The Rate of Exploitation of Workers at Bombardier, 2018, One of the Largest Private Employers in Quebec and in Toronto, Ontario: Or: How Unionized Jobs are Not Decent or Good

Introduction

In two others posts I presented a list of some of the largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and Quebec (see A Short List of the Largest Employers in Quebec According to the Number of Employees).

I have tried to calculate the rate of exploitation of workers in various companies for these two areas, including Air Canada (The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada) and the Royal Bank of Canada (Banque Royale du Canada) (The Rate of Exploitation of the Workers of the Royal Bank of Canada (RBC), One of the Largest Private Employers in Toronto and in Canada).

Bombardier, the aircraft manufacturer, is also on both lists for Toronto and Quebec. I will calculate the rate of exploitation for this capitalist company not only for this reason. In the documentary Company Town, one worke Jennifer Akkermanr, who was going to lose her job at the General Motors (GM) plant in Oshawa when it was to close on December 18, 2019) indicated that she liked her job when working for GM but that she was going to work for Bombardier. I calculated, using fairly rough data, the rate of exploitation of GM workers in order to show that workers who claim that they enjoy their jobs at GM, in effect (even if they are unconscious of it) are claiming that they enjoy their exploitative jobs at GM.

I thought it appropriate to calculate the rate of exploitation of Bombardier workers to see to what extent the rates of exploitation of workers at GM and at Bombardier differed, if at all.

I used data from 2018 rather than 2019 to calculate the rate of exploitation of Bombardier workers because, in 2019, there seemed to be no calculable rate of exploitation since in 2019 there was an actual profit loss. Unless there are specific reasons for including abnormal years, it is better to calculate the rate of exploitation using more normal data. Besides, any company that operates at a constant loss by failing to exploit workers will cease to exist after a certain period of time.

Of course, if the rate of exploitation is calculated for a number of years, then losses need to be included. I have not found any books or articles that deal with how to handle such losses in calculating the rate of exploitation for such a year. It is, in any case, probably better to include such years in a multi-year calculation of the rate of exploitation in order to gain a more accurate view of the rate of exploitation in the medium- and long-term. Perhaps some readers can provide suggestions on how to do so.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion

To calculate the rate of surplus value, we need to divide “Surplus value (s) or Adjusted EBIT” by “Variable capital (v) or Adjusted Employee benefit costs.”

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=969/5,432=18%.

That means that for every hour worked that produces her/his wage, a worker at Bombardier works around an additional 11 minutes for free for Bombardier.

In an 8-hour (480 minutes) work day, the worker produces her/his wage in 6 hours 47 minutes (407 minutes) and works 1 hour 13 minutes (73 minutes) for free for Bombardier. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and Employers as Dictators, Part One).

In an 8.67 hour or 8-hour 40 minutes (520 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 19minutes (79 minutes) for free for Bombardier.

In a 9-hour (540 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 22 minutes (82 minutes) for free for Bombardier.

In an 10-hour (600 minutes) work day, the worker produces her/his wage in 8 hours 28 minutes (508 minutes) and works 1 hour 32 minutes (92 minutes) for free for Bombardier.

In a 10.67 -hour or 10-hour 40 minutes (640 minutes) work day, the worker produces her/his wage in 9 hours 2 minutes (542 minutes) and works 1 hour 38 minutes (98 minutes) for free for Bombardier.

In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 21 minutes (610 minutes) and works 1 hour 50 minutes (110 minutes) for free for Bombardier.

Again, the rate of exploitation measures the extent to which workers work for free, producing all the surplus value and hence all the profit for employers. However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well.

Do you think that these facts contradict the talk by the left and unionists of “”fair contracts” (see Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One and Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for this rhetoric of the largest unions in Canada, the Canadian Union of Public Employees (CUPE) and Unifor) , “fair wages” and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in workers’ lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? Do the left? If not, why not? Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected?

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT (2019-2022) BETWEEN Bombardier Inc. hereinafter referred to as “the Employer” AND Unifor

ARTICLE 3 MANAGEMENT RIGHTS

3.01 No provision of the Collective Agreement shall be interpreted as limiting the Employer in any way in the exercise of its management functions. These functions are performed in a manner consistent with all the provisions of this Agreement. It is the function of the Employer to administer and manage the company and lead the workforce. Without restricting the generality of the foregoing, its rights and functions include:

a) The responsibility for the management, operation, extension and curtailment of business and operations; the authority to direct, transfer, promote, demote, discipline and discharge employees for proper cause; the right to organize and supervise the work to be performed by the employees, to direct them in the course of their work, to maintain discipline, order and efficiency, to determine the products to be manufactured and their design, the methods, processes and means of manufacturing and operating, the type and location of machines and tools to be used, to determine production standards and the type and quality of materials to be used in manufacturing. Notwithstanding the above, these rights and functions do not prevent any employee who considers himself to have been unfairly treated to lodge a grievance in accordance with the provisions stated in this Agreement

Should workers not be discussing why management has these rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” A “decent job?” A “good job?” All other such platitudes?

Comparison of the Rate of Exploitation of Bombardier Workers to the Rate of Exploitation of Other Workers

The rate of exploitation of Bombardier workers is quite low relative to other workers (see the comparison of the rate of exploitaiton of various sets of workers in The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Although there are other factors or determinants in establishing whether a private-sector employer is viable or not, a relatively low rate of exploitation is certainly one possible indication of its possible bankruptcy; there is little wonder that in 2019 Bombardier faced a loss of profit. Its efforts to restructure itself as a consequence undoubtedly involved possible attempts to increase the rate of exploitation. Perhaps a comparison of the 2018 rate and the 2022 or 2023 rate of exploitation would be appropriate at some point to see if such restructuring is reflected in an increased rate of exploitation.

In relation to the rate of exploitation of General Motors (GM) workers, Bombardier workers are exploited less since the rate of exploitation of GM workers is 40 percent. Does that mean that Bombardier workers experience substantially more freedom than GM workers? Hardly. From the point of view of the continued existence of the workers at a certain standard of living (it does not mean that the standard of living that they receive is adequate). Higher rates of exploitation mean, among other things, that the need to work for a certain relative proportion of the working day is relatively unnecessary when compared to another set of workers in order to produce the value of the workers’ consumer goods (means of consumption).

A low rate of exploitation means that the particular employer may be threatened with bankruptcy–and hence the workers may be threatened with unemployment. From Nick Potts (2009), “Trying to Help Rescue Value for Everyone,” in pages 177-199, Critique: Journal of
Socialist Theory, Volume 37, Issue Number 2, 177-19 page 192:

Clearly if exploitation were to drop too low a crisis of profitability would occur.

This is hardly in their own immediate or short-term interests since they, in general need to work for an employer if they are to continue to live at a certain standard of living, This is a dilemma which private-sector workers and unions face (and, indirectly, public-sector workers and their unions) since attempts to change working conditions (such as the level of intensity or the length of the working day) and pay may well have negative effects on the rate of exploitaiton and the rate of profit, leading to bankruptcy. Workers cannot resolve such dilemmas without challenging the class power of employers–and unions cannot either, despite all the chatter of “fair contracts,” “decent wages,” “good jobs,” “decent work,” and other such cliches.

On the other hand, a high rate of exploitation does not mean that workers’s immediate interests are somehow met. In addition to having a greater proportion of labour or work going to the employer relative to the worker, the higher rate of exploitation may imply greater unemployment for workers since the issue of how this high rate of exploitation is achieved arises. If it arises due to massive increases in investment in constant capital relative to variable capital (and thereby increased in the productivity of labour), it may well occur that workers may become unemployed as the proportion of relative investment in c crowds out investment in v.

Nonetheless, in the short term, a higher rate of exploitation in a particular company may initially result in somewhat stable employment as the company may be able to compete more effectively against other capitalist companies. To that extent, Jennifer Akkerman’s reference to ‘loving her job’ may contain a grain of truth–short-term employment stability.

Alternatively, if the higher rate of exploitation occurs more or less throughout the economy, the workers who produce consumer goods (such as cars and trucks, as do GM workers), may find themselves unemployed as the commodities they produce remain unsold.

It is ironic that it may be in the workers’ short-term interests to want a high rate of exploitation in order to achieve some form of employment stability; that this may clash with their long-term interests does not change the situation. The dilemma of not being exploited at all and being unemployed, of being highly exploited with some employment stabiity and being little exploited (but still oppressed) with the threat of unemployment hanging over workers’ heads hardly makes for a “good job” or “fair contracts.”

