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How will Biden’s “Green New Deal” affect workers?

2020-12-08 | USA

The EU has launched its green deal at full speed. It is its main line of industrial policy. The aim is to impose a rapid technological change which will herald investment opportunities of hundreds of billions of euros in the next five years. Beyond subsidies and aid for the energetic transition, the states will guarantee the profitability of these investments by altering the conditions of competition. For instance: by setting a deadline for the circulation of cars with combustion engines, the change in the car fleet and the purchase of electric cars is imposed, and these are also subsidized by each government. By forcing the consumption of a whole new batch of more expensive products, income is extracted from work and given to the profitability of new green investments.

This change not only applies to European workers, by changing the conditions of competition it also affects companies and capital from the U.S. in one of its main foreign markets. Last week, Ford's director in Germany denounced how the big US companies, lagging behind in their electric transition, were being pushed into a corner, if not expelled, by the new environmental regulations in Brussels. Immediately, there was a drastic turnaround of General Motors in the US, withdrawing its support for Trump's policy and aligning itself with Biden's Green Deal. It was not alone. On the 2nd, 42 major US companies wrote a letter to Congress and Biden's transition team declaring their support for the US's return to the Paris climate agreement. Big business and U.S. capital also want to participate in the party, both in Europe and at home. EU Commissioner for External Relations Josep Borrell responded the next day with an offer of a Comprehensive Green Agenda for EU-US relations, while the Washington Post celebrated Janet Yellen's appointment to the Treasury Department as evidence that the Biden cabinet will save us from climate change by creating good jobs.

The Carbon Tax

A $230 Carbon Tax per ton of CO2 emitted will increase the cost of goods and services by approximately $750 billion for US households

People's Policy Project

Yellen is a strong supporter of the Carbon Tax, the carbon dioxide emissions tax proposed in the Congress Action Plan for the Climate Crisis. The logic behind the idea of the carbon tax is essentially the same for Republicans as it is for Democrats of all stripes. It is the typical cascading tax: taxing fossil fuels at wellheads or ports, if imported, elevates costs along the entire production chain which, in one way or another, incorporates them. Since oil derivatives are also used in different parts of the chain, the effect will be multiplied: For example, food is fertilized, harvested, cleaned, transported and sold, and the cost of each step would be affected by the carbon tax. The idea is that the tax will make low-fossil-energy products and chains more competitive by changing purchasing choices and consumer behavior. This is the essence of all punitive taxation: we will all behave in a less polluting way, simply because we cannot afford anything else.

Taxes are not neutral vis-à-vis classes. The carbon tax, like all consumption taxes, is necessarily regressive because the weight of consumption on the income of workers is much greater than on the income of the property owning classes: the normal worker spends practically all his salary on satisfying his basic needs, while the owner spends only a small portion no matter how large his consumption is, the rest becomes private capital. In the case of energy taxes this is aggravated because basic consumption -food, transportation, heat- is the most energy intensive. According to the People's Policy Project study, a tax of $230 per ton of CO2 would cost the average person in the lowest income decile $866, about 14% of their income, while it would cost the average person in the highest income decile $4,738, only 9% of their income.

One of the most frequently proposed ways to compensate for this is the carbon dividend. The money collected from the tax would create a fund to be shared equally among all citizens. Following the example of a tax of $230 per ton, each person would receive a dividend of $2,237. The idea is that those who consume less CO2 incorporated into products than the average would obtain a positive balance, would earn money. The poor but climatically virtuous would benefit in theory.

The reality? The argument that lower income families would benefit because they have a smaller carbon footprint contradicts any minimally sensible estimate. To begin with, workers would not be compensated for increased spending on commodities by what they receive from the dividend. That is the essence of all cascading taxes: the impact on consumer costs is greater than the amount of tax collected. Secondly, in addition to incurring more costs, they would have to take on more debt than they already do in order to reduce costs in the medium term. And to top it off, the idea is that the Carbon Tax will increase in value as emissions are reduced... making the dividend increasingly smaller.

Who would then benefit from the Carbon Tax and the Carbon Dividend? In the direct calculation, the petty bourgeoisie already owning their Tesla, having thermally insulated their house and having solar panels to warm up their shower water. But above all, and above all, the investments placed in the green production and in the energy transformation of the already existing production would benefit. As in Europe, the state would contribute with the tax to create a mass of new uses for capital. By forcing a transformation of consumption, it hopes to generate a transfer of income towards these new green uses of capital. The net end result will be a massive transfer of revenue from workers to capital. In other words: with the same salary we will be able to buy less things, with the same capital there will be higher dividends.

The energetic efficiency reform

Building on its efforts in the Recovery Act, Biden will set a goal to reduce the carbon footprint of U.S. buildings by 50% by 2035, creating incentives for deep modifications that combine appliance electrification, efficiency and clean on-site power generation...

