Why the Industrial Working Class Still Matters

Against the Current, No. 58, September/October 1995

Kim Moody

DURING THE 1980s the theorists of post-industrialism, post-modernism and/or flexible specialization dismissed the industrial working class from the stage of history.  No one was more dismissive than the dean of post-industrialists, Peter Drucker, who wrote, “No class in history has ever risen faster than the blue-collar worker.  And no class in history has ever fallen faster.”  (Drucker, 1994)

Whether or not they directly addressed Marxism, as Drucker did, these theorists drew on the obvious fact that the traditional goods-producing workforce was declining as a proportion of the total workforce and even in absolute numbers in much of the developed industrial world.  Furthermore, as the flexible specialization theorists emphasized, the average manufacturing workplace was getting smaller and centralized production complexes were giving way to clusters or chains of smaller producers.

All of these trends seem to contradict the image conjured up by Marx’s famous statement in the “Communist Manifesto” that “with the development of industry the proletariat not only increases its number; it becomes concentrated in greater masses, its strength grows, and it feels that strength more.”  (Feuer: 16)

Certainly in the United States, the last twenty years or more do not resemble this picture of capitalist development.  The changes in the structure and organization of capitalism both in the developed industrial nations and internationally have reshaped the working classes profoundly.  For revolutionary Marxists these changes pose the question of whether or not the industrial working class remains central to revolutionary socialist strategy. Before discussing the relative weight of the industrial working class, an historical note is in order.  Drucker reminds us that during Marx’s life and even into the 20th century the two largest groups of toilers were farmers and live-in servants.  (Drucker, 1994) In other words, the majority of working people were not engaged in wage-labor in the Marxist sense.

It is evident today that the vast majority of the population (perhaps 80% of the workforce) live and reproduce themselves only through wage-labor that produces surplus value, regardless of the nature of the commodity (good or service) they produce.  Whatever the changing weight of the industrial sector of this enormous, working majority, it is clear that the working class as a whole is proportionately far larger today than at the time of classical Marxist writers such as Marx, Engels, Lenin, Trotsky, Luxemburg, Gramsci and so on.

What is the Industrial Working Class?

Even so seemingly simple a question as what the industrial working class is, isn’t simple.  Marxists have debated this for decades and continue to do so. As Hal Draper points out in his Karl Marx’s Theory of Revolution, the industrial working class is not limited to those “at the point of production” or even those producing “goods.” As capitalism “commodifies” more and more aspects of life, services too become commodities and some increasingly important to accumulation. Strictly speaking, the industrial “proletariat” is not even limited to manual workers. At the same time, it does not include everyone who works for a wage or salary. (Draper:33-38)

Like the capital that gives birth to it, the working class continuously changes. Radical changes in the global division of labor, for example, bring with them enormous labor migrations, industrialization in one region and deindustrialization in another, and deep changes in the social composition of the class. Changes in technology and the general tendency of production to become more “round about” alter the weight and functional composition of the industrial working class.

It is this latter transformation that this article will focus on. Although the figures in the text and the Statistical Appendix are from the United States, the trends described apply to many other industrial nations as well.

There are three major changes in contemporary capitalism that are altering the structure and composition of the working class as a whole and of the industrial working class in particular. The first has to do with the general progress of technology in the course of capitalist accumulation and development. Here I will look at what Marx had to say about this in his more advanced theorization of capitalist development.

The second is the change in the national and international division of labor associated with the reorganization of production along the lines of internationalized “lean production”—the real context of flexible specialization. The third, which flows from the first two trends, is the tendency of accumulation to absorb more and more of the formerly independent “infrastructure” into production itself. (Sassen: passim.) This latter notion is associated with technological advances in transportation and telecommunications and their increased incorporation into today’s production chains.

The conclusion I draw from these trends is that today’s industrial working class is composed of far more than workers in traditional blue-collar factory jobs and their households. It necessarily includes many workers often theorized as post- industrial, information age, or service economy workers.