It is time to challenge unions that persistently present, unconsciously if not concsiously, claims that they can somehow achieve any fair settlement, whether wages or working conditions, and whether through legislation or through collective bargaining and the resulting collective agreement. Thus, should not leftists persistently criticize such views as the following (

https://www.newswire.ca/news-releases/unifor-reaches-tentative-agreement-with-bombardier-aviation-851709617.html):

TORONTO, July 30, 2021 /CNW/ – Unifor Local 112 and 673 have reached a tentative agreement with Bombardier Aviation. “I would like to congratulate the Local 112 and 673 bargaining teams for their hard work and dedication throughout these negotiations,” said Jerry Dias, Unifor National President. “Reaching a settlement with Bombardier brings us one step closer to resolving the labour dispute at Downsview. Our union can now focus all of its efforts on reaching an agreement with De Havilland.”

Unifor member with Unifor flag outside of Bombardier Aviation Downsview plant (CNW Group/Unifor)

The three-year agreements cover approximately 1,500 union members employed by Bombardier Aviation at the Downsview plant.

“We could not have reached a fair settlement that addresses the union’s key priorities at Bombardier without the support and solidarity of our members throughout the bargaining process and on the picket lines,” said Scott McIlmoyle, Unifor Local 112 President. [my emphasis]

Have you ever read any justification by union reps for such terms as a “fair settlement,” “fair contract,” “fair collective agreement,” ‘fair wages,” and so forth? If not, why not?

Should not union reps be obliged to answer such questions?

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

In the case of Bombardier, I have had some difficulty in reconciling numbers related to interest. I will show this below.

But first, let us look at the general calculation:

Surplus Value (Profit)

EBIT: Earnings before interest and taxes (or: Profitability: Revenues-Costs or Expenses)
Revenues$ 16,236
Cost of sales 13,958
Gross margin 2,278 [16,236-13,958]
SG&A (Selling, General and Administrative Expenses) 1,156
R&D (Research and Development) 217
Share of income of joint ventures and associates (66)
Other expense (income) (58)
EBIT before Special Items (Earnings before Interest and taxes) (2) 1,029 [2,278-1156-217+66+58=1029]
Special items 28
EBIT 1001 (1029-28=1001)

Non-adjustment of EBT by Excluding Special Items from the Calculation

Clarification of the nature of the category “Special Items” in the Annual Report is as follows:

Special items

Special items comprise items which do not reflect our core performance or where their separate presentation will assist users in understanding our results for the period. Such items include, among others, the impact of restructuring charges and significant impairment charges and reversals.

There exists several items in this category. To go over each item and decide whether it should be excluded or included (without further information) seems an exercise for those with accounting skills–I invite them to provide a rational for including any or all of the items; I exclude the category in its entirety from the calculation.

Consequently, so far the EBIT is 1,001. Now, particular employers treat the need to pay interest as an expense–which it is from the point of view of the particular employer. Accordingly, there is an additional category: EBT, or Earnings Before Taxes:

EBT (Earnings before taxes)
Interest
Financing expense 712
Financing income (106) [This is actual income received and hence is in parentheses since it is not really an expense but the opposite and must be subtracted from “Financing expense”.)
Net financing expense 606 (712-106=606)
EBT (Earnings before taxes) (EBIT (1001)-Net financing expense (606)) 395

Adjustments

I will treat, theoretically, the two categories “Financing expense” and “Financing income” separately, and only then will I make the necessary adjustements.

Financing Expense

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest). When they are expenses at the macro level of the class of employers and not just at the micro level of the particular employer, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

For example, interest is such a category.

As I wrote in another post:

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value.

Accordingly, it is EBIT and not EBT that should form the basis for determining the surplus value produced since interest is derived from surplus value–although it is an expense from the point of view of the particular employer.

Financing Income

The category “Financing Income” is income that is a result of, among other things, investment in securities. Since, as I explained in the post on the rate of exploitation of General Motors workers,

Since the idea of calculating the rate of exploitation of particular employers is to determine the extent to which the particular employer exploits its workers, income derived from the exploitation of workers other than its workers should be excluded.

Accordingly, the amount included in this category does indeed need to be subtracted from EBIT since it is surplus value arising from the exploitation of workers other than Bombardier workers.

Temporary Adjusted Earnings Before Income Taxes 895 (1001-106)

Further adjustments of EBIT must await the calculation of variable capital, or the total cost of producing the commodity labour power, or the capacity of labour power.

Variable Capital

Presumably, the following data form part of the category “Cost of Sales.”

EMPLOYEE BENEFIT COSTS
Wages, salaries and other employee benefits $ 4,919
Retirement benefits 464
Share-based expense 74
Restructuring, severance and other involuntary termination costs 46
Total $ 5,503

To explain the nature of the category “Share-based expenses.” it is first necessary to indicate the word form of the acronyms PSU, RSU and DSU:

PSU Performance share unit
RSU Restricted share unit
DSU Deferred share unit

The annual report indicates the nature of these:

SHARE-BASED PLANS

PSU, DSU and RSU plans
The Board of Directors of the Corporation approved a PSU and a RSU plan under which PSUs and RSUs may be granted to executives and other designated employees. The PSUs and the RSUs give recipients the right, upon vesting, to receive a certain number of the Corporation’s Class B Shares (subordinate voting). The RSUs also give certain recipients the right to receive a cash payment equal to the value of the RSUs. The Board of Directors of the Corporation has also approved a DSU plan under which DSUs may be granted to senior officers. The DSU plan is similar to the PSU plan, except that their exercise can only occur upon retirement or termination of employment.

It seems clear that the money allocated to the category is limited to select employees–unlike some annual reports, where it was unclear whether regular workers had access to share-based programs or not (see for example The Rate of Exploitation of Workers at WestJet Airlines Ltd.). The reasoning for including some (if not all) of it as part of surplus value is that this compensation is not mainly for the coordination of the work of others but for the exploitation of others–it is pure surplus value.

If it was unclear whether the category was limited to those who exploit other workers, I merely calculated 10 percent of the total as forming surplus value, leaving 90 percent to form part of variable capital. In the case of Bombardier, though, the total amount of 74 million seems to be earmarked exclusively for key employees who exploit other workers.

Accordingly, it is necessary to subtract 74 from “Employee benefit costs” and add it to EBIT:

Adjusted EBIT or Surplus Value (Profit) 969 (895+74)
Temporarily Adjusted Employee benefit costs (variable capital, v) 5,429 (5,503-74)

Further Adjustment of Variable Capital (Wages and Benefits)

There is a list of items in the category “Other expense (income).” One of the items needs to be shifted to be included in the calculation of variable capital:

“Severance and other involuntary termination costs (including changes in estimates)” 3.

Since the shift is within the general category of “Expenses,” it does not affect the calculation of surplus value and hence profit; the category “Cost of sales” would increase by 3, from 13,958 to 13,961, and the category “Other expense (income) (58)” would decrease by 3, from (58) to 55, with the result that the EBIT would not change.

However, it does affect the calculation of variable capital and hence the rate of surplus value or the rate of exploitation. We now have sufficient information to calculate the rate of exploitation or the rate of surplus value.

Final Calculation (Based on Adjustments) of Surplus Value, Variable Capital (Salaries or Wages and Benefits) and the Rate of Surplus Value

The result of all of these adjustments is:

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion

To calculate the rate of surplus value, we need to divide “Surplus value (s) or Adjusted EBIT” by “Variable capital (v) or Adjusted Employee benefit costs.”

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=969/5,432=18%.

That means that for every hour worked that produces her/his wage, a worker at Bombardier works around an additional 11 minutes for free for Bombardier.

In an 8.67 hour or 8-hour 40 minutes (520 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 19minutes (79 minutes) for free for Bombardier.

In a 9-hour (540 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 22 minutes (82 minutes) for free for Bombardier.

In an 10-hour (600 minutes) work day, the worker produces her/his wage in 8 hours 28 minutes (508 minutes) and works 1 hour 32 minutes (92 minutes) for free for Bombardier.

In a 10.67 -hour or 10-hour 40 minutes (640 minutes) work day, the worker produces her/his wage in 9 hours 2 minutes (542 minutes) and works 1 hour 38 minutes (98 minutes) for free for Bombardier
In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 21 minutes (610 minutes) and works 1 hour 50 minutes (110 minutes) for free for Bombardier.

