The United States is currently experiencing an inspiring wave of strikes. The giant that is the American working class is rearing its head again after 18 months of pandemic, during which it carried society on its back. With inflation on the rise, purchasing power is declining, but tens of thousands of American workers are saying they have nothing more to give. The labour movement in Quebec and Canada must follow the example of our class brothers and sisters south of the border.
Under the slogan of #striketober, at least 100,000 workers voted to strike during the month of October in the United States. Strikes are taking place across various states and industries.
Around 34,000 nurses and other health care workers at Kaiser Permanente in California and Oregon have issued a strike mandate this month.
The 10,000 employees of tractor manufacturer John Deere began striking on Oct. 14. Another major strike among the 1,400 employees of Kellogg’s began on Oct. 5.
At the eleventh hour, the union leadership of the International Alliance of Theatrical Stage and Screen Employees (IATSE) called off a planned strike that would have brought Hollywood to a standstill after receiving a tentative offer from management. But the issue is far from settled, and there is anger among the 60,000-member rank and file, who may well reject the offer.
Many other smaller strikes are taking place or are being prepared.
The reasons for striking are many and vary from workplace to workplace. But beyond the specific issues in each workplace, this movement represents the beginnings of a reawakening of class struggle in the United States. Workers are beginning to say “enough is enough” after decades of erosion of their living and working conditions by a system in deep crisis.
Crisis of capitalism
Here too, there is no shortage of reasons to be angry. The pandemic has exposed the bankruptcy of capitalism.
While we were told that “we are all in the same boat,” some were more “in the same boat” than others.
Essential workers, hypocritically called “guardian angels” by the mainstream media and politicians, risked their health and lives and kept society running. Whatever meager bonuses were given to some workers were quickly withdrawn by the bosses, as soon as they got the chance.
Meanwhile, wealthy business owners were pocketing profits and public subsidies comfortably from their luxurious homes, safe from the virus.
The pandemic has thus exacerbated the already staggering inequalities that the capitalist system inevitably produces. The ultra-rich, far from suffering from the pandemic, have benefited from it. The world’s billionaires have increased their wealth by 68 per cent since the beginning of the pandemic, more than in the previous 15 years combined.
Conversely, the poorest people suffered the most from the pandemic. According to Statistics Canada data, there was a clear inverse correlation between salary and the risk of losing one’s job during the pandemic. The lowest paid workers lost their jobs in greater numbers.
According to a study by the Institut de la statistique du Québec, 63 per cent of Quebecers who consider themselves poor have experienced financial difficulties because of the pandemic. The use of food banks has also exploded. About 18 per cent of Canadians have used food banks since March 2020.
As if the situation wasn’t bad enough, inflation, which is eating into wages, is making things worse.
With the end of lockdowns in 2021, politicians and the bosses they serve gloated about an upturn in the economy after the severe recession of 2020. Growth rates are back in the black. We were told that the good times would return as consumers got back to doing what they do best—consuming—and kept the capitalist machine running.
There were some warning signs in the form of rising inflation. But most economists reassured us that inflation would be transient. For them, rising prices were the normal consequence of an economy that was starting up again after a year of idling.
Now, the representatives of capital are beginning to grow disillusioned. Euphemistically, the governor of the Bank of England has been forced to admit that “transience would be longer.” The U.S. Federal Reserve now expects inflation to remain above two per cent in 2022.
In Canada, in September, inflation was 4.4 per cent. In Quebec, it was 5.1 per cent. It even reached 6.3 per cent in Prince Edward Island. Central banks usually consider an inflation rate of two per cent as ideal. Core inflation has thus reached levels not seen since the early 1990s.
Beyond the abstraction of numbers, for the working class this means a rapidly rising cost of living. In practice, workers who do not receive a wage increase above four or five per cent this year are experiencing a cut in their real wage.
Economists on the payroll of capital explain that the price increases are due to the current problems in supply chains, higher fuel prices and labour shortages. However, it is difficult to believe that the delirious monetary policies of governments have nothing to do with it.
