From The New International, Vol. XI No. 9, December 1945, pp. 259–262.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Coen: Is the UAW fighting for the whole world?
Reuther: We have been fighting to hold prices and increase purchasing power. We are making our little contribution in that respect.
Coen: Why don’t you get down to your size and get down to the type of job you are supposed to be doing as a trade union leader and talk about the money you would like to have for your people and let the labor statesmanship go to hell for a while?
Reuther: Translate that so I know what you mean ... I understand you think our position makes it more difficult to work out a solution because we are getting into issues here that lie outside the narrow limits of collective bargaining. Instead of talking about wages, what we want, and sticking to that, we are talking about prices and profits.
Coen: That is very well stated. Nobody else is doing that but you. You are the fellow that wants to get the publicity out of this whole thing. You want to enhance your own personal political position. That is what the whole show is about.
Reuther: I see.
Coen: Do you believe we have to learn to live fifty per cent better, or do you believe first we have to learn how to create that much more wealth? What has that got to do with dividing up profits and reducing the salaries of the people in the corporation?
Reuther: Because unless we get a more realistic distribution of America’s wealth, we won’t get enough to keep this machine going.
Coen: There it is again. You can’t talk about this thing without exposing your socialistic desires.
Reuther: If fighting for a more equal and equitable distribution of the wealth of this country is socialistic, I stand guilty of being a socialist.
Coen: You are wasting your time and our time with all this crap.
This was strange talk for a contract-negotiations meeting between an American trade union and an American corporation. It was enough to make old Sam Gompers turn over in his grave. American labor had come a long way since he had nailed to its masthead the slogan of “A fair day’s pay for a fair day’s work!”
Nor was this a freak. The spokesman of labor was not speaking on behalf of some left wing, two-by-four local, in some unimportant industry, and the spokesman of capital was not the harassed employer of a few dozen workers in some loft. Walter Reuther spoke as vice-president of the United Automobile Workers (CIO) which boasts that it is the “world’s largest trade union” with over a million members at its wartime peak. Harry Coen spoke as the director of labor relations of the General Motors Corporation which is the nation’s (and probably the world’s) biggest capitalist enterprise with a capitalization of over two billion dollars.
The immediate economic background of the dispute was not difficult to discern. It was rooted in the wartime economy that froze the wages of labor in the midst of steadily rising prices and mounting blood profits for industry. The rise in the cost of living for the period of 1941 to 1944 was variously estimated from the CIO-AFL’s figure of 44 per cent increase to the Department of Labor’s estimate of 28 per cent (as of August 1945). This increase had been covered during the war years by a lengthening work week that gave workers from eight to sixteen and more hours of overtime at time and a half. V-J Day was quickly followed by a rapid decrease of the working week that practically reduced all industrial workers to a forty-hour week. This meant a cut in “take-home pay” of anywhere from 20 to 50 per cent. The UAW has estimated that the “take-home” of GM employees has dropped from a wartime average of $58 a week to a current $44 a week. The drop in weekly earnings saw no commensurate drop in the cost of living. On the contrary, the steadily rising price index seemed completely unaffected by the end of the war.
A few days after V-J Day, Walter Reuther addressed a letter to General Motors stating the union’s wage demand for a 30 per cent increase for all GM auto workers. (Some 30,000 GM employees work in electrical appliance plants and are organized by the United Electrical, Radio & Machine Workers of America, CIO.)
It was not the size of the increase demanded, however, that made the UAW proposals significant. The AFL’s International Association of Machinists made the same demand upon a number of corporations and is at present waging a most militant strike against the Yale & Towne Manufacturing Company of Stamford Conn., to achieve it. What gave rise to the universal comment that “this is no ordinary strike” was the line of argumentation employed by the UAW and the implications inherent in it.
The UAW did not proceed from the traditional philosophy of trade unionism and rest its case for the 30 per cent increase merely on the cost of living figures. It made a significant new departure and proceeded from an argument based upon the corporation’s ability to pay. The union did not merely say that labor was entitled to enough wages to live on. It also said that labor was entitled to share in the wealth produced by industry. It set forth the entirely logical (but from the standpoint of capital entirely unreasonable) demand that profits were a legitimate subject of collective bargaining.
The UAW’s position flatly contradicted the capitalist economists who preached that increased wages were only possible as a result of increased profits. This capitalist theory is based upon the concept that the interests of capital and labor are complementary, that the welfare (i.e., profits) of industry meant the welfare (i.e., higher wages) of labor. The UAW proceeded from a position which had implicit within it the concept that the interests of capital and labor were antagonistic, i.e., the concept which Karl Marx established a hundred years ago and which the leaders of American labor have until now sought to deny. The UAW stated that it was the aim of labor to increase wages at the expense of profits. It took the position that if the workers continued to work at present wage rates it would only lead to super-profits for GM. The 30 per cent increase, therefore, was to be paid at the expense of GM profits.
