialist Workers PartyI [SWP - ed], opened his report to an International Socialist Educational Conference in Oberlin, Ohio. ...

Barnes was quoting an 1895 tribute by communist leader V.I. Lenin to Frederick Engels, who along with Karl Marx founded and led the modern revolutionary workers movement. In October 1917, after the horrors of more than three years of imperialist war, the Bolshevik Party, under Lenin’s leadership, led the working class and exploited peasants in Russia to the conquest of power and establishment of the first workers state in history. It was the world’s first victorious socialist revolution.

That is an excerpt from Steve Clark's long article reporting on the 2024 Oberlin Conference held June 13-15, 2024. The article is entitled Forging a proletarian party in the class struggle today.

I previously suggested that there was no Oberlin conference this year, offering to eat crow if I was proven wrong. Well, I had a large helping of finely cooked, elegantly spiced crow for breakfast this morning--in honor of the fact that I'm happy to be wrong, as detailed in my previous article. Why it took Mr. Clark more than two months to write the report, I don't know. I also don't understand why the event wasn't advertised in advance (at least not that I noticed).

I will say the lack of advertising didn't make much difference in attendance--Mr. Clark reports that 330 comrades and friends attended, including visitors from Australia, France, UK, Iceland, Greece and Norway. This is in line with attendance in previous years.

Friend and commenter John B. points out that nothing much of importance seems to have happened this year. And he's right--but this year's report has a noticeably different tone from those of prior years. Previous reports from Oberlin have led off with the topics of the day, followed by (at least in attenuated form) what the Party is gonna do in response.

That's not true this year. Mr. Clark's article is mostly about the past--beginning with that 1895 quote from Lenin. Current events are reserved to the very end, and there is almost no discussion of the Party's tasks for the coming period.

It's all very sentimental. It has a swan-song vibe to it--as if Mr. Barnes is in his final year of leadership. It's more a funeral than a new beginning.

As detailed in my last post, both capitalists and workers have a strong, common interest in maximizing a business's revenue--on that they are very much on the same side. Indeed, labor almost always gets the lion's share of revenue. The necessity to maximize revenue dwarfs the conflict over how it's divided between wages and profits. With no revenue, there won't be either. Marx never understood that.

Quoting Mr. Barnes, Mr. Clark writes,

“Workers and our allies need a party of independent working-class political action — class against class — in factories and other workplaces, in army barracks, and in the neighborhoods, towns and streets where working people live and labor.”

The Party has been demanding this since its inception in 1938. More, this is the key demand of all the "Trotskyist" offspring that this blog covers--they all want an independent working class party. Indeed, Marx and Engels made the same demand in the Communist Manifesto, published in 1848. If there ever was a consistent theme in Marxism/Leninism/Trotskyism, it's that there needs to be an independent labor party.

In the United States that has never happened. There have been labor parties in other countries--eg, Canada and the UK. And many European countries still have Social Democratic parties, which were originally founded by Marx himself (and led, in Germany, by the redoubtable Karl Kautsky). Yet all labor and social democratic parties have evolved toward "reformism," and in the modern era have faded into insignificance. In Germany recent polling gives the Social Democrats only 14% of the vote.

The reason is because Marxism is wrong. Class struggle does NOT drive human history (though it is a factor, probably minor). Revenue is more important to workers than profit. A zero-sum conflict between workers and capitalists does not exist.

If Marxism were right, then why is the SWP today still a tiny party of 330 comrades and sympathizers with an average age of about 70? They haven't grown. They haven't convinced any large number of people of the correctness of their opinions.

Mr. Clark (describing Mr. Barnes' speech) gives a long list of positions the Party has taken that he says have since proven correct. He touts the most recent political report entitled The low point of labor resistance is behind us (my review here). The major thesis of that book, published in 2022, is that the union movement has been revived and will start growing again. Recent evidence for that are successful strikes at Amazon and Starbucks, and by the UAW.

And the Party was correct (at least in a minor way). In 2022 we had a major labor shortage and all workers--union and non-union alike--were getting significant raises. Whether that caused inflation or was the result of inflation is a chicken-egg question that I won't answer--but it did happen. And it made it look as though unions were on the upswing.

But that's not true today. Today 4+ million new immigrants have joined the labor force. All the help wanted signs that decorated stores and restaurants in 2022 have disappeared. Labor participation rates are at a recent high. 

There is no labor shortage. The days of easy raises for employees is over. Indeed, white collar workers--especially in the tech industry--are taking pay cuts, often big ones. That trend may be spreading into the blue collar field as well. The Party was right in 2022. Now it's wrong.

Even if you grant that the Party was right in 2022, it was also wrong. Because many of the successful strikes were by public employee unions, eg, teachers, college professors and grad students, social welfare workers, etc. These are described in loving detail by our friends over at Left Voice, a Trotskyist grouplet made up of college professors and assorted failed academics. But public employees--however occasionally necessary their services--do not improve our standard of living. They're paid from taxes paid involuntarily mostly by working people, and not from revenue which comes from consumers voluntarily spending their money on products they want to buy. Growth in the public employee unions does not represent the revival of the labor movement.

