Labor Under Clinton

Against the Current, No. 43, March/April 1993

Kim Moody

YOU COULD ALMOST hear the collective sigh of relief that swept through organized labor when George Bush conceded defeat to Bill Clinton. True, Clinton had stiff-armed labor as he ran toward his election touchdown that captured the imagination of fans the world around. But he was some kind of Democrat, and any labor leader knows that’s better that any kind of Republican.

Furthermore, his policy papers promised good things like jobs, training, infrastructure projects and health care reform. In any case, the twelve-year nightmare was over. Soon labor leaders were off to little Rock to discuss the transition and later to participate in the economic summit. They were being consulted again and on a first name basis. It seemed like old times.

It isn’t. The world had changed dramatically since 1960, 1964 or even 1976. The crisis of profitability had proved chronic and incurable, even with shock treatment, and spawned a storm of global competitiveness that confounded new and old policy options alike. In boom and in bust, unemployment levels throughout the developed nations remained twice what they were when Jimmy Carter took the oath of office.

Indeed, the boom of the 1980s was more like a bust in the 1950s than a real expansion The shape of business organization, entire systems of production, the rules of world trade, the flow of humanity in search of peace and jobs, the functioning of financial markets: all these and more changed—sometimes beyond recognition.
With these changes crumbled the very foundation of liberal economic policy on which the Democratic Party of yesteryear—the party of big-city bosses, power-brokering labor leaders, and patrician liberals—was based.

Neo-Liberalism and Global Economics

The ascendance of the Democratic Leadership Council (DLC), which the nomination of Bill Clinton and Al Gore symbolized, was a reflection of many of these changes and of the new policies demanded by more sections of capital. It was not simply some regional shift in party leadership, but at a deeper level one event in a broader shift of bourgeois politics the world around.

This shift is best known for the rise of neo-liberal, market based policies that permeate all of the bourgeois parties of the developed capitalist world and infect most of its working-class parties as well. This shift has tilted the politics of the Third World in the same direction, and taken on a nearly messianic character in Eastern Europe and the Confederation of Independent States. It is even the prism through which the entrenched bureaucracy of China views its economic future.

This neo-liberalism is as central to the bourgeois politics of this period of crisis as Keynesian theory was to the preceding era of capitalism. The neo-liberal policy paradigm attempts to address the crisis of profitability through a violent, continuous restructuring process (business-cycle economic theorist Joseph Schumpeter called this “creative destruction”).

While Keynesianism attempted to minimize the forces of competition and the business cycle, neo-liberalism seeks to unleash them in the hope that the devaluation of the weak will restore the profitability of the strong. The greater the economic chaos and social damage that the various versions of this policy mixture inflict in one or another region, the more tightly are its precepts embraced in the ascending power centers of trans-national capital.

It will not be officially declared a failure, because there is always one more barrier to be removed before its proper global application. And unlike Keynesianism, it is a global policy: Free trade, or in reality global trade guided by expanding multinational corporations and world-wide financial markets, are central to it Thus its “real test” is always one more multilateral negotiation away.

Whereas Keynesianism was based on the growing ability of the bourgeois state to intervene in the economy, neo-liberalism seeks to transfer policy-making power from the national state to elite multilateral institutions—the General Agreement on Tariffs and Trade (GATT), NAFFA’s dispute settlement panels, the austerity-mongers of the International Monetary Fund and World Bank—or to the multinational corporations themselves.

This is one way of limiting popular influence within bourgeois democracy. As the Director of the Canadian pm-free trade Fraser Institute put it bluntly, “A trade deal simply limits the extent to which the U.S. or other signatory government may respond to pressure from their citizens?

Indeed, as each new phase of global neo-liberalism is implemented—for example, the expansion of GAIT to services and finance in the Uruguay Round—the limits to nationally based reformism become greater. These limits are attributed to the world market and portrayed as a force of nature. Reformism, which needs the national state to implement its policies, appears more and more its neo-liberalism more inevitable.

Where Neo-liberals Lead

While neo-liberalism is fundamentally an ideology of the business right, it also seeks to infect bourgeois liberal and working-class social democratic politics. Like Keynesianism, neo-liberal policies can be implemented with more or less meanness. They can be combined with programs designed to grease the wheels of restructuring, whether through austerity and high unemployment as in Mexico, or through “active labor market policies” (training) and ameliorating, although diminishing, welfare measures, as in Europe.