The union went a step further. It stated that the 30 per cent was not to be passed off to the public in the form of increased prices for automobiles. This meant a second decisive break with traditional trade union concepts. The old AFL position had been to consider prices the sole province of capital. More than that, the AFL’s unions often entered into collusion with the employers to increase and regulate price levels as a means of securing a wage increase. This is a very familiar practice in the building trades industry.
The UAW stated that GM was in a position to grant the 30% increase, not only on the basis of the present prices, but could reduce prices and still make a profit. GM replied with a curt statement that it refused to make profits and prices the subject of bargaining with a union. It based itself upon the established capitalist position that bargaining with a union was the means of collectively “purchasing” labor power and no more. How much production it was able to secure from the workers on the basis of the agreed-upon rates and what prices it charged for its products were not the business of the union, according to this point of view.
But the union went even further than the argument that it was vitally concerned with GM’s profits and prices. It stated that it was advancing the 30 per cent demand as a means of securing high purchasing power for labor and, thereby, contributing to full employment and prosperity for the country as a whole. “... Unless we get a more realistic distribution of America’s wealth, we won’t get enough to keep this machine going,” said Reuther. The union was stating that it was concerned with more than how much its members earned. It was concerned with the entire American economic structure. It was concerned with whether there would be jobs for everyone that would make possible the purchasing power needed to create the market for automobiles to keep UAW members on the job. This was an outlook new to an American trade union. It was fighting not only for its own immediate interests but for the working class at large and, in the last analysis, for the people as a whole. Truly, in the word’s of GM’s Harry Coen, the UAW was fighting for the “whole world.”
The position of the UAW marks a new level of social consciousness for American labor.
The GM-UAW negotiations open a new chapter in the development of the American working class.
The explanation for this new development goes deeper than the war years which gave it its immediate economic stimulus. The roots go back into the economic history of American capitalism and the political history of maturing class relations.
Never has a people suffered such major social shocks within such a compressed time span as did the American people who went through ten yean of the most devastating economic dislocation followed by six years of the most feverish war activity. The worker was caught up in the most paralyzing, far-ranging mass unemployment and the most aggravated, critical manpower shortage. He saw within a short time span the signs on plant gates that read “No Help Wanted” and the nation-wide, high powered advertising campaigns for “Workers – full time, pan time – all the overtime you want – no experience needed – we pay while you learn,” etc. Hardly a year elapsed from the formal closing down of the Works Progress Administration (WPA) to the opening up of the War Manpower Commission with the job freeze and the wage freeze. Within ten years, from 1933 to 1943, the index of industrial activity passed from the lowest possible depths short of economic collapse to the soaring heights that surpassed previously established theoretical capacity.
No people can undergo such shocks without a resulting deep-going transformation of social outlook. The shock of the depression had already been sufficient to break the back of social and economic conservatism and usher in the New Deal with its far-reaching social reforms. The shock had already so deeply affected the working class as to give birth to the CIO and open a new chapter of American labor history. The New Deal and the CIO could hardly be absorbed into a stabilized pattern before the war again thrust the most shaking economic and political questions upon the country. The workers saw full employment replace mass unemployment, all-out production replace economic stagnation, wartime government planning, regulation and intervention replace hopeless peacetime “pump priming” experiments that failed to stimulate private enterprise. In addition, the worker had been deluged with wartime propaganda about the “better life for all” that would follow victory. Not a return to pre-war depression America, but a new, post-war America of peace and plenty was what he had been asked to win the war for.
How much has the working class learned from these tremendous experiences? They most assuredly have learned some simple economic facts which seem so logical to them that they stubbornly refuse to reconcile themselves to any other explanation. They have learned that:
These three fundamental lessons stood behind the demands that the UAW made upon GM. That is why discussion of full employment, “living fifty per cent better,” guaranteed annual wages and similar demands is considered quite normal by the CIO members. The economic development of American capitalism had reached a stage where even the politically-backward American working class could understand that the old demands for “enough to live on” were out of season. It is this which constitutes the vast advance in social consciousness by the working class. They no longer accept status quo economic relationships as sacrosanct. There is a widespread feeling that “something more” is possible.
The UAW answered GM’s plea of inability to pay with the demand that the corporation “open its books.” Implicit in this demand was the third lesson listed above: that industry has the responsibility to provide full employment and a living wage. Implicit in this demand was the contention that whether or not GM worked at one-quarter, one-half or full capacity it was the concern of the union. Implicit in this demand was the contention that whether or not GM was financially able to pay an adequate wage could not be accepted upon its own say-so but had to be publicly established. Implicit in this demand was the contention that a private corporation was not the same as a private home (“A man’s home is his castle”) but rather a public responsibility and subject to public investigation for failure to discharge that obligation.