The Party--to its great credit--has mostly championed revenue-making businesses that actually improve our lives. Their candidate for mayor of Chicago in 2023, Ilona Gersh, was a good example of this.

Among the most ludicrous of the supposedly correct positions is (italics in original),

The Socialist Workers Party said, “No!” U.S. imperialism has lost the Cold War, not won it. The fall of the Stalinist apparatuses eliminated a class-collaborationist crutch the imperialist rulers had relied on for more than six decades to undermine national and class battles the world over and block extension of the socialist revolution.

Note to Mr. Barnes and all other comrades: The US won the cold war. The Soviet state, born of the supposedly successful Russian Revolution of 1917, has disintegrated. Russia is but an empty husk of its former self, suffering demographic, economic, technological, and now military decline. Even if it somehow wins the war in Ukraine, it will be a pyrrhic victory that won't help at all.

But Mr. Clark does correctly note that world disorder is increasing. Some of that is technological: eg, the Houthis are firing thousand dollar drones at ships in the Red Sea while the US Navy is shooting them down with million dollar missiles. This is obviously unsustainable.

Or put more generally, because of the Soviet Union the US had to acquire allies around the world. It did that by bribing them with foreign aid, by granting them tariff-free access to US markets, and by militarily guaranteeing their borders from invasion. But today the Soviet Union is no longer a threat. We don't need all those allies, and countries that used to get aid from Uncle Sam (Bangladesh, Sri Lanka, Egypt, South Africa, etc.) are just shit out of luck.

We're the most self-sufficient country on Earth.

Like their Trotskyist competitors, the Party is obsessed with the word imperialism. It's an imaginary boogeyman invented by Lenin designed to bamboozle the ignorant. At bottom, it's just a giant conspiracy theory. The word fragment imperial- occurs in Mr. Clark's essay 31 times. This is just meaningless Trotsky-talk.

The Party takes the honorable position on two issues. First, it truly understands that Hamas is a murderous, fascist organization. The compare Hamas to Nazis. The comparison isn't wrong, but I think it's more precise to compare them with the Khmer Rouge. They're not motivated by ideological fascism so much as just murderous nihilism. If there's any method to Hamas's madness, I certainly don't know what it is.

Second, they understand that the egregious lawfare against Donald Trump is an attack on the basic civil liberties of all Americans. The SWP has long defended civil liberties, going all the way back to the Smith trials of the 1950s. Their defense of Trump is entirely consistent with that proud tradition. Kudos.

The final paragraph of Mr. Clark's report is this.

It’s along that historic line of march, Barnes said, that a tested proletarian party will be forged in class battles, capable of organizing and leading the great working-class majority in the United States in a mass revolutionary movement that will decide which class will rule.

Big words, that. Mr. Barnes likely expressed that same thought 52 years ago when he first became National Secretary. In the intervening decades it doesn't look like he's made any progress. Indeed, the opposite. His tiny band of aging comrades are not the next generation of fighters, and Mr. Barnes--still pretty fit for an 84 year-old--looks every bit his age.

The Good Bye has taken too long. The Socialist Workers Party needs new leaders and a new program.

Further Reading:

• Amazon, Teamsters & Contract
• SWP Announces 2024 Presidential Campaign
• Cuba Needs More Communism

Left Voice Demands 5 Things of UAW's Shawn Fain

UAW president Shawn Fain (Source)

Left Voice author James Dennis Hoff demonstrates his astonishing misunderstanding of the labor movement in an article entitled Five Things Shawn Fain and the UAW Could Do Instead of Campaigning for Harris and Walz. The author, a professor of English at City University of New York campus, seemingly has never met a workplace he didn't want to shut down, including his own employer. Had he succeeded in that misguided effort, 40,000 people would have been out of work and without paychecks for an indefinite (probably long) period.

The primary reason for his misunderstanding is Marxism, which on the subject of labor/company relations is completely wrong. In the Marxist world view, the sole goal of labor is to confiscate the capitalist's profit. Marxists see the very existence of profit as a great injustice. Of course they're wrong--capital will have to win a return no matter who owns the means of production. Profit can never be eliminated and the efforts to do so have all led to destruction. See, eg, Cuba, Venezuela, and the former Soviet Union.

But that's not the primary error we examine here. There are two ways to judge a company's success: one can measure total revenue, and/or one can measure total profit, which is some fraction of that revenue. Marxists somehow seem to forget about the revenue part. But it is revenue that is split between wages and profit, and without revenue neither the worker nor the capitalist will make any money.

For example, Walmart's net revenue for the year ending June 30th was $648 billion. The net profit was about $16.3 billion, or 2.34% of revenue. The remaining revenue went employee salaries, rents, utilities, etc. The workers can legitimately fight over Walmart's profit. If they got all of it they'd get a 2.34% raise (after which the company would promptly go bankrupt).

But the elephant in the room--the fact that Professor Hoff studiously ignores--is revenue. Increases in revenue--even small ones--will have a much larger effect on workers' well-being than chipping away at the profit margin. After all, the workers get the lion's share of that revenue.