Just as Keynesianism in the United States could be accompanied by racial segregation and, later, its destruction, so neo-liberalism can be introduced with or without pro-choice laws. The purposeful multiculturalism of Clinton’s Cabinet appointments are an indication of such residual social liberalism, even though more symbolic than programmatic.

The media often found Clinton’s appointment of ardent Congressional budget balancers like Leon Panetta and Lloyd Bentsen, on the one hand, and social liberals from academia like Donna Shalala and Robert Reich, on the other, a bewildering contradiction.

In fact, this is the sort of mutually canceling political algebra that neo-liberalism with a heart calls for. While “big ticket” programs are out, these policy differences represent a marginal cost for periodic social and political damage control well within the more basic policy direction dictated by the reigning supreme being, competitiveness.

In the United States, the rise of the DLC represents this infection in the context of the Democratic Party even more than the white swing voter electoral strategy for which it is best known. The DLC’s Progressive Policy Institute, for example, grinds out policy papers reflecting this human face of neo-liberalism and touting the competitive virtues of improved education, training, targeted (as opposed to random ‘supply-side’) business tax breaks, R&D and that most magic of centrist policy prescriptions, infrastructure.

Competitiveness and Clintonomics

As one Clinton aide told the Wall Street Journal (January 8, 1993), “There’s no question we’ll hurt some people. The issue is: Do we have to do the really, really ugly stuff.” Maybe. Maybe not. Some ugliness surfaced early in Clinton’s proposals to eliminate the cost-of-living escalator on Social Security, and welfare “reform” that would boot recipients into the labor market or “community service” (replacing higher paid public employees?) after two years.

What seems clear is that any really nice stuff is excluded. The universal excuse, heard in Congressional as well as presidential circles, is the federal deficit It cost $214 billion in 1992 just to service— interest largely paid to the rich and to large financial institutions. That is a fifth of the federal budget. Some people, including Commerce Secretary Ron Brown, believe the budget deficit also encourages the trade deficit.

The first budget compromise has already been made. The $20 billion a year infrastructure investment in roads and fiber optic networks will most likely be cut to $10 billion.

In Little Rock, FOB means Friend of Bill, but it might as well mean Friend of Business. Robert Rubin, co-chair of Goldman Sachs, will be Bill’s economic sidekick. Chief of staff “Mack” McLarty is CEO of Arkia Inc., a Fortune 500 gas company. Ron Brown represented both U.S. and Japanese firms as a lobbyist. Trade advisor Mikey Kantor represented Fortune 500 firms like General Electric.

Would-have-been Attorney General Zoe Baird was chief counsel for GE and then Aetna Life Insurance and Casualty Co—as in medical insurance. Lawrence Summers of the new Council of Economic Advisors was chief economist at the World Bank, a fine place from which to develop a perspective of transnational capital.

The Managed-Competition Scam

Not surprisingly, Clinton and his team prefer private sector versions of social programs. To make it so, he plans to cut the federal workforce by 100,000 jobs during his first term. But nowhere is this fetish of privatization clearer or more disastrous than in the case of national health care.

Clinton is said to favor what is known as “managed competition.” Care delivery for the previously uninsured will be provided by bare-bones managed care networks, financed by the existing private insurance industry. Workers with union-negotiated plans that offer more than the bottom-of-the-line competition will be taxed for the difference. The entire system that costs so much and keeps workers dependent on their employer for health care will remain intact, amended by bargain basement HMO-style care delivery.

Unfortunately, Clinton will get little flack rom the AFL- CIO on this defective health care proposal. The building trades, for example, oppose a single-payer system because the private plans they control would pass to a government or parastatal insurer. The majority of the AFL-CIO Executive Council, at the urging of the building trades leaders, never supported single-payer and withdrew its support of the “pay or play,” with its public insurer for the poor, in favor of Clinton’s “managed competition.”

A small group of unions including the Teamsters, Communication Workers and the Oil Chemical and Atomic Workers, still supports a single-payer plan, but the recent defection of the United Auto Workers and the American Federation of State, County and Municipal Employees has probably wounded this coalition mortally.

Cooperation for Competitiveness

Clinton’s choice for Labor Secretary says much about his plans for the unions. Robert Reich is generally regarded as the far left of the Clinton Administration, but he scarcely mentions unions in his recent writings. His only tie with organized labor is an indirect one: He sits on the research committee of the union-funded Economic Policy Institute (EPI).

At the same time, Reich is the embodiment of both the evolution of the American version of neo-liberalism with a human face and its current policy mixture. Ten years ago Reich was a sort of crypto-social democrat advocating ‘Industrial Policy,” a watered-down version of European indicative planning with a decidedly protectionist flavor. Hence, his seat at EPL.

