Workers Vanguard No. 1040

21 February 2014


As Rulers Debate Minimum Wage Hike

Profits Soar, Workers Go Under

Fight, Don’t Starve! For a Workers’ America!

Six years after plunging the world into the worst economic crisis since the Great Depression, Wall Street is making out like the bandits they are. Corporate profits are breaking historical records as devastation continues to stalk the working class, black people, the poor, the sick, the young and the aged. Millions are unemployed, the army of part-time, temporary and casual labor is swelling and even many of those who have full-time jobs number among what are called the “working poor.” According to studies by the World Bank and other capitalist agencies, the U.S. now ranks worse than Nigeria on the scale of income inequality. “Low-wage America” has now become the buzzword for everyone from the White House and the bourgeois media to the reformist left.

There is nothing new or unique about the grinding poverty into which vast numbers of workers have been driven as wages on the whole continue to drop, continuing a trend that began in the 1970s. In Capital Vol. 1 (1867), Karl Marx explained the workings of the capitalist system of production for profit, in which the means of production are the property of the few who appropriate for themselves the wealth produced by the workers’ labor: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.”

The imperialist rulers reveled in the counterrevolutionary destruction of the former Soviet workers state as proof that Marxism is a “failed experiment.” But the landscape of the U.S. and other advanced as well as backward capitalist countries today is a stark snapshot of the increasing mass misery described by Marx.

Like the police chief in Casablanca who is “shocked, shocked” to find gambling going on in Rick’s gin joint, President Obama has now discovered “a dangerous and growing inequality” in America. Following up on the pledge made in his State of the Union address, on February 12 Obama signed an executive order raising the minimum wage of workers employed by federal contractors to $10.10 an hour. Despite all the fanfare, his pontification that “in the richest nation on earth, nobody who works full-time should have to live in poverty” rang less than hollow. Not only will just a few thousand workers be affected—and then only under new federal contracts—but even with this pay increase they will still be making poverty-level wages.

Peddling “friend of the little guy” snake oil is nothing new for the Democratic Party, which is no less a party of capitalist rule than the ravingly anti-labor Republicans. While Obama rarely played this card when bailing out the banks and auto bosses, the president currently finds this a useful ploy, particularly for reviving the Democrats’ fortunes in the November midterm elections. Although a good number of CEOs are determined to keep wages at rock bottom, not to mention the Tea Party troglodytes who decry raising the minimum wage as a new installment of “class warfare,” the demand for a higher minimum wage has support across a wide political spectrum.

For clerical reactionary Pat Buchanan, a higher minimum wage is the means to further slash social programs for the poor by allowing people to “provide for their living without assistance from the government.” The aim of cutting back government “handouts” is also cited by wealthy Silicon Valley entrepreneur Ron Unz in promoting a ballot initiative for California’s November elections to raise the state’s minimum wage to $12 an hour by 2016. Unz, who authored the 1998 California proposition banning bilingual education for immigrant youth, also wants to make “minimum wage jobs more attractive to ‘Americans’ and thus reduce the flow of immigrants entering the country illegally to take jobs no one else wants” (, 25 January).

For his part, liberal Seattle venture capitalist Nick Hanauer argues in a Bloomberg (19 June 2013) article titled “The Capitalist’s Case for a $15 Minimum Wage” that “the fundamental law of capitalism is that if workers have no money, businesses have no customers.” The fact that the vast majority of the population has little money to spend is a problem for the U.S. economy, which is overwhelmingly based on consumer spending. But the fundamental law of capitalism is hardly the adage, “a rising tide lifts all boats.” On the contrary: the fundamental drive is to sink wages so that the capitalist owners can increase their profits by seizing greater and greater proportions of the wealth produced by the workers. Correspondingly, the level of wages at any given time is determined by the relationship of forces between these two decisive classes of capitalist society.

Through mobilizing their collective power, workers can fight to wrest a greater share of the product from the capitalists, who seek to pay out just enough in wages to sustain the workers they exploit. But with the unions headed by a bureaucracy that promotes the profitability of American capitalism, labor struggle is at a nadir. The fruit of the labor misleaders’ class collaboration has been decades of broken strikes and busted unions, helping to drive down wages for the working class as a whole.