Joe Biden Plan for Climate Change and Environmental Justice

Another essential component of the plan is to improve the energy efficiency of our buildings in order to... stimulate the housing market. The game is the same as the Carbon Tax: we will have to spend on making our houses more energy efficient so that the rise in energy costs does not prevent us from heating them. In the end we will eat up savings and still spend more... but the green reform companies, the capital invested in insulation technologies, the investments in batteries and self-production systems and the construction companies, will see their dividends certainly stimulated.

Biden's program also proposes a series of measures to make households in lower-income neighborhoods more efficient and climate-resistant. But let's not get carried away. This is not really about the welfare of the most precarious workers. The Congress Action Plan for a Clean Energy Economy and a Healthy, Resilient, and Just America often talks about how climate change hurts the housing market. In addition, since the bursting of the housing bubble in 2009 there are tens of thousands of empty buildings whose cost of repair, coupled with unpaid back taxes, is higher than their market value. No one is going to buy them above that price and invest in them to rent or sell them once they are rehabilitated.

But we live under capitalism. The success of the economy, that is, of the accumulation of capital, depends on creating profitable destinations for capital. Converting all that immense amount of housing and industrial buildings into something that can be profitably invested in would be an oxygen bottle for capital and real estate investment funds.

So... Biden promises to create Land Banks, funds from the local governments and states that would acquire these properties.They would demolish them and then build on them or renovate them when possible so that, converted to energy efficiency, all these empty homes would be put back into productive use, i.e., they could be operated by real estate funds. The gentrification that would predictably follow becomes the green propaganda touted by the business press, which talks about increasing wealth for communities of color, particularly Black and Latino communities and especially Black communities. Translating: your house is still the same as always, but now it has a higher market value, so you will pay more taxes for it if you own the property and a higher rent if you are a tenant.

The very Plan for a Clean Energy Revolution and Environmental Justice that can be downloaded from Joe Biden's official website says efforts to make buildings more efficient and climate-resilient can raise property values and push lower-income families out of their neighborhoods. Of course, he is quick to say that this is why climate change mitigation efforts must consciously protect low-income communities from green gentrification. However, the plan, detailed in other things, does not include how they are going to do this. And in any case, the measures to protect us from green gentrification, just like the Carbon Tax dividend, are designed to mitigate impacts, not to prevent or compensate them. As the Biden campaign texts themselves acknowledge, it is a necessarily painful process for workers.

Working conditions

Biden will make sure these investments create good union jobs so that they can expand the middle class. American workers must build the American infrastructure and manufacture the materials used in it, and all of these workers must have the option to join a union and bargain collectively.

The Biden Plan to Build a Modern, Sustainable Infrastructure and an Equitable Clean Energy

The minimum wage increase to $15 per hour is included in this package... although in reality it would not apply in any case before 2026, not even in states like Florida that have already approved the increase. There is not even a guarantee that the minimum wage will increase nationally to $15 per hour. In fact, the entire part of the Biden plan that deals with working conditions focuses on increasing the influence and power of unions. Wage increases are contingent on unionization.

According to Biden's plan, unions will negotiate better working conditions on behalf of and for the workers they represent, and their capacity to represent them must be strengthened. The message is that if we fight for workers to organize in sectors and workplaces that are not yet unionized, the unions will fight for us.... but is that true? Nothing seems to indicate that.

During World War I, unions committed themselves to the patriotic cause and were tasked with ensuring that workers met the demands of wartime production. One of the ways unions used to keep the workforce disciplined was to implement the check-off system, i.e., to automatically deduct from workers' pay the fees addressed to the union. Workers automatically became members of the union when they were hired. It was a way to impose a closed shop, that is, to make every worker employed in a workplace a member of the union, without the need to require employers and management to only hire unionized workers. The system was the result of an agreement between unions and companies. For the first time in the US, a system similar to the European one was in place, in which unions negotiate the general working conditions in a company.

UMWA insists on the check-off because it is the most effective instrument to keep the industry running at maximum efficiency. Under such conditions, check-off becomes the very essence of cooperation ‎between classes‎ and mutuality. The history of the industry shows that it is as essential to the continued prosperity of employers as it is to men. Under the pressure of war, the American government extended the principle of check-off to provide for financial penalties for absenteeism. This extension was made at the request of the employers and with the consent of the union.

John L. Lewis, leader of the United Mine Workers of America (UMWA)

A similar system was established during World War II. The unions during this period, as during the First World War, committed themselves to preserving labor peace. But they were unable to prevent workers from going on wildcat strikes. The workers who participated in these strikes were not protected by the unions and ended up being fired. So unions not only lost credibility with employers and the government for not keeping full control over workers, but also lost influence over workers, who were increasingly willing to strike without their permission. Their flow of dues revenue, which, unlike in Europe, was the main form of funding for US unions, declined rapidly.

