The Financial Times article is a stark indication that the corporate-government campaign to narrow the wage differential between American workers and super-exploited workers in Asia and other “emerging economies” is meeting with considerable success. The breakdown of American and world capitalism is being utilized by the ruling class to carry through a drastic and permanent reduction in American workers’ wages and living standards and raise the level of exploitation.
This is a calculated policy of class war. It is being ruthlessly pursued by taking advantage of the misery and desperation caused by mass unemployment and the spread of home foreclosures, utility shutoffs, hunger and homelessness.
The Obama White House gave the signal for corporations to use layoffs and the threat of plant closures to slash wages by forcing General Motors and Chrysler into bankruptcy last year and insisting that the wages of newly hired workers be cut in half as the precondition for a government bailout of the auto companies.
Now, new workers at the auto companies are making the near-poverty wage of $14 an hour. And this is just the beginning, as the auto companies prepare to demand even deeper cuts in wages and benefits and the lifting of all restrictions on speedup. Similar demands are being made in every sector of the US economy.
The lowering of labor costs in the US toward the levels that exist in Asia is at the heart of the Obama administration’s so-called “jobs” program. Having ruled out any government job-creation programs and abandoned even its own paltry stimulus proposals, and having refused to provide aid to bankrupt state and local governments, the White House and congressional Democrats are touting a pledge to double US exports in five years as their plan to reduce the highest levels of unemployment since the Great Depression.
At the heart of this strategy is slashing the cost of American labor and on this basis reviving US manufacturing as a cheap-labor platform for exports to global markets. The shifting of operations from India to the US is undoubtedly being celebrated both in Washington and on Wall Street as evidence of the initial success of this ruthless policy.
Wage and benefit-cutting has hit every part of the US working class: factory workers, teachers, government employees, and service workers; whites, blacks, Hispanics; US-born and immigrants; women and men; teenagers and workers with decades of experience. Last week the Commerce Department reported that private sector wages fell 6 percent in 2009.
It is on this basis that corporations are again reporting fat profits and CEOs are continuing to reward themselves with seven and eight-digit compensation packages.