Biden rides the brakes on labor’s upsurge

The explosion of labor union activity has struck fear in the heart of the establishment. Now big money and their politicians in both parties are flexing coordinated muscle to crush the upsurge.

The news-grabbing strikes last year — John Deere, Kellogg’s, Nabisco — have since been eclipsed by the sheer numbers of striking workers in 2022: 78,000 through June compared to last year’s 26,500.

The momentum doesn’t seem to be stopping, according to the Guardian:

“Thousands of workers around the US are going on strike or threatening to do so heading into October, amid a recent surge of labor action activity in America and just one month before crucial midterm elections.”

The labor movement has been helped by the COVID-19-created, short supply of workers that has driven up both wages and worker confidence. This labor market gave critical assistance to the Starbucks and Amazon worker organizing, whose outcome could shape the future of low-wage workers.

Educators have also benefited: recent strikes in Seattle, WA and Columbus, OH continue the years-long rolling strike wave of U.S. educators, while huge nurse strikes in Minnesota and Massachusetts — with more on the horizon — signal the U.S. healthcare workforce’s post-COVID-19 awakening.

The recently-averted national rail worker strike—the ramifications of which terrified the government—could still occur if workers reject the agreement brokered by Biden and their union leaders.

Another factor leading to increased union struggles is the high inflation eating into the real wages of workers. Thus, even the most passive union leaders are pressured to fight the boss for a larger cost of living adjustments (COLA) when inflation strikes.

The Biden Administration and the Federal Reserve now have clear goals to stop this. A tight labor market is great for workers but horrible for employers, since they’re forced to pay higher wages and can lose power in the workplace.

This is a key reason why the Federal Reserve is pushing the economy into recession. Fed Chairman Jerome Powell has repeatedly stated his goal is to fix the “overheated labor market,” a remedy that has massive repercussions for the labor movement and broader society.

It’s in this context of rising worker struggle and imminent recession that unions must view the actions of President Biden. In the increasingly-tense battle between labor and corporate power, the Democrats are tipping the scales in favor of the billionaires, while creating the conditions for a Reagan-like assault on the labor movement.

What Biden does for Amazon and Starbucks

The Starbucks and Amazon union campaigns are important examples of the new power flowing into the labor movement, where many rank-and-file-driven unions are springing up across the country. These two union campaigns also serve as important examples of the Democrat’s actual attitude towards labor at a key moment for the movement.

Both companies have been ruthless towards their workers, treating the new unions as an existential threat to their business model that relies on low wages and high turnover. Starbucks Workers United claims that in recent months more than 85 workers have been fired for organizing, while 548 allegations of labor law violations have been reported.

The attempted anti-union bloodbath has been mostly ignored by Biden and the Democrats. Amazon’s gory stats are less gruesome only because Starbucks workers have been more successful nationally.

Amazon and Starbucks’ union-busting efforts have been egregious and the National Labor Relations Board (NLRB) has issued rulings against both. Yet the companies continue their anti-union head-chopping undisturbed. The NLRB’s response has given the workers the protection an umbrella gives to a bombing raid.

The NLRB has been chronically underfunded for decades and its policies degraded further under Trump. Unions hoped Biden would fix this—at a minimum to buttress the NLRB in processing and administering new organizing efforts – yet his weak promise to increase funding by only ten percent went unfulfilled (Democrats gave zero additional funding). And while many labor leaders applauded wildly when Biden appointed some pro-union people to the NLRB, it matters little what captain is steering a row boat during a hurricane.

In practice the NLRB has benefitted the employers more than the unions during the upsurge, since the public is given the illusion that a “fair process” is happening while the company’s countless illegal actions take months to investigate (if they’re reported), giving the employer all the time they need to terrify the workplace into submission, while the NLRB “penalties” barely serve to dissuade the union-busting.

Another key example of the work of the NLRB under Biden is their sending a powerful, pro-employer message in the recent decision to fine the United Mine Workers $13.3 million in “damages” to employer Warrior Met Coal, to offset the costs the company had to endure because of the strike.  [This amount was subsequently revised downward by the NLRB-Eds.] Such a decision is meant to prevent other unions from striking at a moment when the economy is entering a recession.