The unions were continually faced with this dilemma... in which the workers threatened to leave the union if they did not adhere to their demands, while the companies refused to give in to these demands for wage increases and improved conditions. In Walker-Turner's case, the National War Labor Board...

...faced an apparent dilemma: ordering a wage increase would lead the company into bankruptcy; increasing wages only according to the company's ability to pay would probably mean the death of the union due to the possible loss of members.

The National Labor Board and the "Maintenance of Membership" Clause.

To prevent unions from breaking their promise of labor peace in the effort to avoid continued membership loss, federal managers decided to mandate membership maintenance clauses in collective bargaining agreements. The membership maintenance clauses require union members to keep paying dues for the duration of a collective bargaining agreement and to remain on good terms with the union. In other words, in practice, the state and employers gave unions the power to fire the most combative workers as the only way to keep the unions standing.

When the Taft-Hartley Act and right-to-work laws prohibited closed shops unions extended the use of the representation fee system. In this system, unions collect fees from all employees in a unionized workplace, but cannot force those employees to be union members. The laws on the right to work, however, differ from state to state. Many states today have a ban on this system in the private sector. And public sector unions, which have a different history than the private sector, also differ in their powers from state to state. Some states allow union representation of public sector workers, while others do not, making unions in those instances little more than activist groups. Unions that are in a stronger position, that is, those in states where they can charge representation fees and negotiate collectively, do not have to worry as much about getting more members as those in states where they do not have these powers.

Unionists themselves say that this is the reason why powerful unions, like the UFT in New York, align themselves with the right wing... while unions in states like West Virginia would be more combative and closer to the left precisely because they are weak and have to court workers for membership and influence.

In 2018, West Virginia's education unions were willing to authorize illegal teacher strikes. Public employees in that state do not legally have the right to strike, but workers were willing to strike with or without authorization. But the weakness of these unions did not ultimately prevent them from suppressing the strike and participating in its repression.

The same unionists who say that the UFT is conservative because it does not need to gain the trust of the workers say that we must strengthen the unions, that is, give them the capacity to act as the legitimate representatives of the workers. But when unions are given this ability, as they were during the world wars, they act as conservatively as those operating in the Taft-Hartley world. Especially considering the fact that, the legitimacy of trade unions vis-à-vis the state and enterprises depends on their ability to ensure labor peace ... and not only during wars.

That is why, when the system of representation fees was banned for public sector unions at the end of 2018, the union leaders confessed without any shame their and the union's function: to maintain social peace by containing workers under any circumstances.

Representation fees are not only a compensation for the financial costs of representation, but for the political costs of representing all members of the bargaining unit and maintaining labor peace. As AFSCME's attorney pointed out in his oral arguments, representation fees are routinely changed to a non-strike clause in most union contracts. If those clauses disappear, employers will have chaos and discord on their hands.

U.S. labor laws, and the employers who benefit from them, prefer that if there is to be a union, only one should serve as the exclusive representative of all eligible employees in a workplace. Such a scheme imposes a legal obligation on unions to represent all members of the bargaining unit equally, and a political imperative to uphold the terms of any agreement as "the best we can get" (even if it includes concessions on benefits and labor standards). It rewards unions with a guaranteed right to exist and a reliable paid membership base. But unions reward employers with the much more valuable guarantee of the right to manage the company's uninterrupted work while union management has to defuse grievances and discord from the rank and file for the duration of the contract.

The combination of exclusive union representation, representation fees, non-strike clauses, and management rights are the foundation of our unique industrial relations system. No other country structures its labor relations system in this way. If one part is removed ‎...‎ the whole system can fall apart. Employers won't like the chaos this will bring...

Shaun Richman, former director of organization of the AFT

Biden promises in his union plan to repeal state laws prohibiting unions from collecting dues or payments from all workers and the provisions of the Taft-Harley Act that allow them to do so. In other words, Biden will return unions to their wartime status ... to reinforce that controlling function and ensure social peace under a Green New Deal that will suck up the revenues and reduce the purchasing power of workers. So much so that he promises to create a group among his ministers dedicated to promoting trade unionism and a system of sector-wide collective agreements similar to the European one to ensure equal conditions in competition among companies.

From green and unionized economic nationalism to eco-imperialism and trade warfare

Since the Paris agreements, European countries have made an increasingly openly imperialist use of the discourse of the Green Deal. Whether it was to put pressure on Brazil or to face the threats of trade war with the USA, green policies are a tariff barrier of the first order. ...and their implementation is fueling a whole series of conflicts and gas wars around their own borders. In this context, the entry of the US into the ecological transition will not only give scale to the movements of capital homogenizing conditions and technologies between the EU, Britain and the US ... it will also become a central part of the imperialist conflict with China. Biden's climate program is open and brutal about it and points directly to the Belt and Road Initiative (the New Silk Road which articulates the global expansion of Chinese capital) as a target to be destroyed.

In his infrastructure plan, Biden also points out that China produces four times more electric vehