Nearly 150,000 US railroad workers are set to strike, as the latest manifestation of workers, across the globe, rising from their knees, and demanding higher wages, as central bank created inflation, and NATO's economic war against Russia, has hit their living standards. In the US, President Joe Biden, fearing rising workers' anger, and demands for higher wages, in response to the rising prices that his and his predecessors policies have created, intervened in the pay negotiations, as he did in the West Coast Dockers dispute, where the workers are now in their fourth month without a contract.
Biden is worried that, with inflation continuing to rise, and US supply chains broken, as a consequence of the idiotic lockdowns, imposed over two years, a rail strike, on its own, would cause massive disruption, a rail strike and dockers strike, together, would bring the economy to its knees, on his watch, just as voters go to the polls in November. Workers, in the US, have a tremendous opportunity to use that as leverage in negotiations. But, the deal negotiated by Biden with railroad companies, and union bureaucrats, over the heads of rail workers, via the Presidential Emergency Board, is itself a terrible deal.
US railroads have seen a massive reduction in the number of workers from 1 million in the 1950's to just 150,000 today. Between 2018 and 2020 alone, they lost 40,000 jobs. Some of that is down to the reduction in the size of the railroad which peaked at 254,000 miles in 1916, and was down to 140,000 by 2011, but also to the fact that multiple competing companies went bust, leading to the inevitable concentration and centralisation of capital in the hands of a few mega sized corporations, with also the consequent rationalisation that goes with it. In addition, more or less all passenger transport was shifted to Amtrak, with the number of passengers remaining constant at around 20 million per year after 1980. Longer distance passenger travel in the US is frequently by plane rather than train, whilst local passenger travel is by car, or urban transit systems, like the tube in London.
The main significance of the railroad in the US is freight. The US draws in masses of goods across the Pacific from China and Japan, and other Asian economies, to its West Coast ports, with the containers being put directly on to trains and trucks to be shipped into the US. The same thing happens with goods shipped into East Coast ports from the EU. In addition, the US requires rail freight to shift bulk commodities such as coal, and minerals within the US itself. Given the vast interior of the US, the most effective means of shipping these goods to markets, and to businesses is by train, with trucks making more local deliveries to locations not along the railroad. For years, however, US railroads were characterised by the same kind of underinvestment that core industries in the UK had suffered, prior to WWII, by private capitalists. The solution was more or less the same. It was rationalisation by large-scale socialised capital. In Britain, the 1945 Labour government bailed out the industries, nationalising them, and paying off the former owners handsomely. They then used taxpayer money to put in the capital investment that private capital had failed to do, and in the process raised productivity considerably, thereby, reducing the number of workers employed massively. The UK coal industry was a classic example.
In the US, this process occurred in the 1980's, as the rail industry was in a state of almost collapse, threatening the US economy. In some places, lack of investment in track meant that trains could only travel at around 6 m.p.h. for fear of otherwise being derailed. But, of course, it being the 1980's, and the era of Thatcher and Reagan, it looked very different to the process of the 1950's. The state became heavily involved, and via the Federal Railroad Association, provided a series of grants and other funding, but the state also put in place the framework by which the railroads could be concentrated into the hands of a few massive companies, and as part of that they introduced a huge deregulation of the railroads too.
So, the shrinkage of the workforce has arisen for a series of these factors, and, of course, the introduction of increased use of technology developed in the 1970's and 80's, which affected dockers too, such as containerisation. All of this increase in productivity, and concentration of capital, raised the rate and mass of profit, which is why speculators such as Warren Buffett, and his company, Berkshire Hathaway, bought heavily into railroad company shares. But, like all of these large socialised capitals, in the last 20-30 years, an increasing proportion of the profits, then went, not into actual investment in the company, into creating more and better track and rolling stock, but simply into the payment of dividends, and the buy back of shares to inflate share prices, and so create paper capital gains for shareholders, as well as to flatter earnings per share figures, and so on, as shareholders became increasingly concerned with capital gains from rising asset prices, rather than dividends, as yields fell. Since 2010, US railroads have paid out $196 billion in dividends and stock buybacks to shareholders.
A strike will cost railroad companies around $2 billion a day, and have a huge effect on the US economy, especially if combined with a strike by dockers, whose own contracts have not yet been resolved. It is the effect on the economy, and, imminently, on Democrats chances of winning seats in the November mid-term elections that prompted Biden to intervene in both disputes to prevent strikes happening. Biden has a reputation of being union friendly. Indeed, his involvement is in contrast to the studied refusal to get involved, in disputes, of Starmer in Britain, other than to sack Labour MP's who do support workers on picket lines.
