US: Inequality and fight-back in the world’s richest country

Socialist Alternative articulates political strategy to break from Democratic Party and capitalism

A wave of strikes by fast food workers and the election of Kshama Sawant to Seattle city council are indicators of the change taking place in the US. Kshama is a leading member of the rapidly growing Socialist Alternative, linked to the Committee for a Workers’ International (CWI), Peter Taaffe, general secretary of the Socialist Party, reports on his recent visit.

“How the hell did Seattle elect a socialist? We used to be so nice.” This was the comment of the Seattle Weekly under a banner headline “Revolution Road”.

The stunning election victory of Kshama Sawant, Seattle’s first explicitly socialist councillor in 100 years, has generated this and a barrage of similarly bemused comments from capitalist spokespersons in the US and elsewhere.

And yet rocket science is not needed to explain Kshama’s victory, which in turn led to the magnificent ‘15 Now’ campaign in Seattle and the enactment of the highest minimum wage in the US.

The infectious enthusiasm which this has generated amongst workers, particularly amongst young people, was on full display at the recent tremendous National Convention of Socialist Alternative, attended by a record number of delegates, observers and friends from all corners of the US. There were intense discussions on world perspectives, on the issue of further electoral challenges from the left to the two main parties in the US, as well as the very favourable situation for Socialist Alternative and socialist ideas to grow in the US. This was reflected in the huge $43,000 collection.

A doubling of membership already this year – with further substantial increases on the horizon – was also a theme of the Convention.

No longer ‘nice’ American capitalism

American capitalism is no longer ‘nice’ – if ever it was – for the millions of its working-class victims plunged into poverty by the failures of this system. Even in Seattle, in many respects a stunningly beautiful city, this is visible with the homeless camped out downtown around City Hall.

The Seattle Weekly, through gritted teeth, concedes that it is the worsening in the conditions of working people that has provided the platform for Kshama’s victory: “There are… an estimated 102,000 workers making less than $15 an hour in Seattle. We have the seventh highest cost of living in the nation. A one-bedroom apartment costs roughly $1,300 a month in the city. A minimum wage increase will provide but a temporary Band-Aid. … The white working-class is getting younger, more liberal, and more open to progressive agendas. Some 20 percent of Seattle’s population is aged 20 to 29.” [19 August 2014]

Big business and its spokespeople, including in the Democratic Party, have been terrified by the ‘contagious effect’ of Kshama’s campaign and are determined to stamp out ‘this socialist experiment’. Already the Seattle Weekly, along with others, is subtly promoting a prominent campaigner for the legalisation of cannabis in Washington State as a Democratic Party opponent to Kshama in her re-election campaign at the end of next year. Therefore, no effort must be spared in striving for her re-election. Kshama is a marvellous powerful voice, not just for the US working class but for workers everywhere.

Without the seething discontent of the American workers at the plunge in their living standards against the background of eye-watering inequality in the richest country in the world, Kshama’s and Socialist Alternative’s victory would not have been possible. There have also been a number of opinion polls that show significant support for socialism among young people across the US.

Yet words alone, a wringing of hands at the ‘unacceptable’ conditions of the working class which is the refrain of many ‘left’ organisations and passive trade union leaders in the US, were as effective as a drop of water on a hot stove. Action, the audacious decision to challenge the bosses and their representatives electorally – the ‘propaganda of the deed’ – linked to the demand for $15, was absolutely necessary. Only Socialist Alternative understood that this would strike a powerful chord amongst the army of low paid in Seattle and throughout the US.

Living wage demand

This has resulted in huge benefits to the low-paid, up to now kept in the dirt by capitalism, but who are now rising to their feet to demand a living wage and denounce the massive ‘wage theft’ of the bosses. Throughout the US a forest fire, which ultimately threatens to turn into a prairie fire, of 15 Now campaigns is raging, with similar victories gained in other cities. Without the example of Seattle this would probably not be taking place, at least at this time.

Seattle has energised the working class, particularly the low-paid throughout the US. Witness the fast food workers strike on 4 September in more than 100 US cities, including Chicago, New York and Detroit, accompanied by marches, sit-ins at fast-food outlets and offices, including McDonald’s, Burger King, and KFC. Police arrested more than 400 people.

A Chicago fast-food worker spoke for all when he declared: “We are definitely on the upward move because we feel justice is on our side… We can’t wait.” McDonald’s, whose headquarters is in Chicago, and sitting on super-profits declared: “Any minimum wage increase should be implemented over time so that the impact… is manageable.”