So the workers and their bosses have one big task in common--maximizing revenue. This is very complicated problem, for it depends on the mix of products sold (keeping the optimal mix of products in stock), then pricing them at a level that optimizes revenue, and finally ensuring that the products are displayed attractively and can be purchased by consumers with minimal inconvenience. A given Walmart Super Center will carry approximately 120,000 stock-keeping units, each of which has to carried in proper quantity and priced optimally.

Both workers and capitalists have a strong interest in maximizing revenue. The capitalists certainly understand that--their profit is a fraction of total revenue. And workers understand that--the security of their employment along with the size of their wages ultimately depends on revenue. The union understands it most of all--the dollar value of union dues collected will depend only on revenue.

Which is why workers are not particularly interested in going on strike. Strikes do not enhance revenue. They hurt the company and union alike. Note that the recent UAW strike was structured in a way that minimized revenue losses.

But Marxists don't get it at all. They think it's all about quibbling over profit. Profit is a sideshow for the workers--it's the revenue that really counts. When it comes to revenue, the workers, the company and the union are all on the same side. Consumers are on the opposite side.

In that light, let's now consider Professor Hoff's five demands on Shawn Fain's union.

1: Build the Fight Against the Far Right

"It is a fool’s errand to believe that we can defeat the nationalist, misogynist, xenophobic, racist, and anti-queer politics of the Far Right by voting," says Professor Hoff. He is correct; it's likely that the "far right" is gonna win the election. Win or lose, any party that can get 70 million+ votes in an election can't really be called "far" or "extremist." They are, in fact, rather mainstream.

Then I'm not sure why you'd want to defeat the "far right." UAW workers manufacture a lot of pickup trucks. Who buys them? Does Professor Hoff own a pickup truck? Almost certainly not because he lives in New York City. The consumers who buy pickup trucks live in suburbs, exurbs and small-towns across America. They live in Trump Country. Indeed, I'll bet a lot more Trump voters own pickup trucks than voters in blue states. Why should the UAW leader purposely diss the majority of his customers? Picking a fight with Trump's voters is definitely not a way to maximize revenue. 

When it comes to maximizing revenue, staying out of politics altogether seems like the best bet.

2: Take the Struggle for a Free Palestine into the Workplaces

Surely you're joking, Professor Hoff? How can slaughtering the world's Jewry increase revenue? Even if you think Hamas doesn't intend to kill everybody, I still don't see how siding with a bunch of murderous, nihilist thugs helps make American workers richer. Siding with Israel also probably won't help any. So just stay out of it, which seems to be what Shawn Fain is doing as best he can. He's right.

3: Take Seriously the Fight for a 32-Hour Work Week and Other Progressive Demands 

You can take it as seriously as you want, but please remember that the company is already maximizing revenue. A 32 hour work week (with 40 hours pay) is a nice idea, but it's not something that's affordable on a 3% profit margin. Prices would have to go up--by a lot. Such a rise in prices will lower revenue, not raise it. The workers (and the company and consumers) will ultimately come out losers. This is a demand--from the textbook on Free Lunch Economics--that only an English PhD ignoramus could love.

4: Bring Back the Political Strike and Dismantle Taft-Hartley

As said, Professor Hoff has never seen a workplace he didn't want to shut down. And they should shut down for totally frivolous reasons. Eg,

But why shouldn’t nurses and teachers, for instance, be able to go on strike to support their brothers and sisters who drive the buses and trains, and why shouldn’t working people be able to strike collectively to demand basic human rights like access to healthcare, higher education, child care, and pensions?

Most teachers (and most nurses through Medicare & Medicaid) are public employees and get paid at the expense of other workers. It's workers, after all, who pay the majority of taxes that covers their salaries. As the professor admits, a solidarity strike by teachers serves only to stuff teachers' own pockets, especially his demand for more higher education funding. We have way more higher education in this country than we need, and I don't see why the average UAW member should be forced to pay for it. They each already pay thousands of dollars in taxes to support the professors' unions.

5. Break from the Two Parties of Capital and Build a Class Independent Union Movement

Spitting into the wind, Professor Hoff writes,

But more than anything else, the first and most important step that the UAW and every union in the country could take right now to strengthen its membership and prepare for the struggles ahead is to finally break with the two parties of capital once and for all.

Our Trotskyist friends and their predecessors have been demanding this ever since the publication of the Communist Manifesto in 1846. In America it's never happened, and that's because the Marxist model of capitalists and workers permanently locked in a zero-sum fight for profits is just plain wrong.  Workers know that. Workers (real ones--not fake ones like professors) understand that it's revenue that butters their bread, and they're not gonna do anything to stop the flow.

That's why Left Voice only numbers about 50 comrades, and not 50 million.

Further Reading:

• The UAW Strike
  
• The Professors' Congress: The International Situation
  
• Unions and Work From Home
  

Amazon, Teamsters & Contract

Left Voice journalist and comrade Luigi Morris spent a season last year working in a UPS sorting facility. He did not enjoy the experience, writing,

I get up for work at 3 am, with intense back pain from working this job, and deeply exhausted from working at UPS and various additional gigs to make ends meet. With this contract, there is no substantive change in my life. It doesn’t feel historic. I get better pay, but not enough to make ends meet. I get two more sick days, which as I reflect on the pain in my back, I know isn’t enough. I can only imagine what it feels like for single parents who not only need to struggle to make ends meet for themselves, but also for their children. I think about the parents who can’t even pick up their kids due to back aches and who cannot take days off to care for kids when they get sick.