For the purposes of this analysis, I will define the industrial working class as those private sector production or nonsupervisory workers (and their households) in mining, construction, manufacturing, transportation, communications and energy production, on the grounds that these are the areas of the economy most central to the contemporary accumulation process.

Defined in this way, as the figures in the Appendix show, the U.S. industrial workforce, the employed sector of the industrial working class, declined from about half the private sector, nonsupervisory workforce in the 1960s to 29% in 1992. In absolute terms, the industrial workforce peaked in the late 1970s at about 22 million and is now at the numerical level of the 1960s of slightly more than 20 million production workers.

The “disappearance” of the industrial working class, so far, is largely a decline in proportion due to the rise of service sector employment in recent years. In actual fact, these figures understate both the absolute and relative size of the industrial working class.

Government workers, of course, are also working class people, some of them part of the industrial working class by virtue of their role in transportation, communications, and energy production. As of 1992, there were some 644,000 federal, state and local employees engaged in manufacturing, ship building, transportation, communications and energy. An additional 792,000 employees worked for the postal service. (Department of Labor, 1994: 474478)

Much the same can be said of many workers in classifications like wholesale trade, business services and other services that are really contracted pieces of production. The problems of incorporating these workers that are built into the government figures, however, lead me to exclude them in this analysis, hence understating the size and weight of today’s industrial working class.

An Optical Illusion

It should also be borne in mind that the rapid expansion of the “service” sector in relation to total employment rests in part on a kind of optical illusion. For one thing, as Andrew Sayer and Richard Walker effectively argue, many industries lumped into the service sector by conventional government statistics produce measurable material commodities.

For example, coal and oil taken from the earth are “goods,” but manufactured electric power or gas are “services.” Conversely, as Sayer and Walker point out, the Economist‘s definition of “services” as “everything you cannot drop on your foot” is much too broad. If the labor force statistics were divided along Marxist lines between production and circulation, the result would be very different from the current picture of the “service economy.” (Sayer and Walker:56-69)

For another, much of the numerical growth of employment in services is the result of the disproportionate number of part-time jobs in that sector, particularly in the wholesale and retail trade (30%) and catch-all services (24%) categories, compared to the industrial sector (7%). (Department of Labor, 1995: 221)

Thus, while average weekly hours in manufacturing were 41.4 in 1993, in retail they were 28.8 and in “services” they were 32.5. In other words, the proportion of society’s total labor hours performed by the industrial working class is significantly higher than the mere numbers of its workers. Also, 73% of multiple-job holders work in the service sector, which exaggerates the number of actual workers, as opposed to jobs (many part-time) in that sector (Department of Commerce: 405,420)

The final deflector in this optical illusion is that the massive growth of retail and service employment is also in large part a function of the technological backwardness of these sectors. The application of “lean production” methods and process technology to these labor-intensive sectors is only now beginning, in part because of the abundance of cheap labor, and productivity growth in these areas remains low.

In fact, it is these sectors that are a drag on the frequently cited low productivity figures for the U.S. economy-productivity gains in the industrial sectors have been at or above historic levels for some time. But insofar as “reengineering” and process technology take hold in retail and services, as they already have in finances, job growth will slow and in some areas give way to declining employment levels.

What Does Marxism Really Say?

One interpretation of Marx’s statement that “with the development of industry the proletariat not only increases its number, it becomes concentrated in greater masses…” has been that production complexes would become larger and draw in more workers. Though this has been the “story” at the heart of much revolutionary strategy and thought for decades, it hasn’t been true for half a century.

While in the United States and many other fully developed capitalist nations the industrial working class has in fact continued to grow numerically until very recently, peaking in the United States in the late 1970s, it has obviously shrunk as a proportion of the total employed working class. Similarly, the number of manufacturing plants employing 1,000 or more workers has actually declined from 3,000 in 1963 to 2,000 in 1987 (the most recent figure). The number of small and medium sized plants, on the other hand, has grown. (Department of Commerce: 752)

Like most aspects of Marxist analysis, the development of the proletariat has more than one side. Marx, for example, simultaneously saw the working class as the “universal” collectivist class and as a class ripped apart by internal competition and contradictions.