I have used the lengths of the working day as 8, 8.67, 9, 10, 10.67 and 12 because the length of the working day varies. According to different sources:

Working hours are 8:00am – 4:40pm

12hr shifts

The hours that I worked were from 7:00 am to 7:00 pm Friday Saturday & Sunday and possibly coming in 2 hours early on Saturday & Sunday and or possibly staying late Friday thru Sunday depending whether or not we had a customer who had to leave early or late in the evening.

8-9 hours per day.

8 to 10 hours a day

I worked eight hours a day

The 2019-2022 collective agreement between Bombardier and Unifor Local 62 states:

ARTICLE 14 WORK SCHEDULES

14.01 The Employer determines the use of the different work schedules provided in article 14.08 according to the operational needs.

14.02 Unless otherwise stipulated in this Agreement, the normal work week is forty (40) hours.

14.03 The work week for employees on the first (1st) shift (schedule 1-A and 1-B) is of forty (40) hours distributed on five (5) consecutive days of eight (8) hours from Monday to Friday
…

The work week for employees on the first (1st) shift (schedule 1-C and D) is of forty (40) hours distributed over four (4) consecutive days of ten (10) hours from Monday to Thursday or Tuesday to Friday

…

14.05 The work week for employees on the third (3rd) shift (schedule 3) is of thirty-six (36) hours, distributed on four (4) consecutive nights of nine (9) hours from Monday night to Friday morning, paid as forty (40) hours.

…

14.06 The work week for employees on the weekend day shift (schedule 4-A et 4-B) is of thirty-six (36) hours, distributed on three (3) consecutive days of twelve (12) hours, as follows: Saturday, Sunday and Friday Saturday, Sunday and Monday, paid for forty-two (42) hours.

…

14.07 The work week for employees on the weekend night shift (schedule 5) if of thirty-two (32) hours, distributed on three (3) consecutive evenings as follows: twelve (12) hours on Saturday and Sunday, and eight (8) hours on Friday [32 hours divided by 3=10.67 hours or 10 hours 40 minutes]. The employees are paid for forty (40) hours including the night premium.

Political Considerations and Conclusion

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not? Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT (2019-2022) BETWEEN Bombardier Inc. hereinafter referred to as “the Employer” AND Unifor

ARTICLE 3 MANAGEMENT RIGHTS

3.01 No provision of the Collective Agreement shall be interpreted as limiting the Employer in any way in the exercise of its management functions. These functions are performed in a manner consistent with all the provisions of this Agreement. It is the function of the Employer to administer and manage the company and lead the workforce. Without restricting the generality of the foregoing, its rights and functions include:

a) The responsibility for the management, operation, extension and curtailment of business and operations; the authority to direct, transfer, promote, demote, discipline and discharge employees for proper cause; the right to organize and supervise the work to be performed by the employees, to direct them in the course of their work, to maintain discipline, order and efficiency, to determine the products to be manufactured and their design, the methods, processes and means of manufacturing and operating, the type and location of machines and tools to be used, to determine production standards and the type and quality of materials to be used in manufacturing. Notwithstanding the above, these rights and functions do not prevent any employee who considers himself to have been unfairly treated to lodge a grievance in accordance with the provisions stated in this Agreement

The collective agreement fosters the illusion that the workers are paid for the whole working day. Workers may indeed receive more wages under certain circumstances, but that means that the cost of production of their capacity for working for an employer increases (perhaps due to an accelerated use of their labour power). This consideration, however, is irrelevant here since the total wages, salaries and benefits is what matters, and any increase in v due to such considerations are included in the data.

Comparison of Rates of Exploitation

In relation to the rate of exploitation of General Motors (GM) workers, Bombardier workers are exploited less since the rate of exploitation of GM workers is 40 percent. Does that mean that Bombardier workers experience substantially more freedom than GM workers? Hardly. Higher rates of exploitation mean that the need to work for a certain length of the working day is relatively unnecessary when compared to another set of workers from the point of view of the continued existence of the workers at a certain standard of living (it does not mean that the standard of living that they receive is adequate).

A low rate of exploitation means that the particular employer may be threatened with bankruptcy–and hence the workers may be threatened with unemployment. From Nick Potts (2009), “Trying to Help Rescue Value for Everyone,” in pages 177-199, Critique: Journal of Socialist Theory, Volume 37, Issue Number 2, page 192:

Clearly if exploitation were to drop too low a crisis of profitability would occur.

From Guglielmo Carchedi and Michael Roberts, “The Long Roots of the Present Crisis: Keynesians, Austerians, and Marx’s Law,” in World in Crisis: A Global Analysis of Marx’s Law of Profitability. Edited by Carchedit and Roberts:

The question is whether an increase in the rate of profit due to a sufficiently high rate of exploitation is a step toward recovery.

A recovery presupposes the rise in the new value generated within the context of a rising ARP [average rate of profit]. A pro-capital distribution of value within the context of a falling ARP can revive the ARP, but this does not denote a recovery. This higher profitability hides the decreasing production of value and surplus value—that is, it hides the deterioration of the economy.

A more detailed way to approach this is is by considering the two basic sectors of the economy. Sector 1 produces means of production [Bombardier primarily belongs to this sector since it produces jets] , and sector 2 produces means of consumption [GM primarly produces in this sector–although a smaller proporition of vehicle production undoubtedly serves as means of production as well]. If one or both sectors innovate, usually the OCC rises and the ARP falls. All sectors realize tendentially the same, but lower, rate of profit. The capitalists might react to the lower ARP by lowering the level of wages, that is, by increasing the rate of exploitation across the board. This upsets the initial tendential equalization of the profit rates. But this equalization presupposes full realization [full sale of the commodities produced], which is impossible if stopping or reversing the fall in the ARP is to be achieved by raising the rate of exploitation.

Suppose wages are reduced by the same percentage, Δ symbol for a change in something], both in sector 1 and in sector 2, represented by the equation –Δv1 = –Δv2 [the percentage change decrease in variable capital is the same in both sectors 1 and 2]. Then, sector 1 gains Δs1 (corresponding to the fall in wages, –Δs1 [sic–which means that the quoter quotes exactly as written despite a possible error in the original: this should be the negative percentage change in v1]) [the percentage change increase in surplus value in sector 1 . Sector 2 on the one hand gains Δs2 (corresponding to the fall in wages, –Δv2) but on the other loses –(Δs1 + Δs2), the loss due to the unsold means of consumption to the workers both of sector 1 and of sector 2 [sector 2 loses because the levels of v1 and v2 have decreased with the result that they cannot purchase means of consumption equal to their loss]. On balance, sector 2 loses –Δs1, which is sector 1’s gain. Means of consumption for a value of Δs1 are unsold. This is overproduction in sector 2.

The ARP is unchanged (what is lost by one sector is gained by the other), but the two rates of profit differ: that in sector 1 has risen by Δs1, while that in sector 2 has fallen by the same quantity. The greater the fall in wages, the greater the fall of profitability in sector 2. This spells crisis in sector 2. Sector 1’s rate of profit rises. But this is not a sign of recovery in that sector. Sector 1’s rate of profit rises not because more value and surplus value is produced in it, but because surplus value is appropriated from sector 2 within the context of a hidden fall in the ARP. Wage cuts can, at most, postpone the crisis.

(I have some doubts about the theoretical accuracy of the above quote. The assumption of equal percentage increases in s and equal percentage decreases in v seems to assume a 100 percent rate of exploitation; if, however, the rate of exploitation is, say, 400 percent, s:v=4:1, so if s is 100, v is 25. If s increases in percentage terms by 25% to 125, a decrease in percentage terms of v by 25 percent is 6.25 (25 percent of 25 is 6.25). I will leave the issue to those who are better equipped in mathematics to determine its accuracy. Perhaps others can enlighten us by providing critical commentary.)

Conclusion

https://www.newswire.ca/news-releases/unifor-reaches-tentative-agreement-with-bombardier-aviation-851709617.html):

TORONTO, July 30, 2021 /CNW/ – Unifor Local 112 and 673 have reached a tentative agreement with Bombardier Aviation. “I would like to congratulate the Local 112 and 673 bargaining teams for their hard work and dedication throughout these negotiations,” said Jerry Dias, Unifor National President. “Reaching a settlement with Bombardier brings us one step closer to resolving the labour dispute at Downsview. Our union can now focus all of its efforts on reaching an agreement with De Havilland.”