The union President Cecil Roberts made the correct conclusion when he denounced the NLRB’s judgment: “What is the purpose of a strike if not to impact the operations of the employer? This is outrageous and effectively negates workers’ right to strike.” Democrats predictably had nothing to say on the matter.

Aside from watching the NLRB compile a list of illegal actions taken by companies, what has Biden done for the union upsurge? He was applauded for defending the rights of Amazon workers to organize—which was read as sending a pro-union message to warehouse workers in Bessemer, Alabama—and for receiving Christian Smalls at the White House after the election victory of the Amazon Labor Union in New York. Reagan too was good at pro-union rhetoric, notably proclaiming “I happen to be the only president of a union ever to be a candidate for President of the United States.”

But when Smalls asked Biden for more than kind words—requesting he issue an Executive Order banning Amazon from receiving federal contracts—the President demurred.

While Biden and some Democrats are happy to offer the occasional pro-union Tweet or speech, Amazon, in particular, received a far more valuable gift—fat government subsidies and contracts. More importantly, they get impunity during a national organizing drive, whose outcome will affect labor relations nationally.

Biden has said nothing about the blatantly illegal actions of either corporation, offering them much political space for anti-union activity, which is priceless for Howard Shultz and Jeff Bezos, the latter who certainly feels his $100 million donation to the Obama Foundation has paid off handsomely.

Not only does Bezos get a free hand to strangle unions, but in the middle of his anti-union crime spree, Biden showed his approval by awarding Amazon a $10 billion  NSA contract. This action, above all, was certainly interpreted by Bezos as a sign that his union maiming would not be punished, but rewarded.

In fact, neither company will receive any harsh penalty for their dozens of labor law violations. When you consider the broader upsurge of union activity, Biden’s actions—and especially inactions—have helped cultivate an anti-union atmosphere at a critical time.

Biden’s PATCO moment?

Every company in the nation is watching the anti-union actions at Amazon, Starbucks, and a number of other companies. The lack of any real penalties—whether from the NLRB, Biden, or Congress—will be interpreted by other companies as a green light to do likewise, since the government is obviously on the side of the corporations. This dynamic grows in importance as the economy slides into recession and the union upsurge expands.

This moment is thus similar to the anti-union feeding frenzy that Reagan conjured while crushing the PATCO (air traffic controllers) union: in a time of recession, corporations saw that the government was anti-union and thus labor laws were less likely to be enforced, encouraging the kind of union busting that employers had long wanted.

And now at a time of worker militancy, inflation (whose roots this time are not in wage growth), and sluggish profits, a new employer counter-offensive is required, though against both a substantially weakened “official” movement and a growing wave of rank-and-file led independent unions.

Comparing Biden to Reagan may seem like a stretch, though most Democrats have already accepted Reaganism/neoliberalism as their economic model (Obama spoke admiringly of Reagan on several occasions). Reagan also liked to talk about his love for unions, even at the moment he was announcing his attack on PATCO (which itself had endorsed his election in 1980!).

It took several years for most unions to understand the full consequences of Reagan’s actions, which inspired corporations nationally to take a much more aggressive stance towards labor. Capitalism was shifting into its neoliberal stage while many union leaders sat dumbfounded.

Likewise, If the current worker upsurge continues while the Federal Reserve follows its Reagan-era precedent, Biden’s role-playing of Reagan will intensify, perhaps after the midterm elections. The enormity of the economic crisis will certainly have corporations making heavy demands on him (for example Biden’s slow-walking of student loan forgiveness).

A key example of Biden’s Reagan-like tendencies is the railroad union crisis. Union leaders naively thought that Biden would help them after contract negotiations stalled, so they requested Biden use a Presidential Emergency Board to help arbitrate. But Biden’s board was decisively in the corporation’s favor, which pushed the railroads to the precipice of a national strike.

