Posted August 24, 2006

A SOLIDARITY WORKING PAPER (2000)

by Charlie Post and Jane Slaughter

A lot of people are getting sick of hearing how good we’ve got it.  “The economy’s booming.”  “Everybody loves Clinton.”  “The stock market is up.”  “Everybody has a job.”  This is what our betters on Wall Street and the network news, in the think tanks and newspaper columns, say we should be grateful for.  But then nobody we know feels lucky, or secure, or rich.  So who’s crazy?

If you’re a young person contemplating the job market, even someone with a college degree, everyone tells you “there are no careers.”  You’re supposed to be thrilled by the fact that you’ll jump from job to job for the rest of your life—it’s called “flexibility” or “being entrepreneurial.”  Many people in their twenties are trying to get used to the idea that they will spend the rest of their lives working temporary or boring, routine jobs with no chance to use their brain or get a promotion—much less buy a house.  According to the Bureau of Labor Statistics’ 1996 projections, the fastest growing occupations in the next millenium will be personal home health aides, manicurists and correction officers.  Even jobs once considered “professional”-university teaching, engineering, computer programming-are being transformed into part-time, temporary occupations where today’s skills may be useless tomorrow.

“It’s fine if you don’t mind being an alienated youth person for the rest of your life,” said one graduate school dropout turned part-time secretary turned socialist.  “But if you wanted to have a family, you feel cheated.”  Some people scrounge up loans and financial aid to go to college just to have a place to hide out for a few years, before they enter this dismal rat race.  Just about no one in this generation believes they will collect Social Security when they retire.  If you’re an older person with a job, you feel cheated too.  Your workload is bigger than ever, you may have a weird new “flexible” work schedule, the lay-off ax is always hanging over your head, and your wages haven’t kept up with inflation.  Lots of people hate the forced overtime; others grab as much as they can, to keep up with their bills.  Management is always coming up with some brilliant new program at work to get you to “buy in” to working harder.  The results are increased heart disease, repetitive stress injuries and lots of depression.

To make it worse, at the very time that social services like good health care, unemployment benefits, Social Security pensions, welfare, and childcare are needed more than ever; governments are cutting or dismantling these programs.  Just when we’re working so hard that we have less time to care for our children and parents, more and more of this burden is falling on individual families.

So, the 1990s has been a decade of intense economic contradictions.  On the one hand, profits are at their highest level since the 1970s.  Corporations are doing better today than at any time in the last thirty years.  And most ordinary working people are doing worse.  What’s wrong with this picture?

Part of the reason we’re hurting is the changes employers have made in the way they organize work, and therefore in the way they make us work.  The new work system, which got its start in the auto industry in Japan but is now used all over the world, is called lean production.

Lean production is the cutting edge of the corporations’ and governments’ attempt to reorganize social life.  Lean Production judges everything and everyone on the basis of speed and productivity.  If anything or anyone does not fit the needs of speed and productivity, they are disposable—whether they are a good, service or whole categories of people.

Individuals are told that they, and they alone are responsible for their success or failure in the new “lean and mean” world of the next millenium.  If you cannot find a job, you somehow failed to train yourself properly for the ever changing demands of the corporate economy.  If you cannot support yourself in retirement, it is because you failed to save or to make the right investments while working.  Society—in the form of unemployment insurance, social security, medical care, welfare, you name it—no longer has any responsibility for the fate of individuals cast off in the search for productivity and speed.  We are literally on our own.

The “war of all against all” that lean production intensifies creates tremendous insecurity which is a fertile ground for the growth of all sorts of social problems.  Crime—usually committed by poor people against other poor people—is a direct outgrowth of a society that says that poverty is the result of individual failures.  The intensified competition for jobs, wages, housing, health care and the like is also a fertile ground for racism, anti-Semitism, immigrant bashing, sexism and homophobia, as each group of working people attempts to maintain their slipping social and economic position at the expense of other working people.  As we become hardened to widespread suffering here at home, we are more easily manipulated into supporting foreign policy adventures-bombings, economic sanctions—that spread the suffering around the world.

As we will see, lean production is not new—it is the cutting edge of capitalism today.

LEAN PRODUCTION-HOW IT WORKS

The heart of lean production is reorganizing work to cut costs.  Sometimes it goes under names like “Total Quality Management” or “team concept” or “reengineering,” but we prefer the more accurate title “Management by Stress.”  Any worker is familiar with the “slogan of the month” new programs management comes up with to increase productivity.  While they say they want workers’ “input,” what they’re really looking for is more “output.”

Bosses have been reorganizing the way we work ever since the beginnings of industrial capitalism.  In the early twentieth century, it was called “Taylorism,” after Fredrick Winslow Taylor, the father of Scientific Management.  Taylor urged employers to do time-motion studies of workers, concentrate all planning work in the hands of managers, and give workers detailed instructions on simple and repetitive tasks.  Henry Ford combined Taylor’s ideas with the assembly line to increase the speed of work even more.  Later, automation—and now computerization—increased productivity (output per worker) even further.  Lean production is the latest version of these schemes to get more work out of fewer people.