The three-year agreements cover approximately 1,500 union members employed by Bombardier Aviation at the Downsview plant.

“We could not have reached a fair settlement that addresses the union’s key priorities at Bombardier without the support and solidarity of our members throughout the bargaining process and on the picket lines,” said Scott McIlmoyle, Unifor Local 112 President. [my emphasis]

Have you ever read any justification by union reps for such terms as a “fair settlement,” “fair contract,” “fair collective agreement,” ‘fair wages,” and so forth? If not, why not?

Should not union reps be obliged to answer such questions?

Transparency in Collective Bargaining: A Necessary but Insufficient Condition for Democratic and Rational Working-Class Practice

Rebecca Keetch wrote an article that was posted on the Socialist Project’s website on transparency and collective bargaining (https://socialistproject.ca/2020/09/canadian-auto-workers-fight-for-contract-transparency/). Ms. Keetch was a former GM worker at Oshawa, Ontario, Canada, and she is a member and activist of Green Jobs Oshawa.

Ms. Keetch advocates for transparent bargaining in a form similar to what I tried to do when I was a member of the negotiating committee for the support workers of the Prince George School District No. 57, in Prince George, British Columbia, Canada (see Reform or Abolition of the Police, Part One). Not only must we present to our unionized fellow workers the proposals that we have tentatively negotiated but also what we have been unsuccessful in negotiating or had to modify in the process:

As bargaining at the Detroit Three automakers kicks off in Canada, union members are fighting back against a longstanding undemocratic contract ratification process. In an unprecedented development, the Solidarity Movement, a rank-and-file movement within Unifor, has launched a petition to demand full disclosure of the collective agreement before voting takes place. Since the launch in early August, more than 1,800 members have signed.
…
The petition calls on Unifor leadership to “provide full disclosure of the contents of the contract, five days before ratification, by publishing all revisions, additions, deletions, and changes to the contract, clearly marked, on the Unifor National website and the websites of the locals involved in ‘Detroit Three’ bargaining.” It also requests “that the ratification highlights include a clear statement of all money and benefits negotiated on behalf of union representatives and any money or benefits negotiated to be paid to the Locals and/or National Union.”
In the US, the United Auto Workers publishes the full contract with all changes on its website where Detroit Three members can read it before they go to their ratification/information meetings — a long-time demand of American union reformers. The UAW began posting the tentative Detroit Three contracts online in 2011.

This movement to create transparency is to be welcomed. Workers deserve to be able to see what negotiators have done on their behalf before making a decision on whether to ratify the collective agreement or to reject it. It is their lives, and they have a right to make decisions concerning its direction and quality as far as is humanly possible.

Ms. Keetch certainly is moving in a more democratic position when she writes:

The members’ concerns should be acknowledged, not simply dismissed. Real democracy means taking our lead from the members.

She then outlines the procedures used in typical undemocratic collective bargaining:

Historically, auto negotiations are secretive. Once contract demands are collected by leadership, workers are nearly shut out of bargaining, which takes place behind closed doors. At the completion of bargaining, information/ratification meetings are immediately scheduled.
As members enter the meeting, they are given a handout called a “Bargaining Report.” The Bargaining Report contains highlights of the tentative agreement and includes messages from the national president and other leaders encouraging ratification. Union leadership and staff make a presentation on the highlights of the agreement. Members are given limited time and opportunity to ask questions and no opportunity to meaningfully discuss the agreement with each other before being required to vote. Historically, voting has taken place at the information meeting.

She then argues that the Constitution of Unifor is supposed to be democratic and that it is necessary for it be in reality democratic rather than just formally:

Democracy In The Constitution
The Unifor constitution makes it clear that Unifor is intended to be a democratic organization and that the members are meant to control the union. Article 2, Section 1 states, “Unifor is a voluntary organization that belongs to its members. It is controlled by members and driven by members. Its role is to serve their collective interests in the workplace and in our communities. The life of Unifor is shaped by the essential ingredient of democratic participation. Democratic values are the foundation of all that we do. Our commitment to the principles and practices of democratic unionism define who we are and are reflected in our rules, structures, and processes.”
Our constitution cannot just be words on paper. If union leadership doesn’t live and breathe to empower and engage the membership, if leadership limits worker agency, participation, discussion, and debate, then the inevitable outcome is a weak, disempowered membership that can’t fight back when the bosses are trying to walk all over us.
Unifor members are often told to just trust our leadership. But ratifying a collective agreement isn’t about rubberstamping whatever the leadership brings. If that were the case, why would we even go to the time and trouble of having a ratification vote? With technology today, it couldn’t be cheaper or easier to make the contract available ahead of ratification.

The democratization of the collective bargaining process at the level of the local is certainly necessary. However, even if it were democratized, the result would not overcome limitations which Ms. Keetch does not address.

She makes the following claim:

Though the collective agreement is one of the most important documents to shape a worker’s life, Canadian auto workers at General Motors, Fiat-Chrysler, and Ford are not allowed to see it before we are asked to ratify it. Unifor, the largest private sector union in Canada, represents nearly 17,000 auto workers at the Detroit Three.

Technically, as a document, the collective agreement does indeed shape a worker’s life–by limiting what the employer can do. From a worker’s perspective, it is, on the one hand, a a tool for limiting the power of management and, on the other, an expression of monetary remuneration and benefits for transferring the power of control over the worker’s life, temporarily, to the employer.

Ms. Keetch’s critique of the collective bargaining process is more advanced than Brian Forbes’ implicit defense of typical collective-bargaining procedures (see the article “Critique of Collective-Bargaining Models in Canada” found in the Publications and Writings section of this blog) since Mr. Forbes fails to criticize the traditional anti-democratic model of collective bargaining.

However, what if you democratize a process in the context of a situation that is undemocratic? Ms. Keetch nowhere explores the limitations as such of the collective bargaining process and the resulting collective agreement in the context of a class of employers. How does this context “shape a worker’s life?” Is this context more or less important than the collective agreement?

Readers who have read some of my posts will already know my answer: the context of a class of employers and the associated economic and political structures influences workers’ lives much more than any collective agreement. The level of influence of this context can be seen explicitly seen in various managements rights’ clauses in collective agreements (see, for example, Management Rights, Part One: Private Sector Collective Agreement, British Columbia or Management Rights, Part Two: Public Sector Collective Agreement, Ontario). This lack of reference to this class situation will at most enable particular workers working for particular employers to limit their particular employer’s power in the best way possible without moving towards threatening the power of employers as a class.

Transparency is not only necessary at the level of the particular employer but at the macro level of the class economy. Mr. Keetch’s reference to democracy needs to involve both micro and macro level transparency if workers are to make rational decisions concerning the working lives and the purpose of their organizations.

At the micro level, even if there were complete transparency during collective bargaining, how would workers decide on what to do if they took no or little account of the macro structure that involves treating them as impersonal means for impersonal ends (see The Money Circuit of Capital).

Should there not be open discussion about the kind of economy that exists in order for workers to make rational decisions about the adequacy of collective agreements in meeting their lives, both inside and outside work? To exclude transparency in the wider situation is like looking at the hand and treating it as if it were the whole body. The hand may look to be in perfect condition, but not when linked to a body that has invasive cancer in the bladder, or rectal cancer or metastatic liver cancer.

Nor can any collective agreement be considered a fair contract without considering the context of exploitation and oppression characteristic of the general situation of workers–whether in the public or private sectors (see various posts on management rights in both the public and private sectors on this blog. See also such posts as Employers as Dictators, Part One , The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One and The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).

It is thus questionable whether collective bargaining can really be transparent if the wider picture of the general economic and political structure is excluded. If the purpose of transparency of the collective-bargaining process at the micro level is to ensure that workers make democratic and rational decisions concerning their lives, it is necessary to move towards macro transparency.

The purpose of this blog is, in part, to move in that direction. If others wish to do so as well, they are most welcome to do so on this blog or by providing links to their own blogs or other resources.

Review of Jane McAlevey’s “A Collective Bargain: Unions, Organizing, and the Fight for Democracy”: Two Steps Backward and One Step Forward, Part Two

This is the continuation of a post that reviews Jane McAlevey’s latest book entitled A Collective Bargain: Unions, Organizing, and the Fight for Democracy.

In the last post, I showed that Ms. McAlevey exaggerates the extent to which strikes and collective bargaining can offset the power imbalance between the class of employers and the working class. In this post, I will show that Ms. McAlevey’s point of view is definitely social democratic or social reformist.