Which gives him some street cred for this week's article about the new Amazon Labor Union (ALU) and its impending merger with the Teamsters. The article is entitled Amazon Labor Union Affiliates With Teamsters: What Does This Mean for Amazon Workers and the Labor Movement? (with co-author Pola Posen).

Mr. Morris' reaction to warehouse work is not necessarily representative. Indeed.com posts reviews from people who work at Amazon, and they're all over the map: some rate the experience excellent (5), others horrible (1), and most others in between. Among the most positive reviews (as an antidote to Mr. Morris' bad experience) reads

Working at Amazon as a warehouse worker has been a fantastic experience for me. The pay is competitive, and the benefits package is comprehensive, including health insurance and stock options. The management is supportive and encourages career growth through training and advancement opportunities. The work environment is dynamic yet well-organized, ensuring efficient operations while maintaining a positive atmosphere. Overall, I am grateful for the opportunity to work at Amazon and would highly recommend it to anyone seeking a rewarding job with a reputable company.

Indeed.com reports that salaries for NYC Amazon warehouse workers are around $17/hr. It's obviously not for everybody.

Mr. Morris clearly knows a lot about unions. The  Amazon warehouse on Staten Island, NY, JFK8, was successfully unionized in 2022, due in large part to the efforts of Chris Smalls. For more I'll refer the reader to the excellent journalism of Left Voice authors Tatania Cozzarelli and James Dennis Hoff. My comments on their report are here.

Since the union vote, no contract has been signed with the company. To help speed the process along Mr. Smalls is resigning from any leadership role in the ALU, and has arranged (in Mr. Morris' opinion with some subterfuge) for the union to affiliate with the Teamsters--to be designated ALU-IBT Local 1. The idea is that negotiating a contract requires more and different experience than Mr. Smalls can offer--he being a charismatic and successful organizer, but not especially interested in the weeds of a contract negotiation. Presumably the Teamsters are better at negotiating.

I think it's going to be very difficult for any contract to be signed--especially now.

Mr. Morris--as is typical of Left Voice journalists--may know a lot about unions, but he knows nothing about economics. Even worse, he apparently never reads the business pages. For he surely should know (as I document here) that Amazon is actually three, largely independent businesses. By far the most profitable is Amazon Web Services (AWS), which competes in the cloud-computing space with Microsoft Azure and Google Cloud. By contrast, the Amazon Retail business is just barely profitable, and in 2021 was actually losing money. (The third business is Amazon Prime, which competes with Netflix, et al.)

Amazon retail goes head to head against Walmart, Aldi, Target and Dollar General, among many others. All of these businesses run on very thin margins--Walmart's margin is typically 3%, and we can assume that Amazon Retail's margin isn't any more than that. That means that if Amazon sacrificed its entire profit margin, the workers would get a 3% raise (after which the company would immediately go bankrupt).

3% hardly justifies Mr. Morris' descriptions as "hyper exploitation" and "unchecked exploitation." As a Marxist, Mr. Morris should understand this--Marxists keep yammering about the "declining rate of profit." In general this isn't true, but for commodities it is true--and Amazon and its competitors are very much in a commodity business. Profit margins are reduced to a minimum.

So there's not very much to negotiate for. If Amazon is forced to raise wages, then it will have to shrink the workforce and raise productivity. If Amazon raises prices it will lose market share and earn even less revenue. More, Amazon can't raise wages at JFK8 beyond what they pay at their other warehouses--that would be grossly unfair. There is no way Amazon can give workers any significant wage increase. (I mean in real terms. If inflation goes up then Amazon can raise wages with inflation--since prices and everything else will be going up simultaneously. But that doesn't increase anybody's standard of living.)

It gets worse. The Teamsters need to collect union dues. I'm not saying that's their only goal, but it certainly is essential to their business model. If union dues are 1% of a worker's paycheck, then a 1% raise will simply cover the dues. Given that there's only a 3% margin, letting the union get a third of that is probably a non-starter.

The only way this kind of works is if there is continued inflation. If inflation goes up 2.5%, then the union can negotiate a 2.5% wage increase. Of course this is phony, but they'll take credit for it anyway. And remember that the union is now gonna get its 1% cut, so in real terms the workers will be left worse off.

And it gets even worse than that! Even Mr. Morris should be aware that last Thursday and Friday the Dow Jones went down about 1200 points--3%. The reason is taken to be the weak labor report, showing only 114,000 new jobs were created in July, with unemployment edging up to 4.3%. This is commonly believed to auger the beginning of a recession. (Markets are not always right with their predictions.) Recessions are a terrible time to be asking for raises--indeed, Amazon is more likely to be laying people off.

Unionization efforts work best when there is a labor shortage, such as existed from 2021 into 2023, caused by the pandemic-inspired early retirement of about 4 million baby boomers. Those retirees have since been replaced by 8 million new immigrants--there is no longer a labor shortage, but possibly even a labor surplus. Unions do not do well in such an environment, and ALU-IBT Local 1 will be no exception.