Thus, he saw a previously dispersed agrarian mass herded into cities and factories as they never had been before and transformed, over time, into a far more concentrated social class. He chronicled the transformation of “the little workshop of the patriarchal master into the great industrial factory of the industrial capitalist.” Bear in mind, however, that an average “great industrial factory” when Marx penned those words (1848) probably employed fewer than 100 workers.

When, in the aftermath of the 1905 revolution, Trotsky examined Germany and Russia, he discovered that in “advanced” Germany most plants employed less than 50 workers (accounting for 44% of the workforce), while only 10% of the manufacturing workforce worked in the 563 factories employing over 1,000 workers. And this was a half-century after Marx had made his initial projections about “great industrial factories.” (Trotsky: 38-39)

Despite the persistence of not-so-large plants, the trend toward larger factories would, of course, continue with the emergence of mass production after the turn of the century. There is, however, another side of Marx’s analysis of the development of the working class in the advancing process of accumulation. As Marx expressed it in Capital, “Once given the general basis of the capitalistic system, then, in the course of accumulation, a point is reached at which the development of the productivity of social labor becomes the most powerful lever of accumulation.” (Marx, 1967:621)

The title of the section in which he develops this idea is titled “Relative Diminution of the Variable Part of Capital Simultaneously With The Progress of Accumulation and of the Concentration That Accompanies It.” The variable part of capital is, of course, labor-power. The point is clear: As the productivity of labor increases due to the constant and growing application of fixed capital (concentration), the actual need for workers diminishes in relation to output.

Thus, far from producing ever greater concentrations of workers, the concentration of capital actually begins to reduce them at some point. This aspect of Marx’s analysis of the development of capital and the class it employs is linked to the concept of relative surplus value, where the time required to reproduce the laborer is reduced by labor’s growing productivity.

The concept of relative surplus value makes it clear that in the course of capitalist development, the amount of labor-power required by capital must decline. Marx was explicit on this point, writing in the Grundrisse:

In the second form of surplus value, however, as relative surplus value, which appears as the development of the workers’ productive power, as the reduction of necessary labor time relative to the working day, and as the reduction of the necessary laboring population relative to the population, in this form there directly appears the industrial and the distinguishing historical character of the mode of production founded on capital.  (Marx, 1973: 769)

This “distinguishing” characteristic of capitalism is what creates the reserve army of labor so essential to Marx’s view of wage determination and capitalist development. The reserve army is not primarily the result of the business cycle or of changes in the international division of labor, though it may be affected by both. It is an essential feature of developed capitalism.

The reserve army of labor is not only the unemployed, but the underemployed, casualized labor, and the latent workforce found among labor force drop-outs and groups not yet in the labor force- in other words, many of those often described today as “contingent” workers or as working in the “underground economy.”

Capitalism thus both creates full-time industrial work and shatters it over the course of its development. In addition, as “the productivity of social labor becomes the most powerful lever of accumulation,” each new generation of plants will employ still fewer workers per unit of capital. These new plants are not necessarily smaller in terms of physical size, capital invested or output; but they will employ fewer workers in proportion to all three.

Marxism thus tells us that the fifty-year old trend toward plants with decreasing concentrations of workers is inherent in capitalism itself, quite aside from the acceleration of the process brought on by decentralized and internationalized production techniques.

Concentration and Centralization of Capital

Plant size is only one aspect of the concentration of capital. The concentration of capital proceeds from accumulation itself. As capital (organized as a company or corporation) accumulates, it does not simply add to the same old plant. It also builds new plants, some spatially removed from the older ones.

Indeed, given the historic rise of urban and then suburban land rents, geographic dispersion is also a virtually inevitable outcome of accumulation and concentration in the long run. The post-WWII period of growth in the United States saw the industrial giants like GM or GE grow in this manner, almost entirely through reinvesting profits in new plants-removed from old urban centers of working class organization. Though their plants were strung across the country, they were still concentrations of capital in precisely the sense that Marx meant.