Huge amounts of money have been pumped into the economy by governments (including Canada) to keep it on life support since the pandemic began. Hundreds of billions of Canadian dollars have been created out of thin air through the so-called “quantitative easing” programs.
Since this money did not correspond to any real value in the form of commodities, the value of each dollar in circulation was thus reduced. Behind the apparent complexity of these monetary policies lies the good old policy of printing money.
Normally, central banks combat inflation by raising interest rates. The idea is to encourage households and businesses to save their money rather than spend it, in order to limit the demand that pushes up prices.
Easier said than done.
The economy is just recovering from last year’s recession. Central banks do not want to cut demand. The Bank of Canada does not want to raise interest rates until late 2022. As the Financial Times explains, “Premature tightening [of interest rates], however, could lead central banks to bring about the stagnation they fear: quashing growth just as the economy is recovering.”
In addition, years of near-zero interest rates have contributed to a ballooning public debt. Canada’s public debt has reached an all-time high of 117 per cent of GDP, driven by the government’s need to bail out businesses on the verge of bankruptcy with public money.
In this context of high government indebtedness, a rise in interest rates could have serious effects on public finances. Suddenly, the cost of debt repayment would skyrocket. The Office of the Parliamentary Budget Officer calculates that a one percentage point increase in interest rates would raise the cost of paying down the federal debt by $4.5 billion in the first year, rising to $12.8 billion in the fifth year. This would put government finances in a tough spot.
Therefore, in the scenario where governments raise interest rates, even if it really does succeed in controlling inflation (which remains to be seen), it will mean severe austerity. Capitalist governments, operating on behalf of the bosses, will inevitably seek to pay off their debts by passing the cost on to workers. They will dip into workers’ pockets and cut social programs.
Thus, it is likely that bourgeois governments will prefer to let inflation continue to run amok for a while longer, and if workers pay the price in lower real wages, too bad for them. Either way, workers will lose out.
Wage erosion must be stopped!
In the face of eroding wages, the labour movement in Canada and Quebec must wake up and take action. Already in 2019, one in two Canadians were living paycheque to paycheque. Workers cannot afford a real wage cut.
The fighting spirit of our American neighbors should serve as an inspiration. The capitalist class has never conceded anything to the workers without a fight. On the contrary, they will be quite happy to increase their prices while letting inflation eat away at our wages, because that means more profits for them.
Yet too many union leaders continue to live in the past. They think they can reach compromises and amicable agreements with the bosses. They try to negotiate with the burglar about what jewels he can steal.
The recent negotiations of nurses in the Quebec public sector gave us a good example. While they have been experiencing nightmarish working conditions for years and are leaving the profession by the thousands, the union leadership of the Fédération interprofessionnelle de la santé du Québec (FIQ) still refuses to do anything, preferring to negotiate with a government that doesn’t care. Unwilling to go on strike, the union leadership ended up accepting a rotten agreement that solves nothing.
The trade union leadership must come back to earth and face reality. The only language that management understands is that of demonstrations, strikes and occupations. Union leaders will have to mobilize their members to demand significant wage increases. Those that don’t will deserve to be pushed aside and replaced by a leadership that is willing to fight for its members.
The John Deere strike provided an interesting example of such a grassroots revolt. The union bureaucracy, not prepared to engage in a difficult and risky strike, chose to capitulate right away and defend the employer’s phony offer. But rank-and-file workers organized a rebellion against the union leadership and forced its hand to reject the deal and go on strike.
This struggle against wage erosion concerns the entire working class. The power of our class lies precisely in its numbers. Together we are stronger. Solidarity is our best weapon. A united struggle of all workers to demand wage increases above inflation would have a much better chance of success than isolated strikes.
This would mean fighting class against class, workers against capitalists. But this class struggle cannot stop there. In the final analysis, the erosion of our wages and living conditions through inflation and austerity is an inherent part of the capitalist system. As long as the economic system remains dominated by the anarchy of the market and the dictatorship of the bosses, we will have to fight for every crumb on our plate, and even to keep the few crumbs we already have.