I predict that no contract will be signed in the foreseeable future.

Further Reading:

• Unions and Work From Home
• Professor Wants to Shut Down CUNY
• Book Review: The Everything Store
  

SWP Announces 2024 Presidential Campaign

Left, Rachele Fruit, SWP candidate for president. Right, Margaret Trowe, SWP candidate for vice president.
(Figure & Caption Source)

The Socialist Workers Party (SWP) has announced their candidates for US President in 2024. The big reveal happened at a forum in Union City, NJ, and is described in two articles in this week's Militant here and here.

I have several immediate reactions:

• I'm glad they're running candidates. Despite the fact that their program is incoherent and I'm never gonna vote for them, I'm sentimentally attached to the effort. I put too much work into the Linda Jenness/Andrew Pulley campaign in 1972, and especially into the Peter Camejo/Willie Mae Reid campaign in 1976, for me not to care. I'm proud to say that Willie Mae was a good friend of mine back in the day. So Godspeed (or Lenin-speed) to the new candidates.
• Despite my not voting for them, I support them on several specific issues. First, they recognize Hamas for what it really is--namely a fascist thug gang that wants to murder all Jews. Unlike our other Trotskyist friends, the SWP understands that Hamas isn't even pro-Palestinian--all they are is pro-fascism and pro-murder.
  Second, they understand that Trump's legal problems are not because he's such a great criminal, but rather it's an attack on the civil liberties of all Americans. Indeed, they explain that better than I can. My response is to vote for Trump (which is what I intend to do), but I'm happy to have the support from my old friends in the SWP.
• There is nothing in either article about getting on the ballot anywhere, though they are working to get Joanne Kuniansky on the ballot for the New Jersey Senate seat.

OK--enough of a tease: the lucky candidates are Rachele Fruit for president, and Margaret Trowe for vice-president. I'm ashamed to admit that I don't know either of them personally, despite the fact that we were comrades back in the day. Ms. Fruit apparently joined the Party back in 1970, which makes her roughly my age. As best as I can tell from her biography, she's a native of Philadelphia.

She has run for public office many times in the past. Indeed, she's currently running for the US Senate seat in Florida, open due to Rick Scott becoming governor. There is no explanation about who is going to take her place in that campaign. This seems unserious.

She ran for a Detroit Common Council seat in 1973, for governor of Georgia in 2018, and for governor of Florida in 2022. Most people will find it odd that one person runs for various offices in three states, but of course that's what SWP candidates do--they make no effort to go native and be from someplace specific.

We can infer that Ms. Trowe will turn 76 this year. It seems she grew up in Oakland, and she currently lives in the East Bay. From 1997-98 she worked as a meatpacker in Marshalltown, Iowa. If she's a typical comrade she has been posted in many places across the country. Her only run for public office was for vice-president in 2000, playing second fiddle in James Harris' campaign.

Both of our candidates are proud union members, and see that as a key selling point for their candidacy.

Fruit is a hotel worker and a member of UNITE HERE Local 355. Before that, she has been an active member of the American Postal Workers Union, the Amalgamated Clothing and Textile Workers Union, the International Association of Machinists and the United Food and Commercial Workers union.

Ms. Trowe reports the following list:

Margaret Trowe is a unionist who has worked in the shipbuilding, garment, chemical and food production industries. Currently a member of Bakery, Confectionery, Tobacco Workers and Grain Millers Local 125, Trowe is on a leave from her job as a production worker at the Ghirardelli chocolate factory in San Leandro, California, to campaign for vice president.

Apparently comrades change unions as often as the move across states, and only slightly less often than they change their clothes.

Which is sad. Ms. Fruit--who is at least 70--is still working in a hotel. Is she a maid? Had she stuck with just one of those union jobs for--let's say--30 years, she'd be collecting some kind of pension by now. Or at least she'd have a 401K. But as it is, she has to keep working into her 70s.

Ms. Trowe is just as poorly off--still working as a production worker on the chocolate line.

The Party did their comrades a grave disservice by moving them around so much--and for what looks like zero political gain. How do you earn trust or gain a reputation if you never live in a place for more than a few years? 

The list of unions our candidates were/are members of is praiseworthy. Apart from the Postal Workers, all of them are private sector unions. Put another way, they provided real goods and services for consumers who voluntarily paid for what was produced. Mss. Fruit & Trowe are actual, productive members of the working class. No mooching off the taxpayers for these two ladies, which puts them streets ahead of other Trotskyist grouplets who champion the causes of public sector workers (eg, Jeff Mackler--long time member of the teachers' union). By contrast, our friends over at Left Voice are grad students and college professors, clamoring for ever more generous welfare salaries for public college employees, at tax-payers expense.

It's weird that the campaign never mentions two unions that have been much in the news recently: Starbucks Workers United and the Amazon Labor Union. These are serious--if not entirely successful--efforts to unionize workers who are hard to reach. I understand the SWP doesn't want to be in the same bed as the petty bourgeois fakers over at Left Voice, but in this case there is a confluence of interest and the Party is remiss in not getting on board.