In recent years this type of concentration has decelerated as capital put a growing proportion of productive investment into labor-saving technology to cope with the intensified competition that is also built into the accumulation process. Instead, capitals have expanded their operations more through mergers, buyouts, and takeovers-in amounts that exceeded expenditures on plant and equipment in manufacturing by the late 1980s.

This Marx called the centralization of capital, which he saw as simply another way to “extend the scale of their operations,” one that “intensifies and accelerates the effects of accumulation.” Overall the process creates larger and larger capitals or firms. For the winners, this process too “raises its constant portion at the expense of its variable portion.” (Marx, 1967:625-628)

The expansion through combined concentration and centralization of capital leads toward the development of larger capitals with increasing concentrations of workers-not in individual plants, but under the same capital or employer. This is reflected in the fact that, as you can see in the Statistical Appendix, up to the late 1970s multi-plant companies grew faster than single-plant companies, employed a growing proportion of workers, and created an increasing percentage of the value-added in manufacturing.

While the 1980s saw a small reversal in this direction (for reasons discussed below), it is clear that the tendency is for small (entrepreneurial or sub-contracting) outfits to grow or be gobbled up, as has happened in electronics.

Employment levels in multi-plant firms saw a similar pattern, but 72% of manufacturing workers worked in multi-plant firms in 1987 compared to 68% in 1963. These multi-plant firms produced 82% of all manufacturing value added by 1987.

Figures on the concentration of assets illustrate the trend even more graphically. Over the twenty years following 1970, the corporations worth over $1 billion increased their share of corporate assets from 49% to 72% of the total, at the expense of both small and middle-sized corporations. (Department of Commerce: 558)

So it is that the gathering of larger groups of workers under the same capital does increase through the combination of concentration and centralization of capital. In fact, in relation to the rest of the economy, even the concentrations of industrial workers in their individual workplaces remains greater than those of other workers.

Despite the declining average employment in manufacturing plants, the concentration of workers in manufacturing plants remains higher than in any other sector, with 23.4% of employees working in plants of 1,000 or more workers. Transportation, communications and energy are next at 18%. The average for the private economy as a whole is 13%.

The number of employees in plants or work locations employing over 1,000 people was 5.9 million in 1990 (compared, for example, to the 562,600 in Germany or the 710,000 in Russia just prior to the two biggest revolutionary upheavals ever experienced in Europe). Industrial workers in the United States in 1990 accounted for almost half of those in single work locations of 1,000 or more employees, even though they are only 29% of total production worker employment. (Department of Commerce: 572)

Incorporation of “Infrastructure”

The rise of smaller, single plant firms since the 1970s was one piece of the evidence that flexible specialization was the wave of the future. As it turns out, however, the phenomenon of the small, flexible firm is only a piece of the larger picture of lean production.

A central feature of this now-universalizing production strategy is a high level of out-sourcing and subcontracting. What has become clear, however, is that this is not some new era of small- scale, innovative entrepreneurialism. As Bennett Harrison has shown in “Lean and Mean,” the disaggregation of production through out-sourcing is not about the rise of small business.

Harrison sees the growth of “decentralized activity with concentrated control over resources.” He argues that the proliferation of small firms is the creation of the same giant multinational corporations that dominate world production:

Rather than dwindling away, concentrated economic power is changing its shape, as the big firms create all manner of networks, alliances, short- and long-term financial and technology deals-with one another, with governments at all levels, and with legions of generally (although not invariably) smaller firms who act as their suppliers and subcontractors. (Harrison: 8-12)

In other words, even where the workers in these supplier and contractor firms fall outside the technical limits of concentration and centralization, they are brought into the same lean production system as the employees of the corporate giants who dominate it.

Internationalized lean production with its modified just-in-time links in the production chain are heavily dependent on the means of transportation and telecommunications, as well as on the infrastructure that supports them. This is one reason why telecommunications operations, port authorities, airports, railroads and even highways have increasingly become the object of privatization where they are state-owned.

These traditionally independent “services” have become as much a part of competing systems of lean production as the assembly lines they terminate in. They are both costs and capital inputs in the production process itself, to a far greater degree than in either the vertically integrated mass production or market-based “commodity-chain” systems of the past. Hence, even though still largely employed by independent capitals or even by the state, workers in such industries must be regarded as part of today’s contemporary industrial working class.