But, Biden's involvement should be a warning to those who see such involvement as a positive. Conservative social-democratic politicians, like Biden, are only friendly towards the union bureaucrats, at best. They are not friendly to rank and file workers in those unions, Starmer's actions demonstrating that clearly. Their outlook, at best, coincides with that of the union bureaucrats, whose own middle-class outlook is not much different to that of the middle-class company bureaucrats they negotiate with on a daily basis.
Indeed, not even that is true of Starmer, whose reactionary Blue Labour, now represents the outlook of the small capitalist and petty-producer, and their nationalistic and bigoted world view. For the social-democrat and union bureaucrat, it is not surprising, that they share the same outlook as the middle-class managers in large-scale industry, precisely because, not only do they share a similar middle-class lifestyle – the union bureaucrats involved in the US railroads are paid salaries of hundreds of thousands of dollars. President of the Brotherhood of Locomotive Engineers and Trainmen (BLET), received total compensation of $275,000 in 2021 – but also because of their common social function of bargaining within the capitalist system. Social-democrats simply take that outlook into the realm of politics.
That means that both have a commitment to ensuring the continuation of that system, which inevitably means ensuring that the interests of capital, and its expansion prevail. Its only on that basis that both see the interests of workers being ensured in the longer-term, which, if you assume that capitalism is eternal, would be true, as Marx describes in Wage, Labour and Capital, Value, Price and Profit and elsewhere. The point is that capitalism is not eternal, and workers interests are best met, not by being content with simply bargaining for a higher price for their labour-power, but seeking to end the wages system itself, by securing control over the socialised capital that is already their collective property, and using it to meet their interests, not the interests of shareholders and bondholders, whose social function has long since disappeared.
The union bureaucrats have an incentive to reach any kind of deal that makes their life easier, and avoids a strike. What is more, for the last 40 years, workers have been on the back foot, because the technological revolution of the 1970's, and 80's, created a huge relative surplus population, and that was increased by the drawing into the global labour force of hundreds of millions of new workers from various reserves, most notably that of huge peasant populations in developing economies drawn into the realm of wage labour, most notably in China. It meant that, not only did workers lack the muscle to increase their wages in proportion to output, but that proportion fell, and that weakness became apparent, giving workers little incentive to join unions that could no longer improve their condition.
In the 14 years since then, states have attempted to protect the interests of the ruling class that owns its wealth in the form of these assets, by deliberately slowing economic growth, so as to slow the growth in the strength of workers and their demands for higher wages, as well as slowing the demand for capital accumulation, which causes interest rates to rise and asset prices to fall. In 2010, they did it with globally imposed fiscal austerity measures that persisted for years, and wreaked such havoc in Greece, Spain, Portugal, Ireland and Britain. When that austerity could not be imposed any longer, it took the form of demands to restrict trade, notably Trump's trade war, and Brexit, a continuation of which is the economic war conducted by NATO imperialism against Russia and China.
But, as the underlying strength of the long wave continued to make itself felt, and trade, in a multipolar world, in which China is the workshop of the world, and rising economic power, simply rushed into new channels, like a mountain stream that hits a blockage constructed by beavers. In fact, in doing so, the worst affected were US and British imperialism, and again that is repeated with the sanctions imposed on Russia, which now looks set to crucify the European economy over the next few months. Its boycott of Russian oil and gas, and decision not to open Nordstream2 means it faces huge increases in energy prices and even shortages that are wholly unnecessary.
As the attempts to restrict trade backfired, so another means of slowing economic growth was then found in the idiotic lockdowns imposed for two years from 2020 onwards. But, that was like sticking a finger in a collapsing dyke. It was extremely time limited, and again backfired, because along with it, states had to print even more huge quantities of money tokens, which they handed to people to spend to buy goods they had prevented being produced by those very lockouts and lockdowns! So, the central bank inflation, created since 1990, that had been deliberately confined to the realm of asset prices, but which would inevitably burst out, at some point, into the real economy, now was provided the means for doing so, as even greater money token printing was directed towards that real economy. The dams were burst, the liquidity rushed out pushing commodity price rises into double digits, at the very time that, as economies opened up the demand for labour surged.