From management’s point of view, the beauty of lean production is “eliminating waste”-getting rid of “excess” activities, materials and workers.  The only problem is, their definition of “waste” includes most things that make work life bearable, like breaks, or a reasonable pace, or a set work schedule, or a decent paycheck, or job security.  To get the greatest bang for the buck, lean production stresses workers to the limits of their capacities, through:

• Speed-up, plain and simple—just work faster, or do more jobs, or do the same with fewer people.
• Deskilling—break the jobs down so they take little time to learn.  This saves money because higher paid skilled workers can be replaced with lower paid unskilled workers.
• “Multi-skilling”-really multi-tasking.  Doing more jobs, usually of the deskilled variety.
• Contracting out or privatization of work previously done by unionized workers.
• Use of temporaries, part-timers, and contract workers.
• More flexibility for management in setting hours and tasks.

• Cracking down on absenteeism and eliminating replacements for people who are absent or retire.

Employers have introduced lean methods in all walks of life, from phone companies to health care to coal mines.  Hospitals have turned nurses’ work over to unlicensed aides; universities replace tenured professors with part-timers and use e-mail and the Web to increase workloads.

The auto industry is where lean production first hit the United States, so we’ll use it as an example.  An assembly-line worker in a traditional auto plant could perform her or his assigned tasks in say 45 seconds of the minute the car body moved through her or his workstation.  This allowed the assembler to work faster for a period of time (“work up the line”) in order to create an unofficial break.  In a lean production plant, this is impossible.  Work is structured so that the worker requires 58 seconds to complete the tasks; management’s aim is for everyone to work continuously.  One autoworker described working in a lean factory as “eight hours of aerobic activity each day.”  Today at NUMMI and other auto plants, workers must constantly struggle with their bosses to get bathroom breaks, which management labels as “wasted time.”

Management by stress has also made the work process tighter.  Manufacturers have eliminated large inventories of parts; instead, parts are delivered “just in time,” so the pressure is on the supplier plants.  They’ve laid out the assembly line so that each phase of the production process is tightly synchronized with the next.  Such a “lean” system means they can reduce the number of supervisors needed to directly observe workers—which is not all bad.  But the system itself creates the pressure to never make a mistake.

Then management applies another type of pressure—for workers to actively participate in speeding up their own jobs, through task forces and teams.  It is no longer enough for workers to come to work and do their jobs; they need to become “partners in production.”  Management calls this “empowerment.”  Many union activists call it “cutting your own throat.”

The introduction of new, expensive technology like computers, a feature of the lean workplace, does not necessarily mean that workers are gaining more skills.  Contrary to what the futurists have predicted, new technology today often means deskilling.  Through “expert programs,” or “foolproof” electronic eyes to do inspection, the judgment calls have been taken away from us “fools” and turned over to the machines.  Your job is to keep up with the machine.  Lean production cuts costs not only by reorganizing the workplace but also by sending a lot of the work someplace else, through contracting out, outsourcing and privatization.  Lower-paid, non-union workers now do the jobs previously done by relatively well paid, unionized workers.

Public employees—postal workers, teachers, transit workers, hospital workers, social workers, sanitation workers and others—are among the most likely to be unionized.  When federal, state and local governments have given private firms contracts to provide services; the results have been disastrous for both public employees and the public at large.  Not only are the wages and working conditions at the private contractors much worse, but the contractors often reduce services to boost their profits.  It is not uncommon for cities with privatized garbage collection to see frequency drop from twice a week to one a week. 

Unions have traditionally attempted to “remove labor from competition” by bargaining for uniform wages and working conditions within a company and industry.  Privatization is one way to create competition among workers-giving work to the lowest bidder.  Another way is through two-tier workforces, where new-hires are paid substantially less and are put on a different track where they’ll never catch up.

Whether a second tier exists in a particular workplace or not, two-tier is certainly the case in the workforce as a whole.  The top tier is a shrinking number of permanent (till you’re laid off), full-time, decent-paying (but less so) jobs.  The second-tier jobs are increasing rapidly, pay less, are temporary, maybe part-time, and almost never union.  What the two tiers have in common is that in both of them, life on the job is more stressful than ever.  The second-tier workers are disproportionately women, young people, African-Americans and Latinos—or those forced out of their formerly good jobs.