To summarize, the industrial working class is numerically and proportionately larger than is generally assumed. At the same time, it remains more concentrated than any other sector of the class, with manufacturing workers still being the most concentrated. For example, 70% of the manufacturing workforce is employed by the 1% of firms that employ 500 or more workers. In the private sector as a whole only 41 % work for companies of this size. (Harrison: 47)

Furthermore, compared to thirty or forty years ago (the hey-days of U.S. unionism), more of the companies for which they work own more assets and employ more workers. In this respect, the concentration of workers in Marx’s sense remains a central feature of industrial working class life.

The Basis of Industrial Workers’ Power

As important as the relative concentration of industrial workers is to trade union organization, their long-term strategic position in the accumulation process is even more so for the purposes of revolutionary theory and practice.

Viewed in terms of the economy as a whole, the proportion of real Gross Domestic Product produced by this declining number of industrial workers actually grew from 42.61% in 1960 to 44% in 1989. (Council of Economic Advisors: 274-289) This is due largely to the higher productivity rates of the industrial workforce. This, in turn, reflects the increased concentrations of capital that these industrial workers put into motion. Thus, real assets per manufacturing worker grew from $9,300 in 1963 to $26,040 in 1987.

Perhaps even more important is that this portion of national output is, quite literally, the “foundation” of almost all other economic activity-in the sense that it is the industrial working class that produces (and often runs) the entire infrastructure and “built environment” on which both accumulation and daily life rest: roads, ports, airports, railroads, factories, office buildings, streets, public transit, housing, etc.

It is also the sector that produces capital in all its physical forms. Wholesale and retail trade, finances, overseas trade and many services in the sphere of circulation grow on this productive foundation, providing what employment growth the system still maintains.

Actual services such as education and health care also rest on the foundation of production as part of the general process of class reproduction. In the latter case, the trend is to commodity these services and emulate industrial methods of organization and delivery.

In other words, the industrial working class has a potential power no other social grouping, within or outside the working class, has. It is only a potential power, waiting to be organized and exercised. But it is this fundamental relationship to all economic activity that gives the industrial working class its central role as “gravedigger” of the old society and organizer of the new.

From Potential to Organization

As Marx noted in the “Manifesto”, “This organization of the proletarians into a class, and consequently into a political party, is continually being upset again by the competition between the workers themselves.” (Feuer: 16) This has a contemporary enough ring, but Marx went even more into “modern labor relations” a decade later when he wrote, “the competition among the workers is only another form of the competition among capitals.” (Marx, 1973: 651)

Modern labor reformism, business unionism and labor-management cooperation are some of the major “official” ideological expressions of this competition and fragmentation within the workers’ movement. Racism and sexism, of course, have their unofficial place in this rogues gallery of divisive ideologies that infect the working class. Whatever their separate origins, these ideologies are persistent because they are materially rooted, among other places, in this “competition among capitals.” Current labor-management cooperation ideologies, of course, attempt to incorporate this “competition among capitals” into the official union program.

Today, the “competition between the workers themselves” is driven by the threat or reality of plant closings, downsizing, declining job opportunities, whipsawing, and the growing reign of “cooperation” that pits workers against one another. It is augmented by the large size of the reserve army of labor, where it takes on an even greater racial and gender dimension. It has a paralyzing and demoralizing effect further compounded by the collaboration of most of the union bureaucracy in the process itself.

I would argue that this competition is the major reason for trade union retreat and paralysis-far more important than the relative decline in workplace employment size or even geographic dispersion, neither of which have precluded unionization, militancy or political radicalization in the past.

The only solution Marx, or anyone else I’m aware of, proposed for the competition among workers was/is organization. Only organization can “take labor out of competition”—not Marx’s phrase, but essentially that he argues. Whether this is accomplished through “collective bargaining,” political action, or the revolutionary conquest of power, organization is essential.

Only organization represents a step toward the formation of a class “for itself.” Concentration was never in itself a solution since the concentrated capitals also competed and shed workers—more ruthlessly as their size grew. It only provided a setting that the countryside and isolated small-scale production had not provided for creating organization.

Trade unions, educational societies, political associations (e.g. Chartism), mutual aid societies and political parties were among the web of organizations that moved the 19th century proletariat in the regions of advanced capitalism toward becoming a class-an organized, conscious social formation. The process, however, was again and again thwarted by the paralyzing affects of competition, crisis and restructuring.

The ability to turn potential power into real power is largely a question of organization and consciousness. Over and over, older forms of both workplace (i.e. craft control) and industrial organization were destroyed and new forms of organization, usually broader or deeper in reach (like shop stewards councils), were needed to overcome persistent competition.

Although the decline of unionism has reached crisis proportions in the private sector, the industrial working class remains better organized than any other group of workers in the private sector, where the brunt of competition is sharpest. The unionization rate for manufacturing workers was 20% in 1992, for transportation 31 %, communications and energy workers 33%; not all that far behind public sector workers in their level of unionization, and way ahead of workers in trade (6.6%) or services (5%). If we consider only production and nonsupervisory workers, then the industrial working class as a whole is almost one-third organized.

Contrary to what is often written on the left about industrial workers, the level of representation of workers of color among them is slightly higher than in the workforce as a whole: Blacks are 11% in the industrial workforce vs. 10% overall, and Latinos are 8% vs. 7.6%. Although unions are as riddled with racism as any American institution, they are also among the most multi-cultural organizations in the United States. Indeed workers of color tend to be more favorable toward unions, a fact that will be extremely important as new organization begins to emerge.

While women have been underrepresented in the industrial workforce (27% compared to 45.7% in the total private workforce), they have grown somewhat as a proportion: from 26% in manufacturing in 1960 to 33% in 1992 and from 23% of the entire industrial workforce to 27% in the same period.

The low overall rate of representation is largely a function of the consistently low numbers of women in construction, transportation (except airlines) and energy production.  In some sectors, however, women compose a key element of the workforce, with the proportion near the overall average: 40% in airlines; 41% in non-durable manufacturing; and 45% in communications.

Overall, by 1992, white males composed only a slight majority (51%) of the industrial workforce compared to two-thirds thirty years earlier. (Department of Labor, 1979,1994) The demographics of the industrial working class have become more like those of the rest of the class.

Today, in much of the industrialized and semi-industrialized world, many active workers are groping for new kinds of organizations or trying to change old ones to meet the present challenges posed by capital in its most international transformation to date. Not only is the U.S. model of business unionism-plus-pressure politics inadequate to the period, so is the trade unions plus-party (good or bad) formula of European social democracy. The search for organization appropriate to this phase of capitalism is a global conversation.

The importance of union reform activity in the major unions of industrial workers flows from the continued centrality of these workers to the system. If they remain disorganized and unorganized, radicalization will remain a distant hope. But we not only need democratic unionism and a new working class party backed by the industrial working class-we need an overall strategy for the class as a whole, a proliferation of mass organizations of various kinds.

The workers’ centers are a hopeful sign of stirring in the newer and more fragmented sections of the class. Cross-union formations like Jobs with Justice represent another dimension, as do the new efforts at cross-border organizing and international solidarity.

For more inspiration in this global conversation we can look to Latin America (above all Brazil) and South Africa. It is not only their militant industrial unions that are important, or even the Workers’ Party, but the unions of dispersed/casualized workers (e.g. Amazon rubber tappers), the many community-based mass organizations, the ‘civics’ in South Africa, the mass women’s organizations-all of which see themselves as a piece of the puzzle of working class power.

It should be obvious that these kinds of working class-organizations—and that is just what they are—are relevant to our own increasingly fragmented, casualized workforce. Together with the unions of private and public sector workers, and political parties all workers can, share, these organizations can compose a new workers movement to resist a new capitalist order and bring about its eventual abolition.

NOTE: Statistical notes and references in print edition only.

ATC 58, September-October 1995