US economic crisis brings historic shift and paves the ways for battles ahead. We can win this war.

The figures are out. The “numbers are starting to show” says the Wall Street Journal today. “To an extent rarely seen in recessions” wages for a huge section of the population, “have taken a sharp and swift fall”. * This is not something we don’t already know. We all have relatives, friends or neighbors that are either unemployed, have been unemployed in the last period, or who have lost their homes or are in the process of losing them.

Of full-time workers that lost jobs they had been in for at least three years and found new ones by the end of 2010, 36% reported a 20% pay cut. As this blog has pointed out during the course of the present economic crisis, it is one of historical significance. The massive accumulated debt that allows capitalism to go beyond its limits is still present and overcapacity/overproduction is rampant throughout industry. Globalization and the increased competition for markets, especially through the rise of China, has changed the relations between the great powers and is forcing the US to put its workers and the middle class on rations. The US capitalist class is forced to dismantle the social services and gains in living standards that have been won since the 1930’s.

“It will be years, if ever, before many their wages return to pre-recession levels.” Says Till von Wachter, an economist at Columbia. The employers’ are quite pleased, “Right now I view this as an employer’s market.” Says one. Indeed it is. Labor power is a commodity and like all commodities subject to the laws of supply and demand. With 30 million or so workers out of work or underemployed, the price of Labor power declines and the conditions under which it is used in the workplace deteriorates. Increased competition between workers increases the level of economic and workplace terrorism that the capitalist class can inflict on society. “Lower wages can make US industries and companies overall more competitive” says the Journal. Yes they can, and it is this that it the crux of the issue.

If we accept the laws of capitalism, the laws of the market and free and unbridled competition, we can only go down. The material conditions that laid the basis for the “American Dream” are no longer present never to return. And it was only a "dream" for a section of US society.  During this dream period, a huge section of the US working class, black people in the south, were living under a system of Apartheid.

The Journal gives a few examples of what this situation means in real terms like the man with two MBA’s from Wisconsin who was laid off after working for engine manufacturer Briggs and Stratton for 26 years. After applying for more than 1000 jobs he now works for Starbucks where he used to get his coffee on the way to work, his pay cut in half. “Am I prepared to stay where I am? Yes, if that’s where god has me”, he says. Why god would give him a job at all and not millions of others boggles the mind. This type of thinking is encouraged by the bosses as it serves their interests. It is selfish and individualistic really and workers should reject it.

“When it comes down to it, they want to offer us peanuts to work” says one 63-year old woman who had to cash out half her retirement to survive and who had never been unemployed before. We are taught that there are no classes in America. But who are the “they” that this woman refers to then? We know who they are you see?

Another woman from California after being laid of from NUMMI, the Toyota/GM plant that closed last year has given up her dream of opening a small business, “I do want to make more money” she says, “The only way I can get back to that is if I go back to college and get more of an education”.

This has been drummed in to the heads of American workers for years and it worked for a while for some. But California governor, Jerry Brown’s budget proposals released yesterday make such an escape from poverty even more difficult. Lower wages and higher cost of education is not the best combination to escape poverty; doors are closing rapidly.

In California another day of actions and strikes has been planned for March 2nd as students throughout the state fight back against the savage cuts in education. Some Unions will endorse this as long as it’s the students doing it but the potential power of the two million workers affiliated to the California Labor Federation will remain untapped as the Union officials continue their collaboration with bosses and their attacks on workers and youth. The Union hierarchy is a willing partner in the capitalist offensive against working people and those local leaders who claim to oppose them have to wage an open campaign among the rank and file of Labor against their disastrous policies.

There is no way out but to fight. Not an education, not starting your own business, not the lottery. In our Unions we must build opposition caucuses that oppose and openly challenge the concessionary policies of the Union hierarchy. We can link these to the student movement join their struggle for a future. We can build community committees and return to the mass direct action methods of the past that brought us what we have today and link them to the students struggle and the fightback in the workplace.

No one likes a fight; we all want a peaceful life. But history shows that to get a peaceful life you have to fight a few wars.

* Downturn's Ugly Trademark: Steep, Lasting Drop in Wages WSJ 1-11-11