Ms. Fruit summarized the campaign's program here:

“The capitalists’ profits come from exploiting wage labor. The wealthy minority holds state power by dividing the working majority,” Fruit said. “The SWP joins the fight for unity in the working class, for building and strengthening the trade union movement and labor solidarity, for opposing Washington’s wars, for a government-funded public-works program to provide jobs and put an end to divisions between employed and unemployed, and for demanding amnesty for immigrants living and working in the United States.”

My response in bullet points:

• The first sentence is just wrong. In a competitive free market (such as mostly exists in the USA), it is impossible for anybody to be oppressed in the Marxist sense. The second sentence is a gross exaggeration--the "wealthy minority" of whom she speaks is only 0.1% of the population, and despite their economic wherewithal, they're nowhere near numerous enough to "divide the working majority."
• Regards "Washington's wars," the Party seems to be supporting US foreign policy more than opposing it. They support the US arming Ukraine, and they back the US policy regards Hamas (though they appear to have more backbone than Mr. Biden). 
• About immigration, I point out here that the Party's position is somewhat more nuanced than what is said in the above quote.

Margaret Trowe said nothing but the truth, here:

“The Socialist Workers candidates urge workers to organize and act to prevent the Democratic Party’s assault on freedoms protected by the U.S. Constitution,” Trowe said. “The Democrats’ witch hunt against Republican presidential candidate Donald Trump — the attempt to throw him off the ballot, ruin his family and send him to prison — is a blow to political rights workers sorely need. Whoever is targeted today, it is working people who will be targeted tomorrow.”

Enough said. Vote for Trump!

Further Reading:

• Oppression!
• Three Militant Articles on the Economy
• The SWP's 2020 Campaign Platform

The UAW Strike

United Auto Workers Local 551 members rally at Chicago union hall Oct. 7. Watched by millions, UAW strikers fought to win back concessions given to Big Three bosses in 2007.
(Figure & Caption Source; MILITANT/SALM KOLIS)

James Dennis Hoff, CUNY English professor and prominent contributor to Left Voice, writes an extended think piece entitled The UAW Won Big: What Does It Mean for the U.S. Labor Movement?. (It's dated Nov. 12th, before the proposed contract was ratified.) He nicely summarizes the outcome (links in original).

Though UAW members are still debating and voting on the tentative agreements, and though they did not win everything they aimed to (in fact, as the recent no vote at the Flint Michigan plant shows, they probably could have won more if the rank and file had been in the lead), this is nonetheless a victory for the auto workers. The gains in these proposed contracts are substantial, and represent a significant restoration of the concessions on wages and benefits made to the Big Three over the last 15 years. Not only did the union manage to secure wage increases of 25 percent across the life of the contract, with 11 percent in the first year and a $5,000 signing bonus; they also took significant steps toward the elimination of wage tiers at all three automakers and managed to win back cost of living adjustments that will protect those wages against inflation going forward.

Professor Hoff is correct--the outcome is a victory for the union. The 25% pay raise is over the 4½ year life of the contract. Adding in the cost-of-living adjustments, this is probably close to the 40% that the union was originally asking for. In addition, "...the union was able to use the strike to force all three auto companies to make big investments in new manufacturing and to secure pathways toward unionizing electric vehicle (EV) and battery plants that will help protect jobs and wages as the industry transitions to EV production."

So what could go wrong? First, the contract assumes continuing inflation, absent which the companies will not be able to raise prices sufficiently to pay the new labor costs. But that doesn't seem to be panning out. While services (eg, airline fares, restaurant meals) costs are continuing to climb, goods costs are now shrinking, specifically "... appliances, furniture, used cars and other goods" are getting cheaper. Walmart reports deflation on many items in its stores:

Deflation in some items is creating a new dynamic for Walmart, [CEO Doug] McMillon said. In general merchandise, the category that includes electronics, toys and other nonfood items, prices have dropped by about 5% compared with a year ago, he said.

What happens if new car prices start going down? Are the workers gonna take a pay cut, ie, the opposite of COLA? Of course not--it will all come out of the margin. The companies will be forced to cut costs, lay off employees, and at least temporarily close factories.

Second, there is the problem of electric vehicles (EVs). While the sales of EVs are still increasing, the rate of increase is far below what was anticipated. Accordingly, "General Motors will be slowing its electric car (EV) production in North America due to lower-than-forecast demand, pushing its manufacturing targets well into 2025. The decision saves the company $1.5 billion next year..." 

I think the problem with EVs is that they simply don't work. The technology is not ready for prime time. And as Trump has pointed out, most EV production will take place in China. The big cost for EVs is not in the assembly, but rather in mining the myriad raw materials (lithium, copper, nickel, rare-earth metals, etc.) China has a huge head start on that and can do that much cheaper than we can. The promises made to the union about future EV production will not happen.

The reason for the union's victory was not primarily because of militancy, but more because of an endemic labor shortage, especially for the skilled trades. Professor Hoff doesn't realize that--he somehow thinks the unionists will get paid above the market rate. I doubt that's true, and if that is true then union members will gradually be laid off and assembly plants will move to non-union states or to Mexico.

