March 9, 2023

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The Republicans (and their Capital masters) in the USA have been worrying about labour costs for a while. They think inflation is caused by wages, they worry that wages might go up too quickly and reduce profits, and they think that workers have way too much bargaining power right now even with historically low union density.

There are only a few ways to stop any rising power in labour when there are weak or no union activity: increase the number of workers available or reduce the need for the workers.

The attempt to slow-down the economy and reduce competition between capital for workers is not working as fast as they would like. Central bankers are pushing on the string of interest rates to try to get to a recession. But, they are starting to realize that they have to kick the chair out from underneath the economy if they really want to affect the labour market.

The too slow to arrive recession means that there are things that need to be done in the mean time: increase the labour supply. What makes this difficult for the USA is the Republicans (and Democrats) are so steadfast in the Xenophobia that too obviously opening the door to new immigrants or migrant workers is not really possible.

Instead, their focus has been on the current potential workforce inside their borders.

In France, it is about increasing the number of years workers need to work at the end of their lives by increasing the age of retirement.

In the USA, Arkansas Governor Sarah Huckabee Sanders has focused on the other end and moved to allow children to start work earlier. Ohio has also done so.

This is not Arkansas's idea, of course. The Democrats have launched a hand wringing session to look at a sharp rise in exploitative labour practices aimed at children (they call them "teens" because child labour sounds bad).

Teenage employment in the US surged to more than 32% in summer 2021, the highest level since 2008, and for the first time in history the unemployment rate for 16- to 19-year-olds fell below the rate for 20- to 24-year-olds.

Child labour is actually not uncommon in the industrial West. Most are aware that farming, family businesses, and some service sectors rely on younger workers. But, major industrial players have outsourced to countries that have much more lax child labour laws.

Capital cannot help itself trying to find workers who are unable to negotiate pay increases to sustain profits.

Child labour should not surprise anyone who has been paying attention. It is the last desperate move that is along the lines of:

• Making the elderly work
• Not counting domestic work as waged work
• Cynically supporting for-profit, low-waged child care to push women into the workforce.
• Selectively targeting skilled trades recruitment to reduce wage pressures on construction during boom times.
• Selectively recruiting immigration based on skill sets to reduce wage pressure on nurses, PSWs, and other care economy workers.
• Shifting focus on STEM sectors in the economy and devaluing the arts and social science degrees as "dead-end degrees" because they do not lead to a job capital wants.
• AI that is focused on productivity of white collar workers.
• (Un)Employment Insurance that does not support casual and low-waged precarious workers.
• (Un)Employment Insurance that creates and supports the "gig" economy.

Under capitalism, all these measures are about smoothing very short-term labour market issues through pumping workers into any sector that looks like wages will have upward pressures because of supply.

The trick for the left is to support the expansion of employment in areas needed by society, but not at the sake of profit margins. Care workers are needed, but the real solution is higher wages first, not fear of higher wages.

It probably will not surprise you, but productivity of some job classifications is largely affected by AI-supported systems.

Researchers at MIT have done one of the first studies in a growing field of productivity measures of office workers using ChatGPT. They found a massive increase in productivity.

The results are fairly spectacular.

The ChatGPT using group was 37% faster at completing tasks (17 minutes to complete vs. 27 minutes) with roughly similar grades (level of quality), and as the workers repeated their tasks for improvement the ChatGPT groups quality went up significantly faster. In other words, ChatGPT did make work speedier with no sacrifice in quality and then made it easier to “improve work quickly” using the tool.

Like with all increases in the Organic Composition of Capital the impact will be complex.

Importantly for the left is to focus on how this technology is being implemented, make sure that technological change language is up-to-date in our collectively agreements, and make sure we call-out productivity increases where we see them so workers can demand more wages for any increase seen.