Expect worse for the working class

By John Lloyd
January 10, 2012

Organized workers of the world are united on at least one big thing: that the recession which has settled over much of what was once called the developed world (and if we are not wise and active, may soon be better called the “undeveloping world”) should not load more onto the burdened backs of the working class.

But it will. Politicians everywhere see little choice.

In the United States, right-to-work laws are being pushed hard in those states with Republican leadership. The laws stop unions from forcing non-union workers to obey union decisions in plants where they have contracts. And when these laws are on the books, the unequivocal result is that union organization and membership slump. More controversially, those who support these laws claim that investment in the state grows – thus increasing the number of jobs and sometimes the level of wages.

In France, President Nicolas Sarkozy is preparing a package of measures, due to be outlined on Jan. 18 at a meeting with employers’ and union leaders, that he hopes will allow companies to reduce working hours and pay in slack times, with increases at a time of full demand. No one expects an agreement soon (if ever), and since the President faces a re-election battle in the spring, he is politically vulnerable to disruption. But even if Socialist candidate François Hollande, ahead now in the polls by some 10 percent, were to win, he would be trying something of the same, since French companies’ competitiveness is tending to fall.

In the UK, large if brief public sector strikes have disrupted transport, customs inspection and schools, as David Cameron’s Conservative-led coalition government seeks to impose cuts in public sector pensions and to stretch working life: a double whammy that the unions have regarded as unacceptable.

But it is in Italy, the largest of the European states now in the economic fever ward, that the struggle over the conditions under which working people sell their labor is most acute. The technocratic, unelected government of the former European Commissioner, former Bocconi University economics professor Mario Monti, increasingly finds itself drawn into a confrontation with the country’s three big union confederations – especially the CGIL, led by Susanna Camusso. And emerging at the heart of the confrontation is the defining element of the coming clash, at once symbolic and concrete: an article, number 18, of the 1970 Labor law, saying that sackings or layoffs of workers in any company employing more than 15 workers must, if challenged, be approved by a judge before they can go ahead. Employers hate it; the unions see it as a large achievement. The CGIL, professing itself ready to negotiate on many issues, has said in advance that Article 18 is “not for discussion.”

Italy, after the war, became not a socialist but a “social” republic: The first clause of its constitution says that its republican existence is “based on work.” For much of the post-war period into the early 1990s, a powerful left was mostly organized by the Communist Party – the biggest in the West – and by the trade unions.

The Communist Party was in a permanent if large minority. But it held city and regional power in the central “red belt” of the long peninsula, and the unions, with the CGIL to the fore, commanded the shop floor in the big factories of the north.

To be sure, governments into the 1980s were always dominated by the Christian Democrats, more or less strongly anti-communist. But if the left took its lead from a revolutionary Marx, the Christian Democrats based their domestic vision and policies on the social teachings of the Vatican – which was itself only a little less anti-capitalist than it was anti-communist. The result was legislation and customs that favored both workers’ and social solidarity, with unions and professions organizing networks of associations and clubs that acted as their power bases – strongly defended by them and largely untouched by governments.

The intricate balances of this polity worked well – very well, economically – in the decades after the war, but they fell apart in a flurry of corruption allegations, charges and convictions in the eighties. After a period of Socialist-led rule, politics came, from the early- to mid-1990s, to be dominated by one figure above all others: Silvio Berlusconi, whose media, money and chutzpah allowed him to create a coalition of the right that exercised power for most of the years since 1994, when he first won office. The sheer power of the Berlusconi package, coupled with the passivity and disorganization of the left, meant that a majority continued, till last year, to allow themselves to be seduced into the belief that all was fine, or would be fine — until suddenly it wasn’t. Berlusconi resigned, and Professor Monti and his fellow technocrats, appointed by the President with the main parties’ acquiescence, took over with a plan called — with equal measures of hope and desperation — “Save Italy.” To them has fallen the dreary task of taking, and trying to enforce, the decisions at which the elected politicians balked.

They have inherited a country with a huge public debt, a stalled economy, a leaping unemployment rate, and a poor and mafia-ridden south. And a rigid labor market: much discussed, the subject of many proposals for reform – but in its essentials untouched since better times. Within that rigidity, Article 18 now emerges as the core issue, carrying the weight of the industrialists’ complaints that they cannot be masters in their own plants and that Italy’s low rate of foreign investment and high incidence of strikes are all due to laws that give overweening power to militant unions.

Italy’s most famed and largest company, the vehicle maker Fiat (now the owner of Chrysler), has broken with the employers’ organization, Confindustria, so that it can make – or break – the national union contracts the organization has traditionally negotiated. Most of its production is now abroad – in Brazil and Poland – where it can get higher productivity. Mario Carraro, whose company makes transmission systems and who heads the Confindustria in the Veneto region, said in an interview in Corriere della Sera that “when Article 18 was written, the world was one in which people believed the myth of a stable job and wanted to work in a factory. The world has changed.”

