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Vol. 78/No. 8      March 3, 2014

‘Productivity’ up, real wages down,
workers pay for capitalist crisis
(front page)
Squeezed by the deepening crisis of capitalist production and trade worldwide, U.S. bosses are taking it out on the working class, seeking to keep their workforce lean, boost productivity, and drive down wages and social benefits workers have won through previous struggles.

Wages were stagnant in 2013, rising only 0.4 percent after inflation, the New York Times reported Feb. 8.

Official government inflation figures, however, don’t accurately reflect the impact of price rises on working people. Costs for food, gas, rent and other basic necessities that eat up the big majority of workers’ income are running higher than the so-called Consumer Price Index.

Between 2007 and 2012, household incomes fell for five straight years, the Wall Street Journal reported Feb. 7. Today incomes are 6.4 percent below 2007, “and — remarkably — 4.7 percent below the level at the end of the recession,” the Journal said.

In fact, workers take-home wages have been falling for some 40 years, as a decline in the average rate of industrial profits spurred bosses to push against workers’ pay. Average real take-home pay of workers today is below the level of the mid-1970s, and this trend toward lowering of wages has accelerated over the past five years. Since the recession ended in June 2009, average real wages for auto workers have declined 10 percent; for all manufacturing workers they’ve dropped 2.4 percent.

Bosses have succeeded in implementing two-tier contracts, like those in effect in auto plants and in more and more other factories, where newer workers do the same jobs as those with more seniority but at half the pay.

Increasing numbers of workers are forced to work on temporary contracts, with lower wages and no benefits, or to work part time. Since 2009, the number working through temp agencies has doubled to a record high of some 2.7 million.

Since the 1970s the bosses’ “productivity” drive — making workers toil harder at the expense of life and limb — has risen annually, but not workers’ pay.

In 1973, workers’ wages as a percentage of the gross domestic product was 66 percent. By 2012 it had dropped to 58 percent, the lowest since the end of World War II.

In the mid-1970s “real wages suddenly flat-lined in the face of rising productivity,” investment analyst John Mauldin wrote in his Feb. 9 newsletter.

While employed workers are finding it hard to get a real pay raise — or one not eaten up by increased health premiums — those unemployed are finding it harder to get hired.

“More than one in six men ages of 25 to 54, prime working years, don’t have jobs,” reported the Journal, “a total of 10.4 million.” More than two-thirds of them are labeled by government statisticians as “discouraged,” and not counted as unemployed.

The number of male workers without jobs aged 25 to 54 was 6 percent in the early 1970s, 13 percent by late 2007, and 17 percent at the end of 2013.

The fight to raise workers’ wages is tied into the struggle to substantially raise the minimum wage. Wages under capitalism are set from the bottom up. When the bosses are able to hold down the minimum wage, it drags down the wages of all.

According to the Bureau of Labor Statistics, 3.6 million workers were paid at or below the federal minimum wage of $7.25 per hour in 2012. In 2013 dollars, today’s minimum wage is one-third less than it was in 1968.

If the minimum wage rate had gone up at the same pace as productivity gains the bosses made on workers’ backs, today it would be $18.28 an hour.

As social pressure mounts, President Barack Obama and other Democratic Party politicians are proposing a paltry raise in the federal minimum wage to $10.10.
Related articles:
Textile workers in Egypt strike over back pay, national wage
On the Picket Line
Trade unions and workers’ road to socialist revolution
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