Professor Hoff has, for a Marxist, a very strange suggestion for the union. The union would be much better served if they (emphasis mine)

...insist that strikes like these be led from below by strike committees in each workplace, where decisions about where and when and how to strike are openly debated and discussed and that the negotiations be public and open to all members throughout the bargaining process.

Leaders, in his view, should do no more than organize meetings and make sure everything is transparent and open. Negotiating in good faith (which means keeping some things confidential) should not be allowed. In a word, the union should be governed by the mob--not by any elected, competent and accountable leadership.

Anarchists champion from below organizations, and they're spectacularly unsuccessful. Leninists reject that approach, advocating instead guidance from a vanguard Party with the expertise and experience necessary to lead the working class to victory. Professor Hoff weirdly sides with the anarchists here, rejecting his self-proclaimed Leninism.

The Militant posts a recent article (by Terry Evans) entitled UAW members debate, vote up contract, more fights to come. The piece makes many of the same points as Professor Hoff, albeit with a different emphasis. Mr. Evans' summary post-mortem includes this,

The fight was watched closely by millions of workers who also face falling real wages and worsening conditions from past concessions to the bosses and today’s deepening capitalist crisis.

There is no question workers won some important gains. And most came away feeling the union was stronger, better prepared to fight.

The Militant's main quibble with the outcome of the strike concerned pensions (an issue mentioned only in passing by Professor Hoff). After noting that workers hired before 2007 will still receive defined benefit pensions (albeit with only a 9.8% raise in monthly benefits), others face a supposedly bleaker future.

The situation facing workers who got jobs after 2007 is far worse. “We don’t have pensions or health care when we retire,” Randolph said. These workers get an inferior 401(k) plan, as do all new hires. “Pensions and post-retirement health care were a huge topic,” newly elected President Katie Deatherage of Local 2250 at GM’s plant in Wentzville, Missouri, told the press. She said 70% to 75% of workers there were hired after 2007. Workers voted the contract down.

It's not at all certain that the 401(k) plan is inferior--it depends on how carefully and successfully it is invested. The problem with defined benefit packages is they have an unfortunate tendency to go bankrupt--that's because both union officials and company execs are happy to promise hopelessly unrealistic benefits, knowing that the bills won't come due for decades, long after they've left office. The 401(k) may seem chintzy by comparison, but they are far less risky, and workers are much less likely to lose everything.

One last point: all my Trotskyist friends are mad at the billionaires and millionaires, with Professor Hoff commenting favorably on UAW chief Shawn Fain's sentiment:

Through a regular and concerted denouncement of the super rich, including the CEOs and executives of the Big Three, Fain and the UAW were able to call attention to the ways in which the assaults on the living standards and well being of auto workers were part of a larger assault on working people everywhere ...

Of course it's all wrong--the so-called billionaires take nothing away from either Mr. Fain or Professor Hoff. Without billionaires there would be no millionaires, and without millionaires there wouldn't be anybody who could afford a $60,000 F-150 pickup truck. Without billionaires the UAW would be out of business altogether.

My Trotskyist friends don't even like Mary Barra, CEO of GM. According to this site she earned $34.1 million in 2022. That sounds like a lot of money! OK--it is a lot of money! But divvy it up among GM's 167,000 employees it comes to $201 per employee. So that's a nice Christmas bonus, but frankly, in the grand scheme of things, it's small change.

The UAW strike was successful mainly because of the on-going labor shortage, especially of skilled workers. It's possible the union has priced themselves too high (if inflation doesn't materialize), in which case UAW membership will shrink below it's already record low enrollment.

Further Reading:

• The Professors' Congress: The International Situation
• Unions and Work From Home
• Professor Wants to Shut Down CUNY

Three Militant Articles on the Economy

While energy prices have gone down, most items working people depend on are still rising today.
(Source: Bureau of Labor Statistics; Caption: The Militant)

All three articles are from the August 7th issue of The Militant (published by the Socialist Workers Party, SWP). and two of them are only indirectly about the economy. The first piece is entitled Why do liberals claim that US capitalism is on the upswing?  and is authored by The Militant's economics correspondent, Brian Williams. The second, by Seth Galinsky, is headlined Teamsters union says tentative agreement reached with UPS. Finally, there is an editorial under the banner Cuba’s socialist revolution points way forward for working people.

Mr. Williams gets it mostly right--but tells only one side of the story. He agrees with Republican partisans that the economy is going to hell in a handbasket, with this lede (links mine)

If you go by what the liberal big-business media are saying, the economy is on the verge of a boom, with prices dropping and fears of a wrenching recession fading away. Among a plethora of articles pushing this view include: “Everything’s coming up soft landing,” by New York Times economic whiz Paul Krugman, and “US economy shifts into disinflation mode,” by Reuters.

Not true, claims Mr. Williams, and he cites the above chart as evidence, saying 

But this doesn’t mean that prices of goods essential for working people don’t continue to bite us. Rents rose by 8.3% over the past year. Prices for grocery items workers need kept going up — cereals, up 16%; jelly and jam, up 17.5%; mayonnaise, 23%; applesauce, 22%, for example.

Some of the steepest rises were for the cost of insuring a vehicle, up 17% in June. And the cost of keeping your car running rose 12.7% from a year earlier.