This example of flint-hearted bosses, who whine that they cannot substantially afford much more than the $7.25 an hour federal minimum wage, is countered by none other than the capitalist mouthpiece, the New York Times. It wrote: “In 2013, after-tax corporate profits as a share of the economy tied with the highest level on record (in 1965) while labour compensation as a share of the economy hit its lowest point since 1948. Wage growth since 1979 has not kept pace… resulting in falling or flat wages for most workers and big gains for corporate coffers, shareholders, executives and others at the top of the income ladder.” [31 August 2014]

New research from the Economic Policy Institute has also shown that from the first half of 2013 to the first half of 2014, hourly wages, adjusted for inflation, fell for nearly everyone not included in the top 10% of the population.

And this, by further depressing ‘demand’, is seriously impacting on capitalism’s economic prospects. Even if Obama’s totally inadequate raising of the minimum wage to $10.10 was introduced, it “would put an estimated additional $35 billion in the pockets of affected workers over a three-year phase in period”. Fast-food and other low paid workers are saying this is not enough; $15 is what is required.

But if Obama’s proposal was implemented, it would in turn generate ‘demand’. This is why, trapped in a ‘Bermuda Triangle’ of seemingly endless crises, sections of the ruling class internationally are urging some concessions to trade unions and workers as a means of generating this ‘demand’, which they hope could lead to an exit from the current situation.

Even Germany’s Bundesbank, hitherto an implacable advocate of austerity, particularly in southern Europe, has undergone a volte face, and encouraged right-wing German trade union leaders by saying they would support them if they fought for above-inflation pay rises of 3% for their members. Concessions for German workers but nothing for the suffering masses of Spain, Portugal or Greece!

Some capitalists would no doubt resist such a call because of the impact this would have on them and their businesses but the strategists of capitalism attempt to look to safeguard their overall interests.

Working class must maximises its power on industrial and political plane

However, Obama’s minimal proposals for an increase in the minimum wage were bitterly resisted in Congress by the Republicans. This demonstrates that the US working class will receive very little in the current situation unless it maximises its power both on the industrial and the political plane. This means a serious electoral challenge to the Democrats in particular, who do not represent the US working class, as shown by the example of Obama in power as well as the little Obamas at state and citywide level.

The renovation of the trade unions is also absolutely necessary. Too many of the trade union leaders go through the motions, lacking any conviction that they can defeat the bosses. One prominent trade union leader in Seattle asked sceptically: “You don’t actually believe that you can defeat big business?” They substitute the idea of action by the working class with the mobilisation of ‘staffers’, paid trade union organisers, rather than the mass involvement of workers.

Kshama’s campaign has opened a new chapter in mass involvement from below of working people fighting to change their lives. So has that of Jess Spear, who received almost 20% of the vote, a splendid result, when she challenged the Democrat Frank Chopp in August’s primary election for the state assembly. The capitalist establishment is taking Socialist Alternative’s emergence as the second political party in Seattle (Republicans are virtually non-existent in this city) very seriously. The challenge to Chopp is seen by both Socialist Alternative and the capitalists as the first round in the battle to re-elect Kshama in 2015.

And it is not just the working class but also the intermediate layers of society – those who previously enjoyed middle-class living standards – who are being affected: The New York Times conceded there is “collusion amongst the biggest companies in Silicon Valley [who] suppress the pay of software engineers by an estimated $3 billion.” Moreover, public employment was once a mainstay of middle-class life, but now “evidence has mounted that outsourcing often does not save money or improve services.”

In other words, all the conditions which have generated growing anger and demands for action amongst US workers are also affecting big layers of the middle class. The US suburbs, synonymous in the past with an escape from the poverty of the inner city, are actually where most of the poverty now exists, as the book “The Unwinding” indicates.

Intractable long-term crisis of US capitalism

Moreover, this is likely to intensify as the intractable long-term crisis of US and world capitalism becomes clearer and is increasingly recognised by their representatives. There is an avalanche of capitalist economists tearing their hair out, along with the CEOs of major US firms, in an attempt to find an escape route from the present economic impasse.

Alongside dire warnings from the OECD, we now find Stanley Fischer, the vice-chair of the US Federal Reserve System, bemoaning “disappointing economic recoveries.” He says that this “may point to a permanent downshift in the potential of powerhouses such as the US, Europe and China”. This comes after Larry Summers, Treasury Secretary under President Clinton, warned of secular stagnation for capitalism. In reality, the expected US recovery from the crisis which began in 2007-08 has not materialised apart from in the pockets of the bosses.

