Innovation and technology raises profits, not workers' living standards

By Richard Mellor

Afscme Local 444, retired

I often wonder about the changing nature of our places of work.  I remember in the late 1980’s when the Team Concept began to appear much more frequently in my workplace.  There were all these internal studies that aimed to increase productivity, get more work out of the same amount of people; the bosses hate a commodity they paid for not being used to the fullest, whether it’s a backhoe or human labor power. The bosses wanted to set up all sorts of management /labor type deals to facilitate this.  Workers know a lot about work and the boss taps in to that knowledge to increase productivity. In my personal opinion, creating this more competitive culture based on the need to compete with the outside and increase productivity led to a very serious accident to a co-worker.  The management owns the workplace and is responsible for the conditions in it. The only counter to this is the power of organized workers.

I noticed the same in the private sector, particularly retail where workers were now wearing identification labels as “Associates” or “Team members”.  During the 1980’s our wages in the public sector, at least, in my sector of it which was a water district in Northern California, were rising faster than the private sector workforce but here too, studies were talking about needing to change the adversarial “culture” of the workplace, in other words, the workers must cooperate in undermining their own living standards, we must have harmony. We all want harmony but on whose terms?

But all this rage about productivity doesn’t really do workers much good. The bosses always claim that this benefit or social need is lacking because of the difficult economic times. The “times” are always difficult for them when it comes to wages, benefits and providing social services.

The productive power of labor is staggering though. BusinessWeek reported at the start of the 1990’s that between 1980 and 1992 when I was still very active in my union, steel companies reduced the man hours necessary for the production of a ton of steel from 9.2 to 5. (1) During the same period, US manufacturers slashed 4 million jobs and were employing roughly the same number of production workers as they did in 1946 but these workers were producing approximately 5 times as many goods.  During the same period corporate profits increased 166%, consumer prices by 75% and executive pay 514%. The real tech boom of the 1990’s followed which also gave capitalism some breathing room. Alongside this were the numerous strikes that followed on the heels of the PATCO defeat, an attempt to fight back.  These too were defeated with the help of the trade union hierarchy.  Go check the wages in  meatpacking after the defeat of the P9 strike at Hormel.

These production advances are staggering figures when you think about it. They would allow for a hugely reduced workweek were the productivity gains of the labor process used to benefit those who do productive work. Instead, they have helped the 1% maintain some semblance of profitability in a competitive global marketplace.

So today, fewer people make more things. Productivity gains through technology and increased exploitation of the worker have been made all the easier by the right wing trade union bureaucracy’s embrace of the market and capitalism.  Manufacturing accounted for 28% of US GDP in 1953, 20% in 1980 and 12% in 2012 according to the US Bureau of Economic Analysis. Their research also shows that the number of workers in manufacturing went from 16 million in 1953 (about a third of non-farm employment) to 19 million in 1980 (about a fifth) and 12 million in 2012 or about one tenth of the US non-farm workforce. Here in the US we see an increase in non-productive personnel in the workplaces. As Business Week points out, “More than half of all people still employed in US manufacturing sector work in such services as management, technical support and sales. More and more, workers have overseers, company men and other non-productive personnel whose job it is to ensure the collective spirit and unions are undermined and those whose labor power is the source of surplus value are kept in check.

 (2)

As manufacturing share of GDP declined, also driven by exporting production to more favorable locales where a human being can be found for as little as $3 a day, the growth of the financial sector rose drastically.  After all, putting a factory on the ground is a long-term investment, tying up capital that might find more favorable results elsewhere, especially in a more liquid environment. Martin Wolf writing in the Financial Times right after the crash pointed out that, “According to the McKinsey Global Institute, the ratio of global financial assets to annual world output has soared from 109 per cent in 1980 to 316 per cent in 2005. In 2005, the global stock of core financial assets had reached $140,000bn.” (Financial Times 6-18-08)

The finance industry is not so much a creator of wealth but a distributor of it as I see it.

