Some 40 years ago, this writer got into a debate in the Alameda County Building Trades Council with that council’s executive secretary. The executive secretary was pushing the line that our unions should help “our” contractors compete by cutting wages and benefits. “If we cut our pay, then the non-union will cut theirs and we’ll have to cut some more,” I asked. “So I want to know where it’s all going to end.” After repeated unsuccessful attempts to avoid the question (I refused to let him change the subject), the executive secretary finally threw his hands up and declared in frustration, “I don’t know where it’s all going to end. Okay, John?”

That was about back in the 1970s, and there’s still no end in sight. It’s the infamous “race to the bottom”, except now it’s a global race, and anybody who thinks that what happens “over there” (meaning anywhere outside the borders of the United States) doesn’t affect them had better think twice.

In the United States, we’ve seen a slight increase in employment in the last few months. The reason is that wages have been cut so much that it’s often more profitable for businesses to invest in the US than elsewhere (including Canada). Other countries are following suit. In France, for example, we see the beginning of the same process.

In that country, economic growth was been limited to 0.1% in the last quarter, meaning high unemployment and high budget deficits. The reason? France is attracting less capital investment than Germany because profits are lower. (And Germany’s economy is sluggish enough.)

Emmanuel Macron

Emmanuel Macron: This former investment banker wants to run the French economy

So now, the former investment banker turned economic minister in France, Emmanuel Macron, has a solution: He wants to cut pay, cut business taxes, increase work hours and cut workers’ rights. He convinced French president Hollande to push through a law that would do such things as

• Give bosses the ability to violate labor law without fear of going to prison.
• Make it easier to lay workers off.
• Increase the work week from the present 35 hour week.
• Allow employers to force many retail workers to work on Sundays (traditionally a real day of rest for French workers).
• Allow private bus companies to compete with the public railways by cherry-picking the most profitable transport routes.

This comes on top of a $43 billion business tax cut pushed through recently. When Hollande’s own Socialist Party deputies rebelled against Macron’s Law, Hollande simply used a constitutional measure to declare it by decree. Nor should French workers – or anybody else – think this is the end; just the opposite. Macron has declared  “We need to go faster in structural reforms in France.” And in one sense, he is right. A Wall St. Journal article explains: “Germany revamped its economy over a decade ago, and its reforms—particularly to improve flexibility in labor markets—have been credited with making its economy more competitive. Spain, which reformed its labor markets in 2012, has emerged from its slump much faster than Italy and other southern European countries that have been slow to restructure their economies.”

Macron is counting on the French equivalent of that Building Trades Council official mentioned at the top of this article. “The idea is to restore a dialogue with reformist unions to clarify and simplify worker representation,” he said. 

Greece & Germany

As this blog site has recounted, Greek workers and youth have been on the forefront of this race to the bottom. The capitalist propaganda has been that the Greeks are lazy and don’t want to work and that German and other workers will have to pay for the Greek workers’ benefits. Many German workers have bought this line, but as the Wall St. Journal article

result of “race to the bottom” in Greece

quoted above shows, they, too have seen their living standards cut in this never ending race to the bottom, and the planned cuts for the Greek workers will only accelerate the process in Germany.

Similar Propaganda in US

Haven’t we seen something similar here in the US? Aren’t white workers told that they will have to pay for the people on welfare (meaning mainly black people) who supposedly “don’t want to work”? And isn’t big business meanwhile cutting everybody? And haven’t the big business media and the big business politicians here sowed the divide and conquer line with its propaganda about “violent criminals”, the very same propaganda which leads to giving the police a free hand to brutalize and kill black people almost at will?

And as far as France and the European Union: The more they cut living standards, the more capital will be invested there rather than elsewhere, including the United States. The only answer is to learn the lessons globally and link up the struggle globally.

It‘s Called Global Capitalism

It’s called global capitalism for a reason. Today, the slogan “workers of the world, unite!” has more meaning than ever. It’s the starting point of reversing the race to the bottom.