He's right in holding Mr. Krugman to account, who claims that fuel, food and rent can be ignored in any meaningful measure of inflation.

There are plenty of voices in the media who, like Mr. Williams, argue that we're heading for a recession. Indeed, the whole Republican party makes that claim, for obvious electoral reasons. The popular website Zerohedge.com makes that case in spades. And they might be right.

On the other hand, it may be no recession is on the near horizon. A popular meme today is, instead of a "soft-landing", there will be "no-landing", that is the economy will continue to grow at a rate proportional to population growth and new technology, i.e., 1 - 2%. But the cost will be continued inflation at or above 3%. My opinion (today; I change my mind every week or so) is this is the most likely outcome, though I'll hazard inflation will be more like 5%.

Mr. Williams makes a huge error, for which we can fault Marxism to which he is beholden. He writes,

Bosses and government spokespeople claim that the biggest problem with inflation is it impels workers to fight for higher wages, leading to what they claim is a “wage-price spiral.” This just isn’t true. When workers organize and use unions to fight and win higher wages, it just means profits go down. Profits are what the bosses steal from the fruits of our labor.

Marxism claims that capital should cost nothing. This will never be true, no matter who owns it. The statement that higher wages always come out of profits is also usually wrong. Most often higher wages result in higher prices, just as the "bosses" claim.

He goes on to say that "...workers’ real wages are currently 3.2% lower than in December 2020." Perhaps this is true--there are uncertainties in measurement that make it debatable. But more important, there have been pandemic-driven changes in the economy that confound any simple comparison. For example, consumer preferences have changed from goods (which manufacture pays relatively high wages) to services (which pay relatively low wages). This will result in lower overall wages, but not because of inflation.

More, Mr. Galinsky, writing about the UPS settlement with the Teamsters Union, writes

According to the Teamsters’ press release, all current full- and part-time UPS workers will get a $7.50 per hour wage increase over the life of the contract, starting with $2.75 more this year. That comes to about an average of 6.5% a year.

Six and one half percent is well over the rate of inflation. Unions do best when there is a labor shortage, forcing all companies to pay more for labor, whether they're unionized or not. Walmart, Amazon and Starbucks have all raised their wages recently. No union is required to get a hefty raise.

I think The Militant fundamentally misunderstands the union movement. Unionists are not revolutionaries in the making. They're certainly not communists. Any union member will understand that a company has to make a profit in order to stay in business (see, e.g., here). The last thing they want is for the company to go bankrupt, as is happening with Yellow Freight, putting nearly 30,000 teamsters out of a job. At their core, unions are pro-company and pro-capitalist. They resent organizations like the SWP, who see unions merely as a tool to help the vanguard party take state power. See, e.g., the Labor Notes movement.

Finally, the editors reprint an excerpt from Castro's speech titled History will absolve me. This speech was delivered in 1953,  It is an agenda for the "revolution," which at that point was still in the future. It is entirely appropriate to compare Castro's promises with the outcome today. What follows are some quotes (taken from the excerpt of the speech published by the editors), with my comments in red (which are so obvious they're hardly necessary).

• When we talk about the people, in terms of struggle, we mean the 600,000 Cubans without work, who want to earn their daily bread honestly without having to emigrate from their homeland in search of a job. Since the "revolution" millions of people have fled the island in search of jobs and a better life, with more arriving in the US every day. 1.2 million Cuban-Americans live in Miami alone.
• The 500,000 farmworkers who live in miserable huts, who work four months of the year and starve the rest, sharing their poverty with their children; who don’t have an inch of land to till and whose lives would move any heart not made of stone. Nothing has changed here. Farmworkers still live in miserable huts, still don't own any land, and still lack enough food to live well on.
• The 400,000 industrial workers and laborers whose retirement funds have been embezzled; whose gains won in the past are being taken away; whose homes are hellish shacks that resemble the worst barracks; whose wages pass from the hands of the boss to those of the moneylender; whose future is a cut in pay and loss of a job; whose life is endless toil; whose only rest is the grave. Today industrial workers and laborers have no retirement funds, and their salaries are less than $100/month. A UPS employee earns that much in under five hours.
• The 20,000 small merchants, crushed by debt, ruined by the crisis, and dealt the final blow by a plague of thieving, venal officials. Today small merchants are crushed by even more venal officials, and are not allowed to run even the smallest businesses without bureaucratic oversight and corruption.
• The 10,000 young professionals: doctors, engineers, lawyers, veterinarians, school teachers, dentists, pharmacists, journalists, painters, sculptors, and others who leave school with a degree, looking for a way to fight, full of hope, only to find themselves at a dead end with all doors closed and deaf to their pleas and outrage. With all doors closed to them in Cuba, these are the people who have fled to Miami and have turned that city into the financial and cultural capital of Latin America.

Not only will history not absolve him, it will condemn him! It is obvious that by the standards of its own promises, the "revolution" has been an abject failure. The SWP and The Militant are strong supporters of the Cuban, so-called "revolution. By reprinting this, The Militant's editors show just how clueless they really are. This is just face-plant stupid.

Further Reading:

• Unions and Work From Home
• Professor Wants to Shut Down CUNY
• Lost in the Amazon