Union Restructuring and Rate of Strikes in U.S.

[ryan kowala]

Hi all, I saw this labor article the other day which critiques the idea falling rates of strikes in the U.S. is caused by the falling rate of profit. Instead, the author says the decline of union activity was caused by the government controlling labor with new laws and legal institutions such as the National Labor Relations Board. For those unfamiliar with labor in the U.S., the government restructured the labor movement in the 1930s with the primary aim to take class struggle off the shop floor into compromized legal avenues. Most notably, through this restructuring we see the emergence of the no-strike clause as the epitome of the U.S. labor movement’s subordination to capital. Here is the article:
https://organizing.work/2022/01/strikes-do-not-rise-and-fall-with-the-rate-of-profit/

I was wondering if anyone had thoughts on the decline of labor union and decline of strikes from the perspective of CasP. Specifically, is it related to differential accumulation in the U.S.?  I saw some discussion in the article “Can Capitalists Afford Recovery” (Figure 14)
although, the data doesn’t go back prior to the 1930s when all this restructuring happened. Thoughts?

Topic

[Michael Alexander]

Here is my take on the issue for what it is worth. In my book (linked below) I use strike frequency (S) and top marginal income tax rate (T) to characterize the “business/economic environment” in which business culture evolves in the US. I characterize the latter as being a mix of two types: stakeholder capitalism (SC) and shareholder primacy (SP). Economic inequality, measured as top 1% income share, is used as a proxy for business culture with higher inequality indicating higher prevalence of SP culture.  I fit a cultural evolution model to inequality data with and obtained an excellent fit (r-square = 0.86) with this 4-parameter model, where X is business culture (top 1% income share):

dX/dt = 0.92 X – 0.08 (23.7 – 0.07 T – 0.12S)

A plot of the fit is given in Figure 3.5.

https://mikebert.neocities.org/America-in-crisis.pdf

I see a correlation between the rate of change in S and which party occupies the White House which is given in Table 3.1. Based on this correlation I then replaced S with a binary variable indicating which party held the White House. I found I could obtain an equally good take if I assumed that Democrats acted as Republicans after 1968. That is, a Democratic administration exerted a pro-Labor effect, boosting S, between 1912 and 1968, but not afterward.

Without a pro-Labor Democratic party, S would he expected to decline regardless of which party was in power. I describe in chapter 4 how fiscal policy choices made by the Kennedy and Johnson administrations led to 1970’s stagflation during which public support for labor dried up. After this time, a pro-Labor stance offered little political gain for new Democratic candidates. Chapter 5 describes how political culture evolved in such a way to diminish Democratic support for continuing the informal alliance with Labor that had been in place since the Wilson administration.

[Michael Alexander]

I perused the article about how strikes do not rise and fall with the rate of profit. That seems right to me. Increased strike frequency (S) would likely be associated with lower rate of profit, as I would think rate of profit to be correlated with capitalist power and so inversely with labor power (which I proxy with S).

The key factor I see is capitalist culture. SC capitalists see the objective of business as acquiring prestige within the SC paradigm by achieving “business greatness” as measured mostly be “real” measures like sales, market penetration/domination, new product development, or sheer size as measured by number of employees and number of facilities (relative to one’s industry).  In CasP terms, SC capitalists use measures of prestige that reflect industry. SC capitalists see employees, plant, equipment, and other kinds of “real” capital, customers, and operating locations as assets needed to achieve business greatness”.  Seeing employees as assets the SC capitalist will bargain with labor and not actively try to destroy them.

SP capitalists see the objective of business as acquiring prestige within the SP paradigm by maximizing shareholder value (market capitalization). This is mostly easily achieved by investing surplus profits in stock buybacks to boost share prices. In CasP terms, SP capitalists use measures of prestige that reflect business, which are all financial. SP capitalists see employees, “real” capital, customers, and operating locations as liabilities to be minimized. A hostile view towards workers/Labor, and the development of the concept of “platform companies” are examples of the first two.  The rise of automated help lines and bidding wars between cities for siting of company facilities are examples of the latter two.

[Blair Fix]

Strike density is inversely correlated with Nitzan and Bichler’s power index — the ratio of stock prices to wages. In other words, stocks tend be higher relative to wages when strike density is low.

Here’s my analysis: https://economicsfromthetopdown.com/2020/10/05/how-the-history-of-class-struggle-is-written-on-the-stock-market/

[Author]

Replies