Days before the strike Biden intervened again, resulting in a tentative agreement that appears only slightly better than the previous pro-company deal Biden initially brokered. If the unions reject the new agreement — a real possibility — a strike may still happen, where Biden’s PATCO moment may become explicit. Congressional Democrats have already announced their plans to crush a possible railroad strike. Bloomberg reports:

“Congress intends to intervene to prevent a national rail strike and unilaterally impose a concessions contract, Steny Hoyer, the second highest ranking Democrat in the House of Representatives, told Bloomberg News on Monday.”

Notably, the last rail strike in 1992 was also crushed by a bi-partisan consensus, where the House voted 400-5 to halt the strike that helped the corporations create today’s deplorable conditions.

Biden’s Fed strikes back

Perhaps the ultimate example of Biden’s anti-worker strategy is the Federal Reserve, which is consciously pushing the economy into recession to target the union upsurge by shifting the economic terrain under labor’s feet.

The current Fed Chairman, Jerome Powell, was called by Bloomberg magazine “Wall Street’s Head of State,” which was why Trump nominated Powell for the job, and why President Obama initially drafted Powell into the Federal Reserve system. But Biden’s reasons for re-nominating Powell, in May 2022, are worth examining.

Before his re-nomination in May, Powell had already made numerous speeches about his plans for the Fed. Powell had been citing Reagan’s infamous Fed Chairman, Paul Volker, as an inspiration for the current moment. Volker famously “shocked” the economy by intentionally causing a deep recession, which Reagan then used to crush unions and drive down wages. As Volker famously said while executing his plan “Americans must accept a reduction in their living standards.”

Knowing that he needed to be re-nominated by Biden and confirmed by the Senate, Powell was essentially campaigning for the job, putting forward his anti-union platform as a cure to the inflation crisis. Biden and the Democrats thus signed off on this strategy, as Powell was overwhelmingly approved by the Senate after Biden nominated him. The “left” Democrats had very little to say about this.

Powell’s speeches display an obsession with wages, never failing to hyper-focus on the need to drive up unemployment to “fix” the pro-worker “overheated labor market,” since wages are simply too high.

Recently Powell spoke to the CATO institute, a libertarian think tank, and repeated his anti-labor mantra:

“Demand is very very strong in the labor market…wages are running at elevated levels, so we think by our [Fed] policy interventions [raising interest rates] what we hope to achieve is a period of growth below trend, which will cause the labor market to get back into better balance, and that will bring wages back down to levels consistent of 2% inflation, that’s what we’re trying to achieve.”

Powell has said several times that a sign that his strategy is working would be if unemployment rises, which he has suggested would be a key indicator to show his plan is working.

Powell knows that wages have lagged behind inflation, and thus can’t be its cause. The Fed is intentionally triggering a recession in order to raise unemployment to create what Marx called “a reserve army of labor” that puts downward pressure on wages, since more workers are chasing fewer jobs.

The Fed is also addressing one of twenty-first century capitalism’s structural problems, a “demographic drought” of workers that accelerated with the pandemic, where fewer workers are entering the workplace than retiring because of shrinking birthrates, helping tighten an already-taut labor market exacerbated by the over 1.1 million excess pandemic deaths in the U.S. The demographic drought could be considered a structural crisis of modern U.S. capitalism, since it implies a permanently tight labor market in a system where profits flourish under loose labor conditions. Elon Musk stunned many when he said “Population collapse [due to low birth rates] is the biggest threat to civilization” to which Chinese billionaire Jack Ma responded immediately “I absolutely agree with that.” Billionaires are well aware of the origins of their wealth.

And the Fed is here to help them. One of the Fed’s central jobs is to obsess over issues that might impact the labor market, including “trends” in union organizing that have the ability to impact regional sectors of the economy. Paul Volcker famously tracked closely union contract negotiations of large corporations, knowing that the impact would spill over to neighboring workplaces.

Biden’s endorsement of Powell’s strategy — and his continued silence as it’s executed — is itself a powerful signal to the corporate elite that another Reagan moment is well on its way, since Powell’s strategy is rooted in the recognition that there is a deep economic crisis that requires extraordinary action.

There is very little opposition among the bi-partisan establishment, few of which are warning about the economic wreckage in the very near future, thus ensuring that the broader public will experience the recession as a shock and awe campaign that requires “emergency,” pro-employer actions.