In public universities and colleges, for example, close to half of all classes are taught by adjunct faculty—part-timers who are paid far less than full-timers and usually have to hold several teaching jobs at once.  In some public sector workplaces, the second tier is workfare workers.  Welfare recipients who receive less than the minimum wage and can be denied their meager benefits for any minor offense are cleaning parks, mopping floors in government buildings and filing in government offices—work previously done by union members.  Government policies have aided and abetted the corporations’ drive to increase competition among workers.  Workfare was created not just so that politicians could brag about putting “freeloaders” to work; it was a way to push hundreds of thousands of people into the workforce, and thus keep wages for those bottom-of-the-heap jobs low.  Legislation that deregulated the trucking, airlines and telecommunications industries intensified competition and thus encouraged employers to reorganize work and undermine job security.  NAFTA made millions of workers fear their employers would move to Mexico—and therefore made them willing to give concessions or vote no in a union drive.  The Clinton Administration’s Labor Department actively promoted labor-management cooperation programs and “reinventing government”—cutting jobs.

WHY LEAN PRODUCTION?

Why have corporations and government embraced lean production?  Leaders of the AFL-CIO have two answers.  First, they say that our bosses are acting irrationally when they pay low wages, cut jobs, and intensify competition among workers.  John Sweeney and most other top union officials argue plaintively that corporations and governments are shooting themselves in the foot by pursuing this “low road” (wage cutting) to competitiveness.  Second, they argue that corporations are simply “greedy.”  Rather than being satisfied with a “reasonable” return on their investments, corporations attempt to maximize profits at the expense of the rest of us.

The AFL-CIO would like to convince employers to take the “high road.”  They should stop fighting unions.  They should pay decent wages and realize that a good union, one with “partnership” as a policy, will help institute a “high-performance workplace,” one with greater productivity, quality, and therefore profits.  According to the AFL-CIO’s “Common Sense Economics for Working Families—The Top 10 Myths about the Economy”: “When wages grow, consumers spend more; business invests more in efficiency and productivity increases.  This leads to higher wages and economic growth—and the cycle continues.”  What’s wrong with this scenario?  “Investing in efficiency and productivity” equals lean production—and that means layoffs and lower wages for workers, not more jobs and higher wages.

Most union leaders seem to be caught in a time warp on this question; they’d like to go back to the 1950s when U.S. corporations’ dominance over their competitors allowed both workers’ incomes and profits to grow together.  Their belief in the possibility of a “win-win” solution where both workers and employers benefit has led them to embrace various forms of labor-management cooperation.  Under various labels—Quality Circles, Team Concept, etc.—union leaders have offered their support in management’s bid for competitiveness.  Union leaders have agreed to cooperate with management to get workers to work harder and longer for less, in the hope that these givebacks might save jobs.

Many workers have had the same hopes and have agreed to these schemes.  They may know the boss is out to screw them, but still feel they have to cooperate in the loss of work rules in the hope that management will not close their plant, or contract out their work.

Of course, the embrace of labor-management cooperation has not produced either job security or wage increases.  In fact, cooperation schemes have helped pave the way for lean production’s spread across workplaces.  By giving up the protections of clear contractual language on job categories, for example, and by signing on to mandatory “teams” and the like, some unions have helped create a workplace environment where workers actively participate in implementing lean production.  It’s no longer enough to do the job to get paid; workers are expected to use peer pressure and contribute their ideas to speed up and cut jobs.

The AFL-CIO’s economics helps the labor officialdom justify its strategy of labor-management cooperation.  The strategy of “jointness” has many benefits for the labor bureaucracy—it creates many more full-time union positions to administer labor-management cooperation schemas and it provides an alternative to the mobilization of rank and file workers which could endanger the political and social position of the officialdom.

Unfortunately, the AFL-CIO completely misunderstands how the capitalist system works.  Put simply, there are no “win-win” situations for both capitalists and workers.  Capitalism creates a “zero-sum game”—every gain for capitalists in competitiveness and profitability comes at the costs of workers’ wages and working conditions.

It is true that one group of workers may gain short-term job security as a result of cooperating with their bosses.  However, these gains must come at the expense of other workers (now called “the competition”).  And competition among workers has long-term consequences.  When workers—in different companies, workplaces or even departments—are pitted against one another, the race to the bottom is on.  The temporary winners will soon be asked for more givebacks as the next round of competition begins.

The conflict between workers and employers is built into the basic structure of capitalism.  Workers create the vast majority of accumulated wealth.  In the words of “Solidarity Forever”: “It is we who plowed the prairies; built the cities where they trade; Dug the mines and built the workshops; endless miles of railroad laid.”  Yet the capitalists control this productive wealth (land, machinery, offices, etc.).  They set up work in a way that ensures workers will create goods and services far beyond the value of what we take home in wages and benefits.  It is this “unpaid labor” that is the source of all profit in capitalist society.

Without the workers, no profits, no huge salaries for managers and executives, no new investment.  To increase profits, capitalists must get workers to work as long and as hard as possible—for as little as possible.  Our wages are their costs.  Any improvement for us, in pay or working conditions, must come out of profits—and vice versa.  Because the bosses’ gains are the workers’ losses, the interests of capitalists and workers are fundamentally opposed.  Try as they might-and many have—no one can wish away this basic conflict of interests.