So, the social democrats do not know what has hit them, as they are still operating with a mindset determined by material conditions that really fell apart in 2008, but which were kept on life support unsustainably, giving the appearance of life in a corpse. For those like Starmer, whose opportunism and parliamentary cretinism even led them out of the ranks of social-democracy into the ranks of petty-bourgeois reactionary nationalism, the situation is even worse, because they are even more heading in the opposite direction to history, alongside the Brexitories, of whom they have become a pale shadow. The Brexitories wanted Brexit, because they sought to confront the advance of workers in this new set of material conditions, by imposing even more reactionary conditions upon them, thinking they could do so in the same way they have for the last 40 years.
And, Biden also has sought to limit the advance of US workers, as he has done in his intervention in both the dockers, and now the rail workers disputes. His immediate concern is the fortunes of Democrats in the upcoming elections, but his longer-term consideration is the interests of large scale US capital, in which, at least, he is more progressive than both Truss or Starmer. So, he is trying to impose a bad deal on the dockers and rail workers, simply in the hope of avoiding a strike. That looks unlikely, unless the employers come up with much better deals.
The railroad workers deal is particularly bad. On the face of it, a 24% wage rise looks significant, but it is over five years, meaning it amounts to only around 4% a year, at a time when the official inflation rate in the US is at 8.3%, but the real rate for workers is already in double digits and rising. In addition, railroad workers need to make up for all of the years that their wages have been falling, over the last 40 years. The offer of backdating bonuses to 2020, and of an up front $11,000 goes nowhere near achieving that. A 24% rise would be just about what is required for this year alone, and workers would be advised to avoid any contracts extending beyond a year, in current conditions. On the contrary, they need to build in escalator clauses into any deal, so that wages rise each month in line with a cost of living index calculated by committees of workers and labour movement economists.
Furthermore, the wage rise is only part of the deal that the railroad workers need to negotiate. Even by the anti-worker conditions that have existed in Britain since Thatcher, and which Blair did nothing to reverse, the conditions facing US railroad workers appear barbaric, though no doubt the Brexitories would want to copy them if given the chance. The railroad workers are employed on contracts that keep them on 24/7 365 days a year call-out. That is more like the kind of conditions that rail workers faced in Britain in the 19th century, which also led to numerous rail accidents, as workers were simply worn out, and falling asleep.
What is more, having created conditions that are bound to impact workers health, the companies penalise workers for being ill, or even taking time off for medical appointments! Such time off is unpaid, on top of a lack of any decent paid holidays for workers, and the companies operate a points system, so that workers who take time off for medical appointments rack up points against them, which can lead to penalties, and sacking. Employers have been introducing similar systems in Britain over the last 20 years, but not yet to this degree, though again, the Brexitories will no doubt see it as desirable as they seek to introduce further post-Brexit deregulation in their proposed Freeports and Charter Cities, in which all civilised standards will be outlawed.
Already, rank and file rail workers are making their opposition to this terrible deal known, and rank and file workers organisations across the US are mobilising to provide them with support. But, Biden can impose a deal, via Congress, and no doubt he would be backed by some of the union bureaucrats, and a massive media propaganda campaign, no doubt painting those opposing the deal as some kind of enemy within at a time of war with Russia, much as Thatcher did against rail workers in Britain, at the time of the Falklands War, and again in response to the Miners Strike of 1984-5. But, again, this is not 1982 or 1984-5; then workers were being put on the back foot, today they are striding forwards. It will be up to progressive social democrats, in the Democrats, including those in Congress, to oppose Biden, and use their position as a platform to rally support for the rail workers, and others fighting to defend their living standards.
Rail workers will inevitably create rank and file organisations that will cross union boundaries, as part of this process, which should give them an incentive to create large industrial unions themselves, in place of the current divisions. Indeed, we should still have in mind the idea of creating One Big Union.
In the US, as in the UK, and across the EU, indeed across the globe, living standards are threatened by rising inflation caused by central banks and NATO imperialism's economic war against Russia and China, but, unlike the last 40 years, workers are in a strong position as economies face labour shortages. In addition to uniting workers across industries in a general struggle against capital, its also necessary to unite the rest of the working-class that is not currently in employment, i.e. pensioners, and those on benefits. We need union federations like, the TUC, the AFL-CIO and so on, to be forced to call General Strikes in support of demands for big rises in pensions and benefits, and their index linking to a workers cost of living index. In short in place of purely sectional struggles, we need a class struggle for the interests of labour against capital.
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