Economic Conditions and Hollow Victories
Among the very few things to look forward to on Labor Day is Jack Rasmus’s annual report on the state of US labor. Rasmus, an accomplished political-economist, riffs on the famous Frederick Engels book with Labor Day 2024: The Condition of the American Working Class Today. It may come as a surprise to some, but academically-trained economists are among the most intellectually shallow and ideologically tainted practitioners of the social sciences. Some are so in awe of their own academic specialty that they paint all economic trends through specialist lenses. Still others are so tied to their political biases that they cannot resist slanting their conclusions to reinforce their loyalties to one of the two political parties that we are currently allowed.
Rasmus is the rare university-educated purveyor who knows where to look, looks critically, and clearly synthesizes the data to draw broad and useful conclusions for working people. For a philosophically-trained skeptic and self-styled Historical Materialist, I have grown to trust Rasmus’s digest of the meaning of arcane, jargon-filled, often-misleading government reports.
Of course, we have had earlier times when similar data were available. For over three decades, Labor Research Associates — a group of Communist and left researchers — published a comprehensive Labor Factbook every two years that addressed “labor trends,” the “social and labor conditions” of the period, “people’s health,” the “trade unions,” “civil liberties and rights,” “political affairs,” and “Canadian labor developments.” This comprehensive book armed working people who cared to advance the cause of workers with a cache of ammunition in the class war. We don’t have Labor Factbook, but we are lucky to have Jack Rasmus’s report.
What does his report tell us?
● Despite $10 trillion in stimulus since the pandemic, the US economy has only produced an anemic recovery: GDP of 1.9% (2022), 2.5% (2023), and 2.2% (2024, to date).
● And the US worker fared even worse: “…with regard to wages, the American worker has not benefited at all from the $10 billion-plus fiscal-monetary stimulus. Real Weekly Earnings are flat to contracting. And take-home pay’s even less.”
● The great US job creation machine that US politicians celebrate is not performing so well: “It is important to also note that the vast majority of the net new jobs created have been part-time, temp, gig and contractor jobs. In the past 12 months, full-time jobs in the labor force [have] fallen by 458,000, while part-time jobs have risen by 514,000.”
Typical of an election year, official reports grab headlines, exaggerating job gains, only to be corrected later: “The jobs reports over the past year are revealing as well. They continually reported monthly job gains of around 240,000. But the Labor Department just did its annual revisions and found that for the period March 2023 thru March 2024 it over-estimated no fewer than 818,000 jobs!” [The September 6 employment report downgraded June and July’s job growth by a further 86,000 jobs!]
“The Wall St. Journal further reported that up to a million workers have left the labor force due to disability from Covid and long Covid-related illnesses. Neither of those statistics [is] factored into the government’s unemployment rate figures.”
● For working-class citizens, debt has been a paradoxical life-saver, supplementing slack wage growth. But it continues to grow at a dangerous pace and with increasingly unsustainable interest rates: “The last quarter century of poor-wage increases has been offset to a degree by the availability of cheap credit with which to make consumer purchases in lieu of wage gains and decently paying jobs. Actually, that trend goes back even further to the early 1980s at least.”
“Household US debt is at a record level. Mortgage debt is about $13 trillion. Total household debt is more than $18 trillion, of which credit-card debt is now about $1 trillion, auto debt $1.5 trillion, student debt $1.7 trillion (or more if private loans are counted), medical debt about $.2 trillion, and the rest installment-type debt of various [kinds].
American households carry probably the highest load of any advanced economy, estimated at 54% of median family-household disposable income. And that’s rising.
Debt and interest payments have implications for workers’ actual disposable income and purchasing power. For one thing, interest is not considered in the CPI or PCE inflation indexes and thus their adjustment to real wages. As just one example: median family-mortgage costs since 2020 have risen 114%. However, again, that’s not included in the price indexes. Home prices have risen 47% and rents have followed. But workers pay a mortgage to the bank, not an amortized monthly payment to the house builder.
One should perhaps think of workers’ household debt as business claims on future wages not yet paid. Debt payments continue into the future for purchases made in the present, and thus subtract from future wages paid.”
Since Rasmus penned his report, the Census Bureau released its report on household incomes. While there was an uptick in 2023, median household income adjusted for inflation remains below the levels of 2018, explaining why poll respondents (and voters) are feeling insecure about the economy. In fact, household incomes have only increased around 15% over the last twenty-three years– hardly a reason for a victory lap by the last four administrations… or the capitalist system!