But Reich, like so many others during the 1980s, learned to love the world market. Today, in his book The Work of Nations and articles in Harvard Business Review, he says the United States must learn to roll with global market forces. Protecting inefficient industrial facilities or services will only render the country uncompetitive.

So far, pretty familiar conservative business stuff. But one thing that makes Reich and Clinton different from Bush is that instead of massive tax giveaways to the rich, they advocate making the United States competitive through targeted tax-breaks for corporations accompanied by improvements in the infrastructure. Reich’s idea-of-the-day is tore-wire the U.S. telecommunications system with state-of-the-art fiber optics.

Along with this shiny new United States goes a constant process of job training and retraining to create state-of-the-art workers. This will bring its own solution. “Global investors will come and era-ate good jobs if we have a well trained workforce,” Reich told the New York Times (January 10, 1993).

An even bigger difference is that, unlike the DLC electoral strategy, the Clinton-Reich strategy for global competitiveness requires the embrace of organized labor—not its exile. As any corporate executive can tell you, the best way to move your company from old tech to new, from rigid rules to flexibility is without unions altogether, but breaking them outright is “really ugly stuff.”

Besides, as a decade of labor-management cooperation schemes revealed, when you already have unions, gaining their cooperation is almost like not having them. In fact, at the national level you actually need unions to pretend that the workers are being represented in the continuous industrial restructuring process that is the road to competitiveness.

Labor-management cooperation is likely to get a big boost under a Clinton National Labor Relations Board. He will appoint three new NLRB members and its chief counsel later this year. These will be cooperatively minded liberals who understand you need unions to make a deal—like flexibility in exchange for training.

This new board may also decide on the legal challenge to cooperation schemes presented in the Teamster-Electromation interpretation of the National Labor Relations Act The current board (the one dominated by Reagan-Bush appointees!) found that labor relations still are adversarial and workers need their own organizations.

Should the new Board clear the way for “employer-dominated” teams or circles, they will lend government backing to the spread and deepening of this longstanding, but never completed management campaign to defang unionism. This approach is certain to produce more labor flexibility than Dan Quayle’s Competitiveness Council ever could.

There isn’t much doubt that most top labor leaders will buy into this deal. At the December economic summit AFL, CIO Secretary-Treasurer Thomas Donahue told Clinton, “You need to engender a new spirit of cooperation—labor, management, and government.”

Don’t worry, Tom. In January, the United Steelworkers of America offered the basic steel companies a long-term (possibly nine-year) contract with binding arbitration, a more intense cooperation program than their current employee involvement plan, and a free hand in “workforce restructuring.”

Your Job or Your Rights!

The Clinton national cooperation mechanism may go farther than a new mood at the NLRB or interpretations that declare the common interests of labor and capital Last year, Republican Senator Bob Packwood amended the Senate version of labor’s pet bill, the Worker Replacement (anti-scab) Bill, to include compulsory arbitration of the contract in dispute as a condition of anti-scab protection.

This sort of compulsory cooperation would be a boon to government competitiveness officials and corporate managers pushing for high tech restructuring over the objections of workers or unions. Last year the AFL-CIO went along with the Packwood amendment in hope of passing the bill, which died from a filibuster anyway.

The current version of the bill being reintroduced in the House does not in-dude any of the Packwood language. But AFL-CIO Legislative Director Peggy Taylor acknowledges that the political balance in the Senate has not changed enough to guarantee passage of the unamended bill. There is nothing to prevent a rerun of last year’s scenario—with or without a filibuster.

It is certainly hard to imagine Bill Clinton vetoing a bill with such a nifty labor-peace device as compulsory arbitration of contracts. Look at what a similar procedure in the Railway Labor Act did to thwart rail union strikes in the last two years—and what inspiring bipartisan support there was for that!

Restructuring Afta’ NAFIA

As he made clear to Mexican President Carlos Salinas in January, Clinton is committed to the North American Free Trade Agreement (NAFTA) as written under the direction of George Bush. He may wish to negotiate some “side agreements” on labor rights and environmental standards, but these will not alter or restrain the forces NAFTA is designed to unleash.

NAFTA will erode the ability of government to enforce social standards over time. At the same time, it will release market forces that will intensify the ongoing reorganization of many industries throughout North America. Already feeling the impact of such primal economic forces are auto, electronics, electrical machinery and garment, to mention a few key cases.