Fischer goes on to ruminate that future prospects are “uncertain” with “lower productivity growth and labour force participation rates… now permanent features of the US economy.” This is code for continued mass unemployment: “Over the past six years, more than 3% of the US labour force has dropped out of the economy, according to the Bureau of Labor Statistics”. [Guardian 12 August]

This underlines what we have consistently argued since the beginning of this crisis that it will not be easy for US or world capitalism to reach ‘escape velocity’, attaining the growth rates of the past with all this means for reduced living standards. Of course, the US economy is of a continental scale and while parts of it can be afflicted by stagnation and decline, there can be growth in other sectors or regions. But there is an overall structural crisis of capitalism, which means further stagnation in living standards.

This is clear from the current and future perspectives for US manufacturing industry, once an engine of US growth in this sector. Obama has spoken enthusiastically recently about the prospects for US capitalism. However, current jobs statistics do not back him up. While 168,000 jobs were recently created in this sector in one month, this disguises the long-term decline and hollowing out of the industrial sector.

The US private sector has created about 10 million jobs since early 2010 and yet just 705,000 are in manufacturing. For every factory job created, there were two in hotels and restaurants and two in healthcare and social assistance. In other words, the US mirrors the situation throughout the ‘advanced’ capitalist countries of protracted industrial decline. It is still the most economically advanced industrial country in overall terms of output, etc. But as Britain – formerly the workshop of the world and the dominant force in world capitalism – has shown, in the wake of economic decline comes increased social tension and an increase in class struggle.

Clashes on scale of ‘60s

The US will not be able to escape this, as the events in Seattle and elsewhere demonstrate. Clashes on the scale of the 1960s, including the revolt of people of colour, are also on the cards. The murder of Michael Brown, a young African-American in the town of Ferguson, Missouri, points to a possible repeat of the events of that period. The militarisation of the police has been taken to extraordinary lengths, with police departments purchasing surplus military equipment from the army. A Democrat congressman compared the state’s intervention in Ferguson to the US occupation of Fallujah in Iraq!

Powers like the stop and searches (‘stop and frisk’ in the US) exercised by the police against black and Asian youth in Britain are being applied in Ferguson with similar results. The town is 67% African-American and yet the police department is 94% white! The police operate almost as an occupation force in cities like Ferguson. The FBI calculates that over 400 people are killed each year in shooting incidents involving local police in the US. The figure is much lower in other countries.

The result is the beginning of the politicisation of the black population, like the 1960s and 70s. Socialist Alternative’s members, including African Americans, have intervened very successfully in Ferguson to further this process. Equally shameful is the persecution of immigrants by the Obama regime, which has ejected more immigrants from the country than all previous presidents put together!

In this situation, the crucial issue is a voice for the oppressed and the working class. Kshama has shown what is possible within one city, as has the Jess Spear campaign. A very interesting and full discussion took place at Socialist Alternative’s convention on the need to broaden the example of Seattle onto a national scale.

Kshama has been invited to speak on a panel (alongside Naomi Klein and others) at the People’s Climate March in New York City on 21 September, which is expected to attract 200,000 people – the largest demo on climate change in history. This will be a crucial event for Socialist Alternative, one that is expected to result in a huge boost to the number of young people interested not only in socialism as the clear and urgently-needed alternative to capitalism. But perhaps more importantly it will show that Socialist Alternative is the only force on the left who are articulating a political strategy to break from capitalism, which necessarily requires a decisive break from the Democratic Party.

There are important straws in the wind of the possibilities of serious challenges by the left to capitalist incumbents. Bernie Sanders, the self-described socialist senator for Vermont, is being pressed by Socialist Alternative and others on the left to challenge the Democrats in the presidential elections. In addition, Karen Lewis, the black teachers’ union leader in Chicago, whose members clashed with the city’s brutal anti-union current mayor, Rahm Emanuel, has indicated a preparedness to stand against him as a ‘non-partisan’ candidate looking towards the labour movement, in next year’s elections. The nature of Lewis’s campaign, the demands she will raise in her campaign manifesto, remains to be seen. A lot depends on whether the mass of the working class and the trade union rank-and-file take on her campaign.

Things are changing dramatically in the US, although the imprint of the previous period on consciousness of the working class, resulting in low levels of class struggle, still exists. However this is not the full picture, as the events of Seattle and elsewhere indicate. Moreover, the world situation, particularly if there was terrorist attack on the US, could have an effect in throwing back consciousness. But even such a horrific prospect will not undermine a resurgence of the American working class over time. Seattle is an anticipation of future mighty events which will see the emergence of a powerful force for socialist change in the US.

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