The Calculus of the Class Struggle

While the level of deprivation of the working class has been magnified recently, compounded by soaring costs in health care and higher education, the downhill slide in wages did not begin with the 2007-08 economic collapse but started in the early-mid 1970s. With its treasury drained by the long, losing war against the Vietnamese workers and peasants and its former economic dominance challenged by the rising industrial might of Germany and Japan, the U.S. ruling class launched a campaign to increase profitability through jacking up the exploitation of workers. Speedup, wage-slashing and the institution of “two-tier” wages and benefits for new hires increased the rate of exploitation. Auto, steel and other manufacturing production was moved from the heavily unionized Northeast and Midwest to low-wage plants in the “open shop” South and to neocolonies in Latin America and Asia.

Workers resisted by carrying out many hard-fought strikes. But these were overwhelmingly broken, in no small part thanks to sabotage by trade-union bureaucrats. As union after union went down in defeat, the U.S. rulers were encouraged to believe that they could get away with doing anything to the working class and the poor. Today, some of the more farsighted elements of the bourgeoisie are beginning to worry that continuing to drive people into ever greater misery could lead to a social explosion.

In “The Case for a Higher Minimum Wage” (8 February), the New York Times editorial board promotes the hike as “essential to a functional economy” as well as to restoring “public confidence” in American capitalism. Robert Reich, labor secretary under Bill Clinton, put it more baldly. In a column titled “Working Class Down—But Not for Long” (S.F. Chronicle, 7 February), Reich opines that “reform is less risky than revolution, but the longer we wait, the more likely it will be the latter.” As an alternative, this “let’s make a New Deal” liberal harks back to the days of Franklin Delano Roosevelt’s Democratic Party administration, which enacted the 1938 Fair Labor Standards Act establishing a federal minimum wage.

Like every gain the workers have ever made, this was won not through legislative lobbying or appeals to the “good conscience” of the exploiters but through class struggle. Fearing that the explosion of labor battles in the midst of the 1930s Great Depression could lead to a challenge to capitalist rule, Roosevelt pushed through various measures designed to deflect the upsurge into safer channels. The federal minimum wage was enacted at a time when workers were flocking into the newly organized, militant industrial unions to fight the near-starvation wages imposed by the employers.

Just as surely, the minimum wage, minimal as it always was, has been whittled down in the course of the one-sided class war against the unions. In 1968, the hourly federal minimum wage, adjusted for inflation, was the equivalent of $10.70 today. Now it stands at $7.25 an hour. Meanwhile, unionization in the private sector has fallen to under 7 percent from a high of 35 percent in the 1950s.

Abolish Wage Slavery!

We are for an increase in the minimum wage, as we are for any benefit that ameliorates the conditions of the exploited and oppressed. But any gains, however marginal, that may be legislated today are only as good as the ability of the workers to preserve and extend them. Otherwise, they will be about as real as the federal safety and other regulations that are routinely flouted by the bosses.

For the labor bureaucracy, however, it is all a matter of seeking legislative redress courtesy of the supposed “friends of labor” in the Democratic Party. This strategy is epitomized by the SEIU service workers leadership’s campaign to push Congress and state legislatures to raise the minimum wage. Along the same lines, Socialist Alternative’s newly elected Seattle City Council member, Kshama Sawant, whose central campaign slogan was “Fight for 15,” now serves on a mayoral advisory committee with the rich entrepreneur Hanauer and other local capitalists to work out just how high the city’s minimum should be raised.

The working class must fight to resist attacks on wages, benefits and jobs. Communists champion the felt needs of workers, minorities and the poor—for jobs at good wages; for quality, fully government-funded medical care for all; for quality, integrated schools and housing; for a livable retirement—seeking to link such demands to the fight to overturn the system of capitalist wage slavery. We call for jobs for all through shortening the workweek at no loss in pay, for fully indexing wages to inflation and for a massive program of public works to rebuild this country’s crumbling infrastructure. These demands, which will not be met by this decaying capitalist system, point squarely to the need for a workers government to expropriate the bourgeoisie as a class and use the wealth produced by labor for the benefit of the many and not the profit of the few. The urgent task is to sever labor’s ties to the Democrats and to build the working-class party needed to lead the exploited and oppressed in socialist revolution.

In his 1865 work Value, Price and Profit, Marx noted that the working class must not passively give in to the capitalists’ efforts to reduce wages to a minimum. However, he continued:

“Quite apart from the general servitude involved in the wages system, the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects...that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never-ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto, ‘A fair day’s wage for a fair day’s work!’ they ought to inscribe on their banner the revolutionary watchword, ‘Abolition of the wages system!’