BY ARGIRIS MALAPANIS
In the aftermath of the UPS strike, the big-business press around the world has been running a spate of articles and editorials on the outcome of the walkout. Most of them are expressing the deep concerns of the capitalist rulers that the Teamsters victory in the August 4 - 18 battle may mark a turning point in labor's resistance to the employers demands for "sacrifice."

A number of these opinion columns also point to a growing nervousness among sections of the employing class about the stagnation of labor productivity in the United States and the volatility of the boom of paper values on the stock market.

"The just-resolved United Parcel Service strike was a shot across the bow of the inflationless 1990's," said Stephen Roach in an op-ed piece in the Sunday "This Week in Review" section of the August 24 New York Times. Roach, chief economist for the investment bank Morgan Stanley Dean Witter, had been a major proponent of "downsizing" and "reengineering."

About a year ago, Roach gave widely publicized interviews recanting from those views and saying downsizing "had gone too far." The layoffs, speedup, declining average real wages, and worsening working conditions that accompanied implementation of the concepts he had preached for years, Roach said in May 1996, were bound to lead to a "worker backlash" - the title of his recent column in the Times. Roach was relentlessly attacked for taking this position last year, especially in the capitalist media in Europe.

"American workers are now beginning to challenge the very forces that have led to a spectacular resurgence in corporate profitability in the United States," Roach said in his August 24 column. "They are, in effect, saying `no' to years of corporate cost cutting that has been directed primarily at the nation's labor force."

Roach said the UPS-Teamsters settlement "was largely on the union's terms" - a fact commonly accepted among bourgeois economists and other such writers.

The August 23 Economist of London, for example, headlined its article assessing the outcome of the UPS strike "Labour's summer victory." And the September 1 Business Week featured the following headline that filled the entire front page of the magazine: "SHARING PROSPERITY; Wages are starting to move up - and the UPS settlement is a win for workers. But real wages for more than half of all Americans are actually lower than they were in 1989. What will it take for them to catch up?"

An endless boom or a depression?
Unlike Roach, the Economist tried to downplay the significance of the confrontation between the world's largest package delivery company and its 185,000 unionized employees for revitalizing the labor movement. The Economist article also argued that the result of the strike will have no detrimental impact on the current Wall Street "miracle."

The Morgan Stanley economist presented a different view. Roach said the wage settlement at UPS may reverse the trend of declining real wages workers have been forced to accept for the last quarter century and points to "the danger of renewed inflation." He also argued that the settlement "underscores the potential for a sharp decline in the ever frothy stock and bond markets."

The Dow Jones industrial average has indeed been wracked by what the August 26 Wall Street Journal described as "late- day stock tremors." Between August 6 -two days after the Teamsters walked out of their jobs at UPS - and August 26, the Dow Jones dropped from its record high of 8,529 to 7,782 points, nearly 6 percent. This included the plunge of 247 points on August 15, "its second-biggest one-day point loss ever," second to the 1987 stock market crash, as the Journal noted.

"These concerns are certainly at odds with today's conventional wisdom," Roach said. "Many believe that the United States economy has entered a new era. According to this tale, the post-cold-war forces of globalization, deregulation and a technology-led Information Age have combined to produce a rare and powerful recovery, led by increased worker productivity."

The case for `worker backlash' view
Roach dubbed this view "the productivity-led recovery," counterposed to his "labor-crunch recovery" scenario.

"Unlike the productivity-led recovery, the labor-crunch recovery is not sustainable," Roach said. "It is a recipe for mounting tensions, in which a raw power struggle occurs between capital and labor. Investors are initially rewarded beyond their wildest dreams, but those rewards could eventually be wiped out by a worker backlash."

The Wall Street financier said the cornerstone of his opponents' arguments was that labor productivity has been rising due to computerization and other technological advances. Pointing to recently released figures by the Commerce Department that showed a further slowing in the rate of growth of labor productivity in the United States, Roach stated, "There's not a shred of evidence that supports the notion of a meaningful improvement in America's productivity."

Mired in a steady decline of the average rate of industrial profits and intensifying competition for markets for more than two decades, big business has not been investing in new plants and equipment to expand productive capacity. The average rate of return in industrial investments is declining even as the average mass of profits grows. So landlords, industrialists, and other businessmen have been pouring money capital into the stock market, fueling the speculative bubble on Wall Street.

At the same time, the capitalist class has been trying to shore up its profit rates by intensifying the exploitation of labor. Without a growth of productive capacity, and without qualitative changes in technology, the only way to fatten profits is to force workers to produce more for less in the same amount of time. The "productivity- led recovery" school has been arguing that the bosses have been successful in accomplishing precisely this goal, which Roach tried to refute.

Specter that haunts the ruling class
It's not just the latest government statistics that support his view, Roach argued. "There has also been a dramatic realignment of the nation's economic pie, with a much smaller slice going to labor. Corporate profits surged to 9.6 percent of gross domestic product in 1996, the highest share in 28 years, and labor compensation stood at 58 percent of gross domestic product in 1996, well below the high of 59 percent hit in the late 1980's.

"Which takes us back to the recently settled U.P.S. strike. One strike hardly makes a trend. But there can be no mistaking the message from the nation's most significant work stoppage since 1983. Today, with the unemployment rate at a 24-year low, labor unions were emboldened to take action. And with corporate profitability at its highest in a generation, management has decided that it can afford to give workers a raise. For U.P.S., the cost of settlement is hardly trivial. By some estimates, it will eventually cost as much as $1 billion a year, and that comes right out of the company's bottom line," Roach stated.

"In the end," he continued, "that's what worker backlash is all about. It speaks of cost cutting, which has been central to America's economic recovery in the 1990's." Whatever the major issues turn out to be in upcoming labor battles, Roach added, "gone are the days of a docile American labor force that once acquiesced to slash-and-burn corporate restructuring."

The former "guru of downsizing" did not offer any solution to the gloomy future for big business he predicted. He concluded with the following statement, "As the pendulum of economic power begins to swing from capital to labor, these are the very risks we must now begin to confront."  
 
 
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