She writes the following in her book:

There’s nothing neutral about suicide nets; there’s nothing inevitable about creating a greater climate crisis by offshoring jobs so ships bigger than small towns cross oceans, killing the ecosystem and creating a need for more fuel; there’s nothing comforting about creating millions of close-to-slavery working conditions in faraway lands that Americans can’t see when they happily upgrade to the latest phone. We don’t need robots to care for the aging population. We need the rich to pay their taxes. We need unions to level the power of corporations.

This call for corporations to pay taxes–certainly, corporations should be forced to pay more taxes, but the implication here is that if corporations did pay more taxes, there would be a fair system. I will criticize this social-democratic view in another post, where I will criticize the Canadian social-democratic call for corporations to pay their “fair share” of taxes? Corporations need to be taken over by workers if they are to control their own lives since corporations form part of the economic structure that expresses a kind of economy where workers are controlled by their own products rather than the workers controlling their own products.

In the quotation above,there is a further problem that illustrates Ms. McAlevey’s social-democratic approach. She refers to the need for “unions [in order] to level the power of corporations.” How does the existence of unions “level the power of corporations?” To conclude this is to exaggerate the capacity of unions to challenge the employers as a class. The unions in the 1930s did not “level the power of corporations.” Ms. McAlevey provides no evidence that they did. They limited the power of corporations, but it is bullshit to say that unions have or can level the power of corporations. Such a view ignores the power of employers to dictate what to produce, how to produce, when to produce and so forth. I worked in several unionized environments, both private and public, and I failed each time to see how unions even approached the power necessary to “level the power of corporations.

As I showed in my review of Ms. McAlevey,’s earlier book, No Short Cuts: Prganizing for Power in the New Gilded Age (found in the Publications and Writings section of this blog), Ms. McAlevey claims incorrectly that, when workers organize at the firm level, there is no difference between structural power and the power of agents. She confuses the micro level of organizing with the macro level of the capitalist economy as a whole. In her most recent book, she ignores altogether the difference and merely assumes what she needs to prove: that organized workers at the level of the firm or corporation somehow magically control their own lives and are equal in power to corporations.

Ms. McAlevey’s view concerning unions and their supposed power to level the playing field merely echos Canadian liberal sentiments, such as expressed in the work Reconcilable Differences: New Directions in Canadian Labour Law, by Paul Weiler (1980).

Furthermore, as a number of posts have shown (see for example Management Rights, Part One: Private Sector Collective Agreement, British Columbia), the management rights clause in collective agreements provides management, as the representatives of employers, with wide powers; collective agreements do not question such power but only limit it. Even when a collective agreement does not have an explicit management rights clause, arbitration boards have indicated that there is an implicit management rights clause. Ms. McAlevey conveniently ignores such facts and thereby idealizes the power of unions, the power of collective bargaining and the power of collective agreements.

In another post, I pointed out how, in the context of health and safety, one union representative admitted the limited power of unions (see Confessions of a Union Representative Concerning the Real Power of Employers).

Ms. McAlevey’s confusion of the micro and the macro extends to her exaggerated claims concerning the extent to which workers gain from strikes directed against a particular employer. She often uses the term “big” when referring to wins by workers and unions. From the introduction:

Chapter 1 discusses three such examples of women winning big.

…

To win big, we have to follow the methods of spending very little time engaging with people who already agree, and devote most of our time to the harder work of helping people who do not agree come to understand who is really to blame for the pain in their lives. Pulling off a big, successful strike means talking to everyone, working through hard conversations, over and over, until everyone agrees. All-out strikes then produce something else desperately needed today: clarity about the two sides of any issue. Big strikes are political education, bigly.

It is certainly an innovation to focus on winning over those who disagree with us–the left often are a clique that simply address themselves. However, this constant reference to winning big hides the fact that even more important and wider successes are considered big wins rather than skirmishes that should lead towards the overthrow of corporate power. Divorced from such a movement, they can hardly be considered “big wins.” Only those who have faith in the legitimacy of the collective bargaining system to produce fair results could use such a term as “big.”

Nowhere does Ms. McAlevey question corporate power as such but assumes its legitimacy.

Just as Ms. McAlevey confuses power at the micro level with power at the macro level in relation to unions, collective bargaining and collective agreements, she confuses the levels of power when it comes to identifying problems related to the environment. She writes:

There’s plenty of money to make a Green New Deal happen. Investigative journalist Christian Parenti has recently pointed out that corporations are currently sitting on $4.8 trillion in cash—a subset of $22.1 trillion they hoard. That money could be used to quickly transition the economy to a robust unionized green economy, one that can reproduce a dignified quality of life for workers of the future and end the destructive jobs-versus-the-environment debate. But to access that money, it takes real power and know-how—the kind of authority that unions in New York still have, along with a few other major states. To rebuild union power elsewhere, the environmental movement will have to stand up and fight alongside them—really fight, not just talk about green jobs. That means actively throwing their support behind workers’ right to strike and actively backing workers. That kind of organizing and the power it builds will be necessary to raise taxes on the rich (versus just talking about it) [my emphasis] and make progress on shifting federal subsidies away from fossil fuels and toward a safe, resilient economy that works for humans and our planet.

Just as the British Labour Party, in its Manifesto It’s Time for Real Change, jumps on the bandwagon of climate change, so too does Ms. McAlevey. The view that climate change will be solved on the continued basis of the existence of a class of employers–a capitalist basis–by only making the rich pay more taxes is typical of social democrats these days (for my criticism of such a view, see The British Labour Party’s 2019 Manifesto: More Social Democracy and More Social Reformism, Part One).

Ms. McAlvey’s social-democratic position finds expression as well in her idealization of other capitalist countries:

There is a third option: the kind of income supports that come with the social democratic policies found throughout much of Western Europe. This would allow greater labor-force participation by both parents, but it would require radical changes to the fabric of our economy. In Sweden, people have generous paid parental leave—two back-to-back years, one for each parent—so that each baby born has a parent as its primary full-time caregiver for the first two years of life. When this parental leave is exhausted, Swedish toddlers enter a nationalized child-care system that is essentially free: paid for with a fairer taxation system that levels the playing field for children’s opportunity and success from birth forward.

The idealization of Sweden and other Scandinavian countries is another ploy used by social democrats to prop up their own reformist tendencies.

Let us look for a moment at Sweden. The consensus between employers and unions started to break down in the 1980s, and accelerated during the 1990s, when there was an economic crisis. (From “Education and Inequality in Sweden: A Literature Review,”
Carl le Grand, Ryszard Szulkin and Michael Tåhlin; in Editors: Rita Asplund and Erling Barth, Education and Wage Inequality in Europe: A Literature Review, 2005, page 355):

However, since the beginning of the 1980s, the consensus around the
solidarity wage policy has been undermined. The national federation of
employers has adopted new policies aiming at wage determination at the
firm level, while the attitudes among the trade unions have been mixed.
This new situation has resulted in a decentralisation of wage negotiations, giving more space for local agreements. Hence, the scope for variation in earnings, both between and within groups, has increased markedly in Sweden during the last decades.

The increase in within-group inequality is connected to two developments
in the Swedish labour market that have important policy implications. First,
the gender wage gap has been stable in the last two decades although the
gender differences in years of experience have diminished markedly. This
lack of improvements in the gender wage differentials is closely related to the
fact that the returns to education have decreased for women in relation to
those for men. Thus, the trend towards increased within-group wage inequality
seems to be to the disadvantage of women in Sweden. …

Second, the relative wages for public sector employees have fallen drastically
in the last decades. This development is closely related to a decrease
in the returns to education for public sector employees in relation to those
for private sector workers. This trend is, of course, related to the first
trend, as women dominate strongly in the public sector. Reasonably, the
main explanation for the rise of earnings inequality between public and
private sector employees is the increasing financial problem of the public
sector, as well as the decentralisation of the wage-setting processes that has
taken place in Sweden since the first half of the 1980s.