When reporters asked Reuther whether he would be willing to scale down the union’s demands if an examination of the books revealed an inability to pay, he replied that he would only ask as much as the corporation’s financial standing permitted. This reply revealed the hesitant and inconsistent course which the trade union leaders follow as they traverse the new grounds they have embarked upon. The revolutionary implications of their position from time to time frighten them and they retreat rather than carry it to its logical conclusion.
What is the implication of the demand that a private enterprise, privately owned and operated for private profit “open the books” and pay wages and charge prices based upon what they reveal? Hearst’s New York Daily Mirror gave the correct answer in an alarmed editorial. It stated that this places every private industry in the category of a “public service” and makes its wages, profits and prices subject to public control. This is exactly the position which the UAW and, in greater or lesser degree, the rest of the CIO, is taking. However, Reuther, in the above reply, refused to carry this position to its full logic; namely, that if GM is a “public service” and an examination of its books reveals that it cannot pay a living wage to its employees nor sell to the public at reasonable prices, then such a “public service” forfeits its right to remain in business. The only solution for such openly avowed bankruptcy is to vest ownership in the government and control in the workers for whom the efficient functioning of this industry is a life and death matter. This implication is inherent in the entire situation.
Rather than point to this perspective, Reuther made a retreat and, on the very eve of the strike, called upon the government to intervene as arbitrator. GM refused to be trapped by Reuther’s arbitration offer, which would have made profits and prices subject to negotiations. However, the government, in the person of President Truman, took up Reuther’s call for intervention and used it as the basis for a brazen proposal that the workers go back to work while a government “fact-finding commission” made a study of the matter. Along with this proposal, Truman advocated that Congress pass legislation making such “fact-finding” procedure mandatory in strikes, along with a thirty-day “cooling off” period, during which labor was forbidden to strike.
Truman’s intervention raised the whole dispute to its inevitable level, i.e., the political struggle. This was inevitable precisely because all the questions at stake are political questions. Subjects like profits, prices, “fifty per cent better living,” “a more realistic distribution of wealth,” etc., are settled, in the last analysis by whoever controls the government. Truman’s intervention left no doubt as to who controls the government today. The speed with which Congress, which has only passed a single important piece of legislation in 1945, suddenly sprang into action to push through legislation to hog-tie the trade unions, likewise left no doubt as to where it stood.
The “single important piece of legislation” was the tax bill, which included the repeal of the excess profits tax with a carry-over provision that permits a corporation that earns less than its 1936-39 average during 1946 to receive a rebate of its 1944 and 1945 excess profits taxes up to that amount. Since the difference between normal corporation taxes and the excess profits tax is a difference between forty and eighty-five per cent (i.e., forty-five per cent), GM can remain dosed and get a quarterly check refund from the Treasury Department equal to what it would earn in full operation. In other words. Congress passed a tax law which permits the corporations to insure themselves against any losses while strikebound.
When the present Congress was elected in November 1944, the PAC hailed it as a great victory for labor. Today Congress is running hog-wild in an all-out offensive against labor. All the labor-baiting senators and congressmen are having a field day. Says Representative Cox of Georgia in reference to the strike wave: “The goons have got the country by the tail.”
On its way through the House is the notorious Smith bill which replaces the earlier Smith-Connally law with a more effective anti-labor straitjacket. The Smith bill would take away for one year the bargaining rights of a union which struck during the life of a contract that contained a no-strike clause. It would, further, require a thirty-day “cooling off” period before any strike and would bar unions from using any of their funds for political educational purposes during election campaigns.
While this anti-labor crusade is riding high in Congress, where are the vaunted “friends of labor” whom the CIO’s PAC elected last year? Where are the fearless spokesmen who will defend labor and answer the evil, foul-mouthed slanders of men like Cox? Not a voice is raised in the halls of Congress to defend labor. Here is such crushing proof of the utter failure of the PAC strategy to elect “pro-labor” Democrats that the most thick-skulled unionist must take note.
Truman’s position in the battle of titans could not long remain an obscure one. The deep-seated social issues at stake in the dispute with GM forced the ten-year-old CIO-Democratic alliance to the breaking point – and break it did. Murray’s stinging rebuke to Truman was supported by John L. Lewis, miners’ chieftain, and William Green, doddering AFL boss, who thereby revealed he was not yet entirely senile.
Labor’s break with the Democratic Administration has far-reaching importance. The ascending curve of the class struggle in America makes ever more difficult the alliance between the trade union officialdom and the Democratic Party. The breach with Truman may be patched up and, the CIO may embark upon a campaign to unseat the “reactionaries” in the Democratic Party during the 1946 primaries. But the reconciliation will find no stability. The GM workers are only the first of labor’s battalions on the battle field. Steel, rubber, electrical and radio and millions of other workers in the mass production industries stand poised to follow at the decisive moment. Each accentuation of the class struggle will place a new strain upon the alliance of labor with capitalist politicians.
The social, economic and political ramifications of the GM situation are most profound. Truly, this is no ordinary strike.
Last updated on 18 November 2016