Few labor leaders have digested the moment, and while many surely understand what is happening virtually none are discussing it publicly. The forward-thinking Fed has thus had little opposition thanks to a backward-looking labor movement, whose rank-and-file have been tasked with pushing unions into a fighter’s stance.

Will Labor rise to the challenge?

It’s too early to tell how big the developing recession will be, though some big bankers like JP Morgan Chase CEO Jamie Diamond are using catastrophic rhetoric. The stock market has already begun its trek downward, at the cost of people’s retirement savings and eventually, pension funds.

The recession will not only create a much more difficult climate for new or existing organizing campaigns—by tilting the labor market in favor of the employers—but also put enormous pressure on longstanding unions as revenues shrink. The many public sector unions who survived Reagan’s onslaught will be targeted, on a bipartisan basis at all levels of government, to deal with the budget deficits the recession creates.

The significance of the moment is already exposing the incompetence of many labor leaders, who are doing their best to pretend that nothing is happening. Labor author-organizer Jane McAlevey recently discussed the complete absence of national labor leadership in response to the worker uprising, calling their inaction “[a] failure to rise to the moment and actually meet the energy in the field and not just convert it into ‘we need two more senators in the Senate.’”

The inaction of unions is deeply connected to the labor leaders’ connection to the Democratic Party, which has long relied on crumbs from above instead of engaging with their own members or taking independent political initiatives.

But the crumbs have long ago dried up into stale rhetoric: every major pro-labor reform since President Jimmy Carter has been betrayed, a dynamic that has accelerated as inequality soared. Billionaires have completely replaced the formally-needed funds of unions inside the Democratic party.

Labor writer Kim Moody covers this dynamic masterfully as part of his important book “Breaking the Impasse.” One could argue convincingly that just three billionaires — Jeff Bezos, Howard Shultz, and Mark Zuckerberg — have more influence inside the Democratic Party than the combined efforts of existing unions.

The supermajority of labor leaders has failed miserably to adjust to the new reality, clinging to Biden’s rhetoric in a way that promotes illusions and, more importantly, prevents the mass action needed to push forward the urgent demands that all movements depend on. Only rank-and-file initiatives can plow through this moribund unionism.

Another barrier to progress lies atop the largest socialist organization in the U.S., the Democratic Socialists of America (DSA). Many leading figures in DSA loudly praise Biden’s pro-labor rhetoric while murmuring quietly about his betrayals. In this way, DSA provides cover for Biden, while he’s providing cover for Amazon and Starbucks. If one peruses the DSA website it would be difficult to find anything critical of Biden in particular and the Democrats in general.

Pro-Democrat ideas permeate the top layer of DSA, preventing the bottom layer from mobilizing at a critical hour. At a time of social crisis, the Democrats are steering the establishment’s ship largely unopposed by the Left, who again, has lost its mojo the moment a Democrat becomes President.

There is no easy fix to this dynamic, but the memberships of DSA and labor unions must begin discussions about political independence while taking immediate steps towards a recession action plan, along the lines of the “Enough is Enough” campaign that some unions started in Britain, who have organized mass actions to make demands specific to the moment.

DSA could help initiate a similar coalition campaign by inviting progressive unions — such as the Teamsters and Association of Flight Attendants — to co-convene an emergency conference to discuss initial measures to organize around.

Such a move could quickly cause a stir and push the broader labor movement into action. Inaction, however, could be catastrophic given the circumstances. If DSA can’t meet this moment it will be crushed by the weight of it, as working people look elsewhere – including to the right— for leadership.

Likewise, many unions face disaster by the recession if they don’t quickly realize the threat they’re facing, and join hands with other unions to take the kind of independent action that allows them to mobilize against Democrats and Republicans alike. Many labor leaders will not take such actions unless their membership is clamoring for it.

The Left has real solutions for this crisis that are being suffocated by a lack of mass action, itself the result of an unhealthy attachment to the Democrats. But the rise in workplace struggles offers an opening for a strategic course correction.

Featured Image Credit: Photo by Eric Haynes, the International Press Telecommunications Council; modified by Tempest.