Changes in the labour market were followed by changed in education in the 1990s, characterized by a shift in governmental policy towards management by objectives–including education. (From Anne Berg and Samuel Edquist, 2017, The Capitalist State and the Construction of Civil Society: Public Funding and the Regulation of Popular Education in Sweden, 1870–1991 , page 173):

However, as a consequence of the turmoil surrounding the oil crisis in 1973, the digital revolution, and the rise of finance capitalism and global outsourcing, many classic Swedish industries, such as shipbuilding and clothing manufacturing, started to go out of business. Unemployment rates rose and consumption stagnated. Sweden
managed to hold off the worst consequences of the crisis, but the path towards a change in policy and governance had been set. The reform of 1991 was part of a general shift in government policy from traditional rule by guidelines and directives to management by objectives. It followed a broader trend of reforms inspired by neo-liberalism, which called for decentralisation and marketisation of welfare services: education, health care and social security. The neo-liberal ideology had gathered strength in the 1980s, encompassing all the major political parties including the Social Democrats. The neo-liberal programme was set out to solve the problem of how to manage society and the bureaucratic system of government while saving resources. The market, not government, was to handle issues such as social security and education.13 In 1988, there was a decision in principle to implement management by objectives and results throughout the Swedish government apparatus. Soon, such a reform was decided on for the compulsory and upper secondary school system, combined with a move to decentralisation, both of which were to be particularly important for the subsequent changes in popular education policy.14 Interestingly, this policy change, mainly intended to make public administration more efficient, was also suggested for the administration of popular
education and its grant system. Goal-oriented management was seen at the government level as a way of safeguarding and strengthening the independence of popular education.

According to management by objectives, education can be taught according to discrete objectives that are then somehow magically integrated. I will critique in a future post management by objectives (outcome-based education, or OBE) via a critique of several articles of a former professor of mine (Robert Renaud) concerning Bloom’s taxonomy, which forms a ground for outcome-based education. (From Qin Liu (2015), Outcomes Based Education Initiatives in Ontario Postsecondary Education: Case Studies, page 7):

OBE’s precursors can be found in the earlier objectives movement, as represented by Tyler’s (1949) Basic Principles of Curriculum and Design, Bloom’s (1956) Taxonomy of Educational Objectives, and Mager’s 1962) Preparing Instructional Objectives, as well as in mastery learning (Block, 1971; Gusky, 1985), criterionbased assessment (Masters & Evans, 1986) and competency-based education (France, 1978). From these sources, it becomes apparent that OBE stemmed from and is rooted in efforts to address pedagogical concerns.

The idea that Sweden “levels the playing field for children’s opportunity and success from birth forward” is a myth.

Furthermore, I will, in a future post, criticize the idea that there is such a thing as “a fairer taxation system that levels the playing field for children’s opportunity and success from birth forward” in relation to schools. This idea of “leveling the playing field” is pure rhetoric, and presents a completely false picture of the decidedly uneven playing field characteristic of a society dominated by a class of employers–whether unionized or not.

I will also further argue that even if equal opportunity did exist, it would not change the hierarchical nature of the division of labour and the class structure since competition between workers, inheritance laws and the hierarchical ownership of the conditions of lives would be recreated as workers competed (with some losing and others gaining in the process–thereby merely mirroring the present class structure).

I started out, in the first post, by quoting Sam Gindin, with Mr. Gindin pointing out how popular Ms. McAlevey is these days. Her popularity is undoubtedly due in part to her own innovations in organizing. It is, however, also due to her exaggerated claims concerning the efficacy of her own approach to collective bargaining in eliminating power, wealth and income differentials between the class of employers and the working class.

In the next post, I will refer to how the president of the Canadian Labour Congress (CLC)–a social-democratic organization of unions federated to it and representing more than three millions Canadian workers– idealizes collective bargaining–like Ms. McAlevey.

Review of Jane McAlevey’s “A Collective Bargain: Unions, Organizing, and the Fight for Democracy”: Two Steps Backward and One Step Forward, Part One

Jane McAlevey is everywhere these days. Recently appointed a senior fellow at Berkeley’s Labor Center, she is now also a regular columnist for both the Nation and Jacobin. Her webinar (“Organizing for Union Power”) has a global audience. She continues to be called on to address unions and run training sessions in the United States, Canada, the United Kingdom, Scotland, and Germany. In the midst of all this, McAlevey has just come out with a third book on unions and working-class struggles, A Collective Bargain: Unions, Organizing and the Fight for Democracy (and a fourth is not far behind).

So writes Sam Gindin in an article published on the Socialist Project’s website (“Workplace Struggles and Democracy: Challenges for Union Organizing,” December 13, 2019). Her popularity is undoubtedly due to her skills as an innovative union organizer and collective bargainer. It is, however, undoubtedly also due to her idealization of collective bargaining (and, implicitly, collective agreements)–which is a favourite tactic of the social-democratic left.

I reviewed Ms. McAlvey’s previous book, No Short Cuts: Prganizing for Power in the New Gilded Age before (see the section “Publications and Writings” on the home page of this blog). In that work, at least, Ms. McAlevey had an explicit section on the issue of the relationship between social structure and social agency (or conscious social action). I pointed out, in my review, that Ms. McAlevey, far from solving the problem, not only ignored the issue of the relationship between micro-organizing and the macro social structure but short-circuited the issue by identifying the solution to be micro-organizing at the level of the workplace. As a consequence, she idealized workplace organizing, collective bargaining and collective agreements.

In her latest book, she does not even seek to address explicitly the issue of the relationship between social structure and social agency. As a result, she continues to idealize local workplace struggles, collective bargaining and collective agreements. She also confuses the power of employers as persons and the power of employers as a class.

Rather than look first at some of the strengths of her latest book (which I already looked at in my review of her earlier book), I will look at the weaknesses of her book.

From Chapter 1 of her book:

Despite the weakened state of most unions, workers today who are either forming new ones or reforming older ones point us in the direction of how to solve the crisis engulfing our society and our politics. In the midterm elections in 2018—dubbed the year of the woman—the misogyny oozing from the White House was somewhat rebuked at the polls. Yet the year before, working women scored a series of thoroughly impressive wins, just after Donald Trump lost the popular vote but eked out a win from the Electoral College. Many of those victories received far less media attention. As in the midterm elections, men contributed to these wins, certainly, but the central characters were women—often women of color—who waged tireless campaigns of which the outcomes would have drastic consequences. Chapter 1 discusses three such examples of women winning big.

The arena for these battles was the workplace, in the mostly female sectors of the economy such as health care, education, and hospitality, but also in the tech sector, where sexual harassment and the gender pay gap serve as a stark reminder that, despite the tech elite’s rhetoric of building a new society, nothing much has changed, unless you count the creation of the new generation of Silicon Valley billionaires as progress. Women worker-led policy changes included people wresting control of their schedules away from tone-deaf managers, most of whom have never had to pick up their kids at the bus stop; securing fair and meaningful pay raises; achieving bold new safeguards from sexual predators; and ending racism and other discriminatory practices in their salary structure. The mechanism for securing these victories was the collective bargaining process [my emphasis], and each involved strikes—the key leveraging mechanism of unions.

Strikes are uniquely powerful under the capitalist system because employers need one thing, and one thing only, from workers: show up and make the employer money. When it comes to forcing the top executives to rethink their pay, benefits, or other policies, there’s no form of regulation more powerful than a serious strike. The strikes that work the best and win the most are the ones in which at least 90 percent of all the workers walk out, having first forged unity among themselves and with their broader community. To gain the trust and support of those whose lives may be affected, smart unions work diligently to erase the line separating the workplace from society.

Strikes (and well-organized and well-strategized strikes at that) will certainly form a part of a movement for the creation of a different kind of society, but already Ms. McAlevey idealizes the collective bargaining process. She never specifies how the collective bargaining process actually expresses anything more than some gains made by workers in the face of the overwhelming economic (and political) power of the class of employers.

I have persistently referred to management rights clauses in collective agreements–and collective bargaining and the resulting collective agreement do not address this issue except as a limitation (and not as a negation) of the power of any particular employer as a member of the class of employers (and that applies to both the private and public sector). See the various management rights clauses on this blog (for example, Management Rights, Part Eight: Private Sector Collective Agreement, Quebec).

This exaggeration of the efficacy of the collective-bargaining process forms part of the exaggerated rhetoric of the social-democratic left–such as “fair contracts.” It is a sell job in order to get workers to support unions. This may have short-term gains, but when workers then experience the day-to-day grind of working for an employer (even a unionized worker and even deeply organized workers), the rhetoric of “securing victories” starts to wear thin. So does such rhetoric as the following:

The women-powered collective bargaining wins described in chapters 1, 5, and 6 represent monumental improvements to worker and community lives[my emphasis] that happened much faster than traditional policy changes—unless, perhaps, you are the billionaire class.