The driving forces of capitalism—profitability and competition-make the conflict between workers and capitalists continuous and irreconcilable.  What will bring the greatest return on their investment drives every major decision capitalists make.  Profits decide what is produced (tanks or deodorant), where it is produced (Indonesia or the U.S.) and how to produce it (hand tools or automated machinery).  The needs of consumers, the environment, workers do not matter.  As long as profits are made, capitalists do not care whether their factories pollute the air and water or working people suffer from unemployment, poverty and workplace diseases.  The infamous cost-benefit decision that led to the production of the Ford Pinto-profits were projected to be much greater than the money that could be lost to the lawsuits of the bereaved—is one example of the perverse logic of profitability.  Regardless of the desires of individual managers or owners, for capitalists the bottom line is the only line.

It’s not greed that drives capitalists to get the biggest bang for their buck (although greed there is aplenty).  Competition is the disciplining force that forces each and every capitalist to minimize costs and maximize returns.  Lowering prices is the main way companies compete with one another.  The company that can offer the same quality product for a lower price (or a higher quality product for the same price) wins—that company increases its share of the market and makes more profits.  If management decides to raise their workers’ wages or improve their conditions, the company’s costs go up.  The company will not be able to offer its product for a competitive price; it will lose market share and make less profit than its competitors.  No one will invest in a business that is not making a good profit, so the company’s source of money for new investments—needed to buy more efficient machines and computers-dries up.  Any capitalist who loses money—or even one who makes a lower profit rate than others—faces the possibility of going bankrupt.

The cut-throat nature of capitalist competition can be clearly seen in the recent anti-trust trial against Microsoft.  In their quest to dominate the computer software market, Microsoft’s executives have used every available means to eliminate potential competitors.  Microsoft’s executives showed little concern for the fate of other corporate chieftains, much less the hundreds of thousands of workers whose livelihood was at stake.  The Microsoft case also shows the real limits of government attempts to regulate competition.  Only when other giant corporations (Sun, Netscape, America On-Line) find themselves harmed by “unfair competitive practices” does the government step in to “level the playing field.”

Competition and the drive to maximize profits through the introduction of new technology spur capitalism to long periods of economic growth.  The twenty-five years after the Second World War were such a long capitalist boom.  But ironically, the very things capitalists do to remain competitive, especially the replacement of workers with new technology, eventually lead to falling profits on new investments and to long periods of economic stagnation and crisis like the one that began in the early 1970s and is just now ending.  This is because the introduction of new technology has contradictory effects on the capitalist system.  When each individual company invests in new technology, that company improves its competitive position vis a vis the others.  But at the same time, the rising cost of technology lowers the rate of profit for all the capitalists.  What had been a logical and rational decision for each competitor ultimately leads to lower profits for all, and thus a crisis for the whole system.

Falling profits intensify competitive pressures on capitalists to cut costs at the expense of workers.  As profits fell sharply in the early 1970s, capitalists began to search for ways to lower costs.  At first, it didn’t occur to managers to break the union contracts that had helped provide stability for so long.  Chrysler set the ball rolling when it asked the UAW for concessions in 1979.  When other companies saw that union leaders were willing to say yes, they began an offensive against unions-and nonunion workers—that continues to this day.  Lean production marks the high point of corporate attacks on unions and government slashing of social benefits.

So John Sweeney has it wrong.  Taylorism, Fordism, and now lean production do make sense for capitalists.  And lean production seems to be bringing them positive results.  Combined with the elimination of the least profitable companies through bankruptcies and mergers, lean production’s reduction of wages and increases in productivity have brought some increase in corporate profits since the early 1990s.  Capitalists and their representatives in government are keenly aware that the only way they can continue this recovery of profitability is to continue and deepen lean production.

HOW DO WE FIGHT LEAN PRODUCTION?

The place to start fighting lean production is the place it begins—the workplace.  Workers need to resist management’s attempts to speed up their work, to contract it out, to introduce a two-tier workforce, through job actions (slow-downs, work-to-rule campaigns, “running the plant backwards”) and strikes.  Lean production’s reduction of inventories (“just-in-time”) and tendency to run with the fewest possible workers makes it particularly vulnerable to work stoppages by small groups of strategically placed workers.

We have already seen some important battles again lean production in the workplace.  The 1997 UPS strike won new full-time jobs to replace part-time ones, although management later broke the agreement.  The strikes against GM in 1998 demonstrated the weak link of lean production, as 9,200 workers in Flint, Michigan successfully deprived almost all of GM’s plants in North America of parts.  In February 1999, American Airlines pilots mounted a sick-out against a two-tier wage structure that nearly paralyzed the airline.