Capitalism and workers’ power

Posted: 27 August 2021 in Uncategorized
Tags: , , , , , , ,

You don’t have to read Marx to understand the lack of power workers have under capitalism. But you do have to read beyond mainstream economists and economic pundits. You might turn, for example, to the business school.

Yes, I know, that’s a strange assertion. But let me explain.

The usual argument these days is that workers have acquired a lot more power because of the scarcity of labor. When labor is scarce (basically, when the quantity supplied of labor is less than the quantity demanded), workers can fetch higher wages and be pickier about the jobs they’re willing to accept. That, of course, drives employers crazy and, as usual, mainstream economists and commentators just echo those concerns.

So, is it true? Well, look at the data they cite:

The blue line represents the number of job openings, while the red line is the number of unemployed workers. And, look, way over on the right-hand side of the chart the blue line is slightly higher than than the red line! (Numerically, there were 10.1 million job openings recorded at the end of June and 9.5 million unemployed workers.In other words, for every available 100 jobs, there are only 94 unemployed people available.) And that scares the bejesus out of employers and those who always take the side of employers: they might have to pay workers more to take the terrible, low-paying jobs they are offering.

The result is an increase in workers’ power, as Ben Popken explains:

A pandemic-tightened labor market has given willing and able workers more of an upper hand with their employers for the first time in generations. . .

Worker power is the ability of an employee to command higher wages and benefits and set terms about their working conditions.

Not so fast! Yes, some workers might benefit from the current tight labor market but certainly not all of them, especially at the bottom of the economic pyramid.

Moreover, as Julie Battilana and Tiziana Casciaro remind us, while “it’s understandable” that some claim that workers have more power now than they did during the worst months of the pandemic, it’s still the case that “power remains highly unbalanced in most American workplaces.”

In non-unionized, hierarchical organizations, it is still concentrated in the hands of top executives and shareholders who control all company decisions and priorities, from pay levels to hiring (and firing), and company strategy and policies. Workers continue to have no representation on most corporate boards of directors and have no or very little say over any of these decisions even though they affect their work lives and livelihoods. This lack of control has detrimental effects on worker health and well-being: It has been associated with job dissatisfaction, greater mental strain and damaged physical health. The philosopher Elizabeth Anderson has written that American “workplaces are small tyrannies,” resembling dictatorships more than democracies.

In other words, workers have two positions within capitalism: they sell their ability to work in markets for labor power and then, after those exchanges are concluded, they leave the market and enter another realm, where they perform labor. And inside the enterprises where they work, they have no power at all. There, in the realm of production, their employers—the corporate boards of directors or capitalists—have all the power. That’s why capitalists enterprises are dictatorships, not democracies.

And if workers did have power inside the enterprises—if, for example, the enterprises were organized instead as worker-owned cooperatives?

giving workers more power means giving them the right to collectively validate or reject important decisions that affect their work lives, including the choice of the CEO, how profits are shared, what strategies to pursue and what to prioritize in the face of a health crisis like the pandemic.

And if employers and mainstream economists don’t attempt “to reduce the extreme power imbalance that so clearly puts workers at a disadvantage”? Then, Battilana and Casciaro warn, workers might take matters into their hands:

when the distribution of rewards in an economic system is so unequal as to appear blatantly unfair, those with less power are more likely to upend the current system entirely.

That, of course, would mean the end of capitalism. . .

Comments
  1. antireifier says:

    The write-up is interesting but my first reaction is (as a person who belonged to 6 unions four of which I helped organize and negotiate at least the first contract) that the graph and analysis corresponding to it is misleading. I should also point out that I was also in management at times so recruited, hired, oriented, and trained new staff. I also taught those skills to small businesses in a business school. The graph treats workers as widgets. For example if the unfilled jobs require the ability to read and the workers available cannot read, they will be unfilled. An extreme example to illustrate the point that raw data summarized like that is meaningless because employers are sometimes also looking for QUALIFIED workers. Or is the data ONLY measuring unskilled people in the workforce. That would be unusual. I also live in a seniors complex that has occasionally tried to recruit from the unemployment lines and we have offered Ca$25 an hour for a day job or for a week. No takers.

    Would we hire permanent people? Not from the unemployment lines as presently constructed. The Job Guarantee would work for us.

    But then the reason I helped organize the four unions was the oppression aspect described in the article. That is all too real.

  2. intraverse1 says:

    Not the end of capitalism, because there are three modes: market (laissez faire), regulated, and civic. But the proportions could change. https://www.youtube.com/watch?v=zjCkmzWNNvM&t=56s

  3. Magpie says:

    @antireifier

    Although I am not entirely convinced by your argument, I have no problem accepting it, at least provisionally. So, I’m happy to admit you may well be right in saying that the graph and the data underlying it are misleading.

    However, that’s the data and the kind of graphs “mainstream economists and commentators”–as explained in the post–use; that’s the same data and graphs economics professors teach their students to use. Indeed, that’s the data available.

    It is hard to imagine how can anyone discuss with “mainstream economists and commentators” if one refuses to use their data and concepts. What other data one should use instead?

  4. […] is that the current labor shortages have shifted the balance of power toward workers (an issue I discussed a couple of weeks ago). As a result, economic analysis is starting to […]

  5. […] is that the current labor shortages have shifted the balance of power toward workers (an issue I discussed a couple of weeks ago). As a result, economic analysis is starting to […]

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