These signs point to a great struggle ahead, in Italy and in much of the rest of the West. It brings together the terrible dilemmas of a European continent now facing, especially in its most pressurized countries of the south, a root-and-branch reconstruction of its welfare systems, its public provision of health and education, and its labor laws and customs. And though these have, in the past decades, produced relatively generous outcomes, most working people are still not too many months of unemployment away from a hard time. More, they see in the media and in the streets the rich and super-rich, often with salaries and bonuses still growing, revving up their Ferraris and able to accelerate out of the swamp in which many within the majority find themselves. They will tend to object.

In Italy – and in Greece – the matter is aggravated by the fact that the government, though ruling with the consent of the elected, does not itself have an electoral mandate. It has been hired to do the dirty work, and the work is becoming dirtier by the day. Italy is strongly group-oriented, with too little sense of a national community – as many of its intellectuals have lamented. Its groups are now closing ranks to defend what they have won. For an example of this behavior, the unions need only look to the parliamentarians: the best paid in Europe, now facing quite modest proposals for a diminution of their income and this week fiercely defending that income.

Everywhere, the decisions now being taken with the aim of increasing the country’s productivity and jobs will run into the basic question: Do the groups recognize the national need to adapt to globalization’s demands? Or will they fight to the death to keep what better times brought?

Solidarity, of either the Marxian or the Papal sort, is now seen, as Mario Carraro put it, as part of an old world, now irrevocably changed.

Modern economies need flexibility, and that means individuals, not groups, willing to move, retrain, come and, above all, go. This week began, on New Year’s Day, with messages from the world’s leaders: In Europe, at least, they warned of a hard year to come. Hardest, likely, for the workers.

PHOTO: Italian Prime Minister Mario Monti gestures as he attends the television show “Che tempo che fa” in Milan, Jan. 8, 2012. REUTERS/Stefano Rellandini

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Comments
5 comments so far

Mr. Lloyd, seldom have I seen so many accurate but often challenged realities from multiple, concise sources in clear words. A fine presentation of facts and conclusions.

Interesting that Italy’s postwar “recovery” under our Marshall Plan was “…mostly organized by the Communist Party – the biggest in the West – and by the trade unions”. And I suppose it should not be surprising that the Vatican “…was itself only a little less anti-capitalist than it was anti-communist”. Very, very interesting “bed fellows” of recent history.

More than a few that live “over the pond” (or whose hearts are there) repeatedly laud the “benefits” of Euro-Socialist governments. They are, even today, in denial that the very governments they hold up as “good examples” of social responsibility will be increasingly in financial trouble as a direct result of social benefits their economies simply cannot sustain in the long term.

WW II ended sixty-six years ago! Why are “European “…working people…still not too many months of unemployment away from a hard time…”? How many generations is it that have lived pay check to pay check and NEVER “put back some” for the inevitable “rainy day”?

With SEVEN BILLION people on our planet, productivity at reasonable cost is “globalization’s demands”. The successful economies of the future will be those who best adapt. The countries that can not or will not adapt will have less and less work and a worse and worse economy. Solidarity is so “old Europe”.

Posted by OneOfTheSheep | Report as abusive

You mention two of Mr Monti’s previous occupations, but not that he also worked for Goldman Sachs. Strange, especially considering this is something he has in common with the prime minister of Greece.

As the share of the pie taken by workers has been in retreat since the 80s it is demonstrably NOT unsustainable worker benefits that have brought us into this mess.

Kicking the workers a little harder will not pull us out. Any more than kicking a dog would.

Whatever economic theories you, the rest of the politico/journalistic elite or former employees of Goldman Sachs have are by now discredited. If they tell you to cut worker benefits to get out of this, you can be sure that is NOT the way.

Who will spend the money to raise GDP when the workers are left poorer?

Posted by Dafydd | Report as abusive

At issue is whether individual loyalty to a particular nation / State has any value or not. Is a country anything more than the property of its ruling class? Have we regressed to the European Bourbon monarchies? Or can there be a political identity with a group that is friendlier to an individual?

As conditions get worse for people in what was once called the “West”, these are valid questions. Given the propensity of governments to treat their “citizens” more like livestock than human beings, it is doubtful that current models of government based on the theory, but not the practice, of ethnic self-determination will survive. Tribes take care of their own considerably better than “Human Resources” departments.

The issue is the breakup of current countries as their ethnic and racial makeup shifts further and further from a core of people who actually have a shared cultural background. The kind of thinking displayed in this article will clearly lead to the breakup of current entities, most likely in a violent fashion.

Posted by txgadfly | Report as abusive

the workers have been losing benefits and jobs for years as the Masters of the Universe played in the third world making their workers slaves. Now after the Masters of the Universe had their little games, that they profited from in the moment, break the develop world’s finances it’s the workers who must pay the price.

Posted by aspee | Report as abusive

Promises were made, payment was taken, the people who took it can be identified, more or less. That is all that is needed.

Systems change. Institutions change. Governmental systems change. Economic systems change. Has this ever been thought through beforehand? I think not.

Hold on to your hat.

Posted by txgadfly | Report as abusive
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