What are these “monumental improvements?” In her previous book she often refers to “good agreements.” I compared one of her “good agreements” with a collective agreement between the brewery union to which I belonged and the employer. I concluded that the brewery collective agreement was probably slightly better–but that it hardly expressed a “good agreement.”

The reference to the billionaire class sounds very “class-like”–but there are also millionaires who are capitalists, and of course there are many workers in the public sector, many of whose bosses are not capitalists at all in the strict sense.

Although it is certainly necessary to personalize the employer class rather than always referring to such generalities as the “capitalist class,” the “employer class” and the like, the problem is not just billionaires but the economic, social and political structures that constitute the mechanisms by which workers are maintained as employees (and as unemployed and underemployed for a section of the working class). To reduce the problem to the “1%” may be legitimate as a short-hand for those structures, it may also hide the need to challenge these macro structures at every opportunity. By idealizing collective bargaining and collective agreements, on the one hand, and by reducing the power of the class of employers to “the 1%,” on the other, Ms. McAlevey simply ignores the problem of the relationship between social structure and social agency.

How are we going to solve that problem and control our lives by ignoring such a problem? How are we going to do when we read such rhetoric as:

It is precisely because unions can produce these kinds of gains, even in their emaciated state, that they have been the targets of sustained attacks from the corporate class. Unions’ track record of redistributing power—and therefore wealth—and changing how workplaces are governed is what led to a war waged against them by the business class. In just twelve years in the private sector, from 1935 to 1947, with massive strikes at the core of their strategy, workers made huge breakthroughs that benefited most people and created the concept of the American Dream—that your kids will do better than you, along with home ownership for workers and a right to retire and play with those grandkids.

“huge breakthroughs?” Ms. McAlevey is prone to exaggeration–as are many social democrats. Improvements there were, and such improvements as a rising standard of living in various domains are to be welcomed through struggling against the employer class, but this reference to the “American Dream” was hardly generalized, and one of the reasons why this Dream has increasingly vanished for the working class is the exaggeration of the gains achieved through collective bargaining, collective agreements and the union movement. Workers were still used as things for the benefit of employers-something which Ms. McAlevey never addresses (see The Money Circuit of Capital).

Ms. McAlevey’s standard for improvement is rather low. Workers deserve much better–they deserve to control their own life process, and no collective agreement can ever do that.

Ms. McAlvey exaggerates often:

The methods organizers use to achieve these kinds of all-out strikes require the discipline and focus of devoting almost all of their time and effort reaching out to the workers who don’t initially agree, or even may think they are opposed to the strike, if not the entire idea of the union. This commitment to consensus building is exactly what’s needed to save democracy. To win big, we have to follow the methods of spending very little time engaging with people who already agree, and devote most of our time to the harder work of helping people who do not agree come to understand who is really to blame for the pain in their lives. Pulling off a big, successful strike means talking to everyone, working through hard conversations, over and over, until everyone agrees. All-out strikes then produce something else desperately needed today: clarity about the two sides of any issue. Big strikes are political education, bigly. [My emphasis]

Strikes can indeed contribute to political education, but since there is evidence that Ms. McAlevey’s political education is drastically incomplete (ignoring the issue of the relationship between social structure and social agency and how to bridge the gap indicates a drastic lack of political education–as does the idealization of collective bargaining), “big strikes” do not necessarily generate certain kinds of political education.

As for saving democracy–political democracy has more or less existed (although even that is debatable), but the dictatorship which characterizes most workplaces–even unionized and radical ones–forms part and parcel of political democracy (see, for example, my post Employers as Dictators, Part One on economic dictatorship).

Ms. McAlevey refers to “working through hard conversations,” but when I tried to engage in such a conversation about the reference to “decent work” and “fair contracts,” with what I believed were the radical left in Toronto, I was insulted and ridiculed. I decided that such “hard conversations” had to occur without such insults and ridicule. I also decided to start this blog because, when I submitted an article for possible publication to the Canadian journal Critical Education, three anonymous reviewers rejected the article as it was and recommended extensive revisions. Since I did not consider their criticisms to be valid, I sought an alternative venue for expressing my views–hence this blog. (I will be posting their criticisms as well as my critical analysis of their criticisms in future posts.)

Ms. McAlevey often refers to winning “big”–while ignoring the impossibility of really winning control over our lives unless we address the macro issue. It is a definite limitation of her approach:

Chapter 1 discusses three such examples of women winning big.

The first chapter’s title is “Workers Can Still Win Big.” Ms. McAlevey refers to the strike of Local 2850 of Unite Here against Marriott Hotels in 2018. I tried to find the collective agreement but was unable to do so (if someone finds it, please send a commentary with the link). I looked at the UNITE HERE Local 2850 website, the American site for private-sector collective agreements, the following site Collective Bargaining Agreements File: Online Listings of Private and Public Sector Agreements – OLMS (Office of Labor-Management Standards), Department of Labor, United States) and the UNITE HERE Local 2850 Facebook page https://www.facebook.com/UniteHere2850/.

On the Facebook page, one reference to the strike provides some idea of what was won:

Today members of UNITE HERE Local 2850 at the Oakland Marriott City Center ratified an agreement with Marriott and will end our strike as of tomorrow. We thank our allies who supported us in our fight for jobs that are enough to live on in Oakland.

The collective agreement, then, in this judgement, permits the workers represented by the Local sufficient wages to be able to live in Oakland.

She does refer to the persistent sexual harassment to which many hotel workers have been subject and the measures that have been taken to address the issue–as indeed the Local should. The Local, through such representatives as Irma Perez, has expanded its work to include organizing to push for (and pass) legislation that addresses sexual harassment at work.

In a footnote, Ms. McAlevey writes:

Irma Perez, author interview. Irma is what’s called a shop steward in her hotel, so she’s deeply familiar with her own contract and the standards in her area. She states, “We have to clean 15 rooms a day at my job. But at hotels that are not unionized, workers have to clean 28 rooms a day, or sometimes even 30.” From my time working in Las Vegas, the same union versus nonunion standard applied to number of rooms cleaned per day, fifteen in a unionized hotel versus upward of thirty in a nonunion casino.

Cleaning 15 rooms rather than 28 or 30 rooms is certainly a large improvement in working conditions for those who clean hotel rooms. I remember my mother, a small woman (4′ 9″ or around 145 cm) working at a hotel in Calgary, Alberta, Canada, at a hotel. She found it difficult. She finally quit when her supervisor (a Yugoslavian woman) slapped her in the face. A reduction in the intensity of labour by almost 100 percent indeed is significant.

However, let us not exaggerate such a change. The hotel workers still must do what management wants in general–there is no dignity in that–nor equity.

The strike, implicitly, was about better pay in order to eliminate the need to have two jobs to make ends meet:

has the kind of energy that can motivate everyone on the picket line for days on end, dancing as she’s [Irma Perez] chanting to remind the workers and their supporters that they are fighting for a better life, for the freedom from having to work two full-time jobs. Every picket sign has the strike slogan and the worker’s demand, ONE JOB SHOULD BE ENOUGH!

The standard of having only one job that pays sufficiently well to make ends meet is certainly a standard worthy to fight for. However, this does not meet that it is an adequate standard to justify writing such things as the following:

In addition to the wins I’ve already listed, the three unions in the case studies here have secured the right to affordable, high-quality health care; equitable pay [my emphasis]; pay policies that eliminate gender and racial disparities, and favoritism; the right to keep control over your own schedule; improvements in safety on the job, for the workers as well as the patients, students, or guests; effective tools to combat sexual harassment; advances in paid time off, whether to have and get to love a baby, to take vacation, or get sick and avoid getting everyone else sick by going to work. Part of what makes unions and collective bargaining so effective is that workers themselves pull up to the negotiation table to decide how to redistribute the profits they make for others and design rules that actually solve their immediate problems. No other mechanisms engage the ingenuity of workers themselves.

Ms. McAlevey now engages in social-democratic ideology–“equitable pay,” “fair contracts,” “decent work” and the like are catch phrases used by the social democratic left to hide the continued dictatorship of employers over the lives of workers–whether unionized or not.

I probably received higher pay in the unionized jobs that I worked than the UNITE HERE Local 2850 workers, but to claim that what I received was “equitable” in any way simply ignores the issue of how it is equitable. On what basis does Ms. McAlevey justify her claim of equitable pay? She simply ignores the issue.

Furthermore, her reference to “redistribute the profits they make for others” assumes that it is legitimate for employers to use workers to produce a profit in the first place; fighting for complete control over the workplace (and the massive class struggle that that would entail) is simply ignored.

Of course, Sam Gindin and other social-democratic activists consider such explicit aims as “taking control of the economy” (at the grassroots level) as unrealistic under existing conditions. They believe in some magical future where the issue of the power of employers as a class will be addressed–they will always push such an issue to the waited-for future.

How any aim is to be achieved except by using it in the present to organize our present activities is a mystery to me–for that is what a real aim is and not a pseudo-aim. (Among children, the inductive approach of realizing an aim less explicitly may be more appropriate, and adults may even formulate more explicit aims of what they are trying to achieve after engaging in practice for a certain time–but then again, they may never do so). This does not mean that the aim has to be clear from the outset–far from it since aims are often clarified as they are put into effect. Nevertheless, an explicit aim of eliminating the power of employers as a class is certainly a legitimate aim to be put on the agenda of the working class and discussing it in the present–rather than putting it off to the distant future that social democrats are accustomed to doing.

I will continue a critical review of Ms. McAlevey’s book in another post.

The Poverty of Academic Leftism, Part Two: Collective Bargaining and the Interests of the Working Class

Professor Jeff Noonan, as contained in a reference to his work in a previous post( The Poverty of Academic Marxism, Part One), claimed that historical materialism must evolve. This seems to imply that his form of historical materialism, under present conditions, is superior to the historical materialism proposed by Marx.

Professor Noonan claims the following (from Thinkings 4: Collected Interventions, Readings, Evocations, 2014-2015, page 8:

A glaring example of the dangers of striking occurred in February of 2012, when workers in London, Ontario were taught a brutal object lesson in the reality of global capitalism. Then Canadian Auto Workers on strike against the locomotive maker Electro-motive were given an impossible choice. The company (a subsidiary of Caterpillar) demanded that the union agree to cut their existing wages in half, or face the closure of the plant. Seeing that what was at stake was not just their plant, but the future of the union movement in the Ontario manufacturing sector, these workers heroically sacrificed themselves, went on strike, and watched their livelihood move to Muncie, Indiana. Had they not stood up to the brutish tactics of Electro-motive, every manufacturer in the country would have been encouraged to make the same demands. What boss wouldn’t want to cut her or his workers’ wages in half? While the jobs were lost, the massive public outcry against legalized extortion preserved the possibility of meaningful collective bargaining in other plants, at least for the time being.

What does “meaningful collective bargaining” mean for Professor Noonan? It is difficult to know since he does not explicitly provide an answer, but the following may what he means (page 12):

v) The University will cease collecting union dues from members and forwarding those dues to WUFA (Article 4:01 and 4:02).”

Now, on one level, these changes are not alarming, for they are changes that would occur in the case of a lockout. What is most disconcerting is that they were unexpectedly thrown into the room when it appeared that both sides were making progress by negotiating and not threatening. Both teams bargained past the lockout deadline and had scheduled meetings for the next day. The assumption amongst members– naïve, as it turned out– was that both sides had found common ground and were splitting the differences that get split for the sake of reaching an agreement with which everyone can live.

Meaningful bargaining is where the parties engage in negotiations in order to achieve a common ground “for the sake of reaching an agreement with which everyone can live.”

Now, in typical collective bargaining, any member of a negotiating team knows that all items on the table will not be achieved. There will be items that are considered more important. The relative strength of the parties to the negotiations in the particular conditions will affect what can be realistically be achieved in the short term (and this includes the possible resources used in lockouts and strikes).

But why refer to the idea of an “agreement with which everyone can live?” Does Mr. Noonan mean by that an attitude by workers that, given the balance of class forces, this is the best that can be achieved, but otherwise it is not something that “everyone can live with”–but have to do so for the time being? That is to say, that the collective agreement is something that does not express fairness but rather expresses the weakness of workers collectively until such time as they no longer need to negotiate agreements that entail their subordination to the power of employers (and managers as their representatives)? Do the various management rights clauses that have so far been posted on this blog express “an agreement with which everyone can live?” Or do they express the asymmetrical power relations between unionized workers and the class power of employers?

What would Professor Noonan say to a worker who works under the collective agreement at the university where he works (see Management Rights, Part Five: Public Sector Collective Agreement, Ontario) if that worker did not find not only the particular collective agreement unfair but all collective agreements unfair since they presuppose the subordination of the will of workers to the power of an employer (and his or her representatives)?

There is a world of difference between understanding that a collective agreement may be the best that can be hoped for under existing conditions of class power and the view that a collective agreement is something that people can live with. In the first case, there is a smoldering presence of a feeling of unfairness, which can surface when conditions change. In the second case, there is a feeling of fairness, and workers who breach a collective agreement can legitimately be reprimanded. Professor Noonan’s failure to specify any difference between the two probably expresses his own working conditions, which are undoubtedly superior to most workers who are employees.

Imagine a situation where a group of thugs decide to set up a process of collective bargaining between themselves and people whom they have sexually abused. Representatives of the sexually abused engage in negotiations with representatives of the thugs. Under given circumstances, the thugs have much more power than those who are sexually abused. If they come to an agreement over the extent of sexual abuse (with both parties bargaining in good faith), would professor Noonan call the resulting agreement an agreement “with which everyone can agree with?”

Yes, workers are not sexually abused, but as employees they are used as things for purposes over which they lack control (see The Money Circuit of Capital). Why should anyone who is an employee feel that they can live with such an agreement except for the recognition that they have to do so, given the necessarily unequal power relations between them and the class of employers?

Despite Professor Noonan’s radical rhetoric, his hidden assumption is that working for an employer is not really all that bad. How else could he refer to an agreement “with which everyone can agree with?”

In the movie Enter the Dragon, Bruce Lee is fighting against several people, and he runs into a chamber where the walls suddenly close on all sides. He cannot escape, realistically. He sits down and accepts the situation–not because it is fair but, presumably, because he lacks the power to oppose the situation. This is what the collective-bargaining process should express and not such social-reformist rhetoric as accepting a contract “with which everyone can agree.”

Professor Noonan reminds seems to forget–or perhaps he never learned–the lesson of Bob Dylan’s song, Like a Rolling Stone. In that song, Dylan sings the following:

You never turned around to see the frowns
on the jugglers and the clowns
when they all did tricks for you.

Although I can never be sure, the hidden resentment that people feel in the face of those in power is probably well expressed in the expression of a Guatemalan (perhaps a peasant) sitting on a roadside when the military was there. (See at around 2:30, Guatemala–Pete Sears) Guatemalan peasants had to live with the extreme oppression characteristic of Guatemala in the later 1970s and especially in the early 1980s, but they need not “learn to live with it.”

Professor Noonan may argue that he merely needed to qualify his reference to collective agreements “with which everyone can agree,” as I have done above, but since he failed to qualify such an assertion, it can be inferred that Professor Noonan does not really come to grips with the daily oppression and the daily grind that most workers face at his own workplace, let alone in the wider city of Windsor and, indeed, in the province of Ontario, in Canada and in the world.

Introduction

The Nature of the Rate of Exploitation

Conclusions First

Surplus value (s) or Adjusted EBIT $969 millionVariable capital (v) or Adjusted Employee benefit costs $5,432 billion

Comparison of the Rate of Exploitation of Bombardier Workers to the Rate of Exploitation of Other Workers

Data on Which the Calculation Is Based

Surplus Value (Profit)

Adjustments

Financing Expense

Financing Income

Variable Capital

Adjusted EBIT or Surplus Value (Profit) 969 (895+74)Temporarily Adjusted Employee benefit costs (variable capital, v) 5,429 (5,503-74)

Further Adjustment of Variable Capital (Wages and Benefits)

Final Calculation (Based on Adjustments) of Surplus Value, Variable Capital (Salaries or Wages and Benefits) and the Rate of Surplus Value

Surplus value (s) or Adjusted EBIT $969 millionVariable capital (v) or Adjusted Employee benefit costs $5,432 billion

Political Considerations and Conclusion

Comparison of Rates of Exploitation

Conclusion

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion

Adjusted EBIT or Surplus Value (Profit) 969 (895+74)
Temporarily Adjusted Employee benefit costs (variable capital, v) 5,429 (5,503-74)

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion