Happy May 1. What a time to celebrate international workers’ day.
In honor of the day, I figured I’d continue a wonky project focusing on some numbers for the labor movement. I learned a couple things that could have implications for the labor movement from the newest episode of the historically-informed, persnickety, and libertarian finance podcast Grant's Interest Observer podcast.
Relations of production
First, they give us an insight into the dominant mode of production in the US. There’s a sense among these people who follow finance very closely that the relations of production in the 'first world' countries have shifted to service.
Remember relations of production? They’re the ways that people have their hands on the means of production, how people mobilize the means of production, how we relate to one another and the world around us to make material life together.
The marxist theory says an ‘economy’ is a set of modes of production, with one that is dominant. A mode of production has relations of production that mobilize means of production.
Capitalism’s relations of production are relations of exploitation because capitalists exploit labor to generate surplus value and create more capital. Socialism, one would hope, has different relations of production.
Relations of production are what socialists should want to change. We want to go from relations of exploitation to relations of cooperation (for example).
Have the relations of production shifted?
We can look at the current numbers of manufacturing jobs in the country. It’s not high, but it’s far from zero. We’re currently at 12.8 million persons employed in manufacturing. That’s down from a high of 19.4 million in 1979 and a not-too-much-lower 17.1 million in 2000.
The Economic Policy Institute actually says this is a pretty big footprint at 8.8% of the workforce. Yet there are almost as many food service employees working as there are manufacturing jobs, at 11.8 million workers.
While the manufacturing graph goes down, the eds and meds, professional services, and food service graphs all go up.
I should note that a shift to a service economy in the mode of production doesn’t mean a shift in the relations of exploitation exactly. They’re still exploitative, but the means of production they’re trained on now are so different as to change their character (I think, open to debate this one!).
Anyway, this shift to service/information militates against the view that there's much material possibility of 'bringing industry back to the America', a talking point so popular in the rightwing discourse.
To put a finer point on it, in the pandemic recession, there's not going to be a lot of money to revamp, open up, or build new industrial capability. Existing industry might even have to downsize because:
In the pandemic, there's a big threat of bankruptcy among medium and small firms. Even assuming a V-shaped recovery after contraction in Q2, Citigroup noted that there will be a 10% default rate in high yield bonds.
A big proportion of firms are 'over-levered,' meaning that they've issued a lot of bonds to finance themselves. They have a lot of loans. And with a contracting economy there isn’t going to be a way to pay them back. They also don't have big rainy day funds due to the low-interest rates in the last ten years.
This isn't exactly news either, since I’ve seen economists worried about heavily indebted small and medium-sized firms that aren't huge.
Yet at the same time, what happens might not end up looking exactly like bankruptcy: these firms might just not hire as many people back, they might get acquired by the bigger firms and we'll see further monopolization/consolidation among them.
Though ultimately this emboldens the big firms with big savings, puts the working class (and frankly the professional managerial class and the petty bourgeoisie) at their mercy even more.
Capital’s greatest friend right now is the Federal Reserve, yet again. Yesterday they increased the power and capacity of their Main Street Lending Facility, making new loans available and protecting lenders.
Implications for labor organizing
Every couple months there’s another big call on the left to ‘rebuild the labor movement’. What would it mean for an economy composed of a mix of eds and meds, service, and decreasing manufacturing to have an organized labor movement after the pandemic? What would it mean to organize and mobilize that working class for political purposes, and possibly shift the relations of production?
I’m wondering what the implications for a labor strategy are here, among socialists in particular. I can’t speak to this since it’s not my expertise at all—any readers out there have good things to read about it?