As the business press has noted recently, the drastic loss of jobs in the United States and Canada in the past four years is not simply the result of recession or the business cycle. Canada has lost almost half a million manufacturing jobs since 1989, half of these due to permanent plant closings according to Ontario Ministry of Labor figures. Estimates of U.S. manufacturing job loss have reached two million. The Cleveland-based magazine Workplace Trends estimates that business eliminated 1,400 jobs each business day during the last three years.

As the Washington Post pointed out in its weekly edition (November 16-22, 1992), massive downsizing of U.S. industry is taking place in the belief this will make these corporations more internationally competitive. A Morgan Stanley economist told the Post, “This is not a normal recession and recovery cycle. The economy is feeling the pain of structural change.”

Industry is also fragmenting. Business Week (November 23, 1992) notes that the high tech computer industry is “deconstructing–shutting factories, cutting jobs, spinning off subsidiaries, farming out work, and slashing management?

NAFTA will accelerate all of this, by ending limits on investment in Mexico and by further restricting legislation to control capital flows or their impact Indeed, the specific effects of NAFTA can already be seen as major U.S. trade and transportation patterns alter increasingly from their traditional east-west direction toward a north-south axis.

From 1987 through 1992 U.S. trade with Mexico grew at about twice the rate of total U.S. trade. Reflecting this trend, the number of U.S. to Mexico truck crossings at Laredo-Nuevo Laredo, the busiest truck crossing along the border, tripled from 1989 through 1992.

The forces of restructuring have gained direction and momentum in the last few years. There is little doubt that low wages and lax standards in Mexico will be far more attractive to Reich’s “global investors” than Clinton’s drop-in the-bucket infrastructure program or “a well trained workforce.” Indeed, Mexico has already shown it can produce a well trained workforce at a fraction of the cost.

In any case, the proposition that high tech industries will produce skilled, high paying jobs as Reich predicts is dubious at best A recent study by Patricia Fernandez Kelly of Johns Hopkins University, for example, shows that the majority of jobs in Southern California’s burgeoning electronics industry are not particularly skilled and pay $2-3 an hour less than the U.S. average for manufacturing.

The irony is that Clinton’s softer cooperative approach to economic restructuring and competitiveness will be set against a background of market forces even more volatile and powerful than those characterizing the era of Republican rule. Job training offers little hope for the many workers certain to be displaced in the United States and Canada by the next decade of business reorganization and, as Business Week put it, the “deconstructing” of more and more industries.

Bargain basement levels of infrastructure improvement will not offset this. Everything now going on in North America, Europe and East Asia, where outsourcing and industrial “deconstructing’ are as evident as here, demonstrates that global investors” are not seeking out high-paid workers, but are fleeing them or turning them into low-wage workers.

Labor: Fight or Die

Organized labor in the United States has its work cut out There will be little shelter from the storm of economic integration and restructuring. While the language of cooperation may be even more pervasive, the employers have already learned how to talk cooperation and play hardball at the same time.

There will be little to be gained for the unions by slipping into the embrace the Clinton Administration will offer. Yet most top labor leaders will undoubtedly be forthcoming with arms wide open. Little independent action can be expected from these quarters. As more workers get a taste of one-way cooperation, however, the new situation may provide some openings for the infant insurgent movements that emerged in several unions in the late 1980s.

In the political arena, inaction by the labor leadership, little or no economic relief for the vast majority, broken promises from the new administration, and a dissatisfied active minority in the ranks, could intensify grassroots rebellion—and not only in the unions. The lack of legislative and policy preparations, and potential loss of initiative by the Clinton Administration and the unwillingness of the AFL-CIO leadership to push an independent program, could provide space for an alternative politics.

On national health care, for example, Clinton appears unable to set his own time table. The AFL-CIO as previously noted has abandoned the fight for single-payer health care. A more militant fight for single payer could come from the new Teamsters leadership, other unions still committed to single payer, Jobs with Justice, and the grassroots coalitions formed to fight for it.

Even on NAFTA, it now appears unlikely Clinton can get ratification before late 1993, giving opponents some time to mount a more convincing opposition than the AFL-CIO seems willing to organize. A recent Wall Street Journal poll indicates that of those who have an opinion on NAFTA, two-to-one are opposed.

Passive opinion, conventional lobbying, and letterhead coalitions, however, won’t do the trick. Mass mobilization and action are the necessary starting point, as they were in the 1960s or the 1930s. If such movements arise they may encourage the still-infant movements for independent political action.

March-April 1993, ATC 43