Issue 5 - Fall/Winter 1997

A New Social Contract:
The Need for Radical Reforms in the Fight for Jobs and a Living Wage
(page 1 of 2)
By Carl Davidson

The Jobs and Living Wage movement spreading across the country is a response to three main features of today's economy: 1) the vast and growing inequality of income and living standards across the entire population, 2) growing insecurity in middle-income sectors due to downsizing and the redefinition of work, and 3) harsh and degrading poverty for the structurally unemployed and urban welfare populations.

The grassroots organizations and coalitions fighting these conditions have put forward a diverse collection of demands and programs. The New Party and ACORN, IAF, AFSCME, and a number of local labor councils, for instance, have launched mass campaigns in a dozen major cities. They are demanding a $7.70-an-hour minimum wage for any business with substantial city contracts, subsidies or tax abatements. Other groups have focused on the federal government, and are pressing several bills in Congress that would create jobs by spending more funds on infrastructures--schools, roads, bridges--and restoring cuts in welfare. The Labor Party is trying to build support for a Constitutional Amendment guaranteeing jobs for all at decent wages.

While the various packages of demands, programs and legislation each have strengths and weaknesses, all of them can be endorsed as making a positive contribution to an immediate and desperate situation facing the poor and unemployed.

Yet as socialists we are called upon to do more than simply get behind the local movements. We have a radical understanding of modern capitalism that goes beyond the immediate need to defend its tattered safety net.

We understand, for instance, that the current job crisis and draconian cutbacks inflicted on the poor are not mainly the results of the usual ups-and-downs of the business cycle. Nor is it the consequence of lingering pockets of rural poverty bypassed in the country’s transition to a modern industrial society. Those crises had been met, however inadequately, by the social contract wrung out of the ruling class in all the reform packages from FDR’s New Deal to LBJ’s Great Society. In exchange for a relative degree of class peace, this contract redistributed wealth downward in the form of social security, unemployment insurance, public works like rural electrification and the interstate highway system, collective bargaining, Medicaid, Medicare and AFDC.

The current crisis of the poor and unemployed is quite different from the cyclical crises of the past. Instead it is the consequence of some deep structural changes that have permanently abolished large numbers of jobs in the low-skilled blue-collar and middle management sectors of the labor force. While new jobs have been created in other service sectors, their skill levels and racially restricted location requirements have generally excluded the low-income unemployed from filling them.

The result is a growing sector of the inner city population that is being excluded from the labor force altogether. Their plight is exacerbated by a power elite that opposes full employment in any case. Every time the official jobless rate gets down to 6%, the Federal Reserve Board goes into a panic over a fear of inflation, and adjusts interest rates to curb new job creation. To survive, many are forced into the underground economy, which in turn has lead to the vast expansion of the prison population.

Some of the liberal elites are disturbed by this situation, which they describe as a “social time bomb.” However, the Gingrich-Clinton “bipartisan” right-center coalition currently in charge sees things differently. They want to make life even harsher for the poor, apparently with the hope that this will force their elderly to die sooner and their young people to have fewer children. They claim that the shredding of the safety net is for the more benign purpose of pushing people into employment. But since anyone with even a superficial knowledge of economic realities knows the jobs aren’t there, we have to conclude that truth behind “ending welfare as we know it” resides in the more sinister motive.

The situation facing progressives is quite difficult. The current policies and conditions have dramatically exacerbated the division of the working class into two broad groups. One is mainly white, suburban, strung out on credit but still employed and living under the relative comfort of the old social contract, even if its tattered and worn thin. The other is mainly minority nationality, urban and now living in nearly intolerable and hopeless conditions outside the social contract. One group is controlled by the carrot, the other by stick--and the racial dimension of the divide is the key to the establishment’s ability to maintain a relative degree of social stability.

In these circumstances, a progressive strategy based on simply restoring the old social contract and extending its reach by redistributing the wealth is not likely to be very effective. The recent defeat of single-payer national health care is instructive in this regard. The problem was that a good majority of the people already had health insurance of some sort. Many figured that if more people who couldn’t afford insurance would become insured, their piece of the health care pie was in danger of being reduced. Many listened sympathetically to the arguments for universal care, but few could be mobilized to do anything to win it.

What, then, can be done? Probably the best set of strategic guidelines for socialist activists in the mass movements was put forward by Karl Marx himself in the Communist Manifesto. Socialists, he argued, should take part in all the movements and organizations of the working class. But he added that they should distinguish themselves two ways. First, in the movements of the present, they should look to the needs of the future; second, in the battles launched by a part of the class, they should take care to uphold the general interests of the class as a whole.

We need to advance a new social contract rooted in this perspective. It can’t simply be a demand for socialism. It must be a set of demands and programs rooted in immediate needs, but standing a good chance of uniting a majority and pointing to future transformations. It must also be a social contract that engages the arguments of the right wing and exposes its bankruptcy. In terms of the Jobs and Living Wage moments, such a contract would include programs like this:

1. Jobs for all who are able and want to work.

This slogan itself expresses the limitations of the current labor market--the demand for work has outstripped the supply of jobs in unskilled sectors, while the supply of jobs is greater than the current number of qualified workers in high-tech sectors. When the market fails, the government must act, either by encouraging new capital formation, ie, new businesses in distressed areas, or by becoming the employer it in public works projects. There is certainly enough work to be done, either in repairing old infrastructures, rebuilding and reorganizing the schools for up-to-date training, or launching new environmentally friendly projects like solar power or Mag-Lev inter-urban high-speed rail systems. More >>


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