I can’t help mulling over these advances in the production process, that the time to produce a ton of steel was cut in half, or even what e mail has done in the transfer of documents from one part of the world to another.  What must the shipping container have done for productivity and profits? In the book, The Box the author describes the development of the shipping container and how it changed the world. He claimed that one of the first container trips from New Jersey to Houston in 1956 lowered the cost of transporting the cargo by 97%, from $5.83 a ton to 15.8 cents a ton.

These two changes, the time to produce a ton of steel and the shipping container give us an example of how society could easily lower the workweek to 30 hours with no loss in pay.  From 1980 to 2012 taking the US economy as a whole, output per hour worked increased 85% and for manufacturing an astounding 189%. Workers feel this in real terms, less time off, faster pace, fewer benefits, more sickness and stress, weakened unions. The problem is that we don’t own the machinery, the technology, nor the products we make or the labor process itself. So amid these incredible improvements in the productive forces, the inequality gap widens, workers get poorer and the rich get richer to the point where we now have the world’s richest 85 people having as much wealth as 3.5 billion of us.  The social consequences of such disparity worries the 1% to such a point that inequality was on the table at their meeting in Davos.

The global trade agreements like NAFTA which cost US jobs and drove millions of Mexican subsistence farmers from the land are all part of this drive for profits, workers here and in Mexico suffered from that agreement. The one now being discussed is the Trans Pacific Partnership.  We only have to read what the Financial Times says of the agreement to know that it is not good for workers in the US or throughout the world; this paper of the 1% writes: “Corporate lobbyists, who have been pushing for a quick and uncontroversial approval of TPA, say they are still confident the talks will be successful.”

Globalization has allowed US capitalists to find human beings for as little as $3.00 a day another attempt to keep profits at a sustainable level.  We see the conditions that exist in the factories of Bangladesh and Cambodia, the sexual violence and rape as well as child labor.  This environment is supported and encouraged by the heads of the giant corporations and politicians like Obama and other representatives of the 1%, their crocodile tears shed when a catastrophe breaks out are phony.

So when I read of examples in the power of the productive forces it confirms Marx’s view that in the capitalist mode of production we die mind plenty, we get sick despite the means to cure us being present, we starve as farmers are paid not to produce food.

I met a couple of young women on the trail the other day. They were 18 years old and worked in café’s.  They were being paid minimum wage and we talked a lot about life. They were very interested in the world around them although many Americans due to the extremely limited and censored mass media know little about what is going on. They were refreshing to me.  But one of them told me something I’ve heard many times from young women especially, she said that did not want to bring a child in to this world.

For us as American workers we must build links internationally, from Bangladesh to Cambodia, to Venezuela and Argentina and from South Africa, where 34 miners were shot by the state in league with the mine owners, the ANC and sections of COSATU. We must not fall prey to joining with our own bosses in competition with brothers and sisters around the world as to which of us will have a job, feed our kids or a secure and productive future. We will not have a future without uniting the working class internationally.

As such a movement arises it must inevitably lead to the question of who controls society and who controls the workplace.  When we take those two simple examples above of how innovation and technology increased our ability to produce society’s needs we must discard this nonsense that society can’t end poverty, that working hours must go up rather than down or that the retirement age must do the same.  It doesn’t take rocket science to figure out that if you reduce the time to produce something by half we could work fewer hours and employ more people. The extra leisure time can be used for those who work to participate in the management of production and the labor process.

The world is in the state its in because of conscious decisions made by a minority of the world’s population.  God has nothing to do with it, nor the devil, this view is propagated to confuse us, render us harmless victims.

There is no mystery.  The means of producing society’s needs and what those needs should be beyond food and shelter and the obvious, and capitalism cannot provide even these basics for the majority of humanity, are in the hands of this global minority. 

The productive forces must be liberated from the rotten clique that owns them: Society need new managers.

(1)           Business Week: Re-inventing America 1992

(2)           BusinessWeek, 1-27-14