● Rasmus brings a necessary sobriety to the discussion of the state of the organized trade union movement in the US. While there are many exciting developments, the goal of building a formidable force to advance the interests of working people remains far off: “Since 2020 union membership has declined. There were 10.8% of the labor force in unions in 2020. There are 10.0% at end of 2023, which is about half of what it was in the early 1980s. Unions have not participated in the recovery since Covid, in other words, at least in terms of membership. Still only 6% or 7.4 million workers of the private-sector labor force is unionized, even when polls and surveys in the past four years show a rise from 48% to 70% today in the non-organized who want a union.”
“Recently the Teamsters union under new leadership made significant gains in restoring union contract language, especially in terms of limits on temp work and two-tier wage and benefit structures. The Auto workers made some gains as well. But most of the private-sector unionization has languished. And over the past year it has not changed much.
About half of all Union members today are in public-sector unions. It has been difficult for Capital and corporations to offshore jobs, displace workers with technology, destroy traditional defined-benefit pension plans, or otherwise weaken or get rid of workers’ unions. The same might be said for Transport workers, whose employment is also not easily offshored but is subject to displacement by technology nonetheless. But overall, union membership has clearly continued to stagnate over the past year, as it has since 2020.”
Rasmus’s candid conclusion: “The foregoing accumulation of data and statistics on wages, jobs, debt and unionization in America this Labor Day 2024 contradicts much of the hype, happy talk, and selective cherry picking of data by mainstream media and economists. That hype is picked up and peddled by politicians and pollsters alike.”
*****
And speaking of politicians…
A recent Jacobin piece stands as a sterling example of torturing facts and logic to build the case that Democratic Party politicians got the “stop the genocide” message at the Party’s national convention. Waleed Shahid writes that “the Uncommitted movement didn’t win every immediate demand…” in his article Why the Uncommitted Movement Was a Success at the DNC. The Uncommitted Movement didn’t win any demand — immediate or otherwise — at the DNC!
It takes some skill and determination to recast a near totally effective effort to stifle the voice of pro-peace and pro-justice participants and protesters into “not just a fleeting victory — it is the beginning of a strategic shift in how the Democratic Party grapples with its own contradictions.” Sad to say, it takes a twisted perception to see “victory” and “a strategic shift” while convention-goers derisively and dismissively stroll past demonstrators reciting the names of civilians murdered by the Israeli military.
Shahid attempts the impossible in likening the 2024 Democratic Convention to the 1964 Convention, when brave civil rights activists shamed the Democratic Party before television cameras and journalists into negotiating with the Mississippi Freedom Democratic Party (See this sharp comparative account in Black Agenda Report). There was neither shame nor negotiations in 2024.
Like Democratic operatives before him, Shahid scolds those expecting more from Democrats to– in the future– “out-organize” the Neanderthals controlling the party. In other words, force them to do the right thing!
When one finds a credible political party to support, it should not be one that must be coerced to support justice.
*****
It is a commonplace on the soft left to advocate a broad coalition or united front to address the rise of right-wing populism in Europe and North America. Building on the ineffectiveness of the long-ruling centrist parties, the French RN, Germany’s AfD, the US’s Trump, and a host of other populist movements have mounted significant electoral campaigns. The knee-jerk left reaction is to advocate a broad popular front of all the oppositional parties or movements, a tactic modeled crudely and inappropriately on the Communist International’s anti-fascist tactic.
Most recently, the French left conceded to an electoral “popular front” with the ruling president, Emmanuel Macron’s party and other parties in opposition to Marine Le Pen’s RN. To the surprise of many, the left won the most votes and should have — by tradition — organized a new government. But President Macron “betrayed” popular-front values and appointed a center-right career politician, hostile to the left, as prime minister. To add insult to injury, Macron consulted with Le Pen for approval of his appointment.
Consequently, despite commanding the largest vote, the popular front is in a less favorable position and the right is in a more favorable position than before the electoral “victory” (see, for example, David Broder’s Jacobin article for more).
This move by Macron should sober those who glibly call for a popular front as the answer to every alarm, every hyperbole regarding the populist right.
Because of this gross misapplication of the united-front tactic, I can enjoy an I-told-you-so-moment. I wrote in late June: “The interesting question would be whether Macron’s party would return the favor and support this effort in a second round against RN. I doubt they would. Bourgeois ‘solidarity’ only goes so far.” Where the left selflessly threw its support behind Macron’s party where it needed to win, Macron through his deal with Le Pen, threw the left under the bus!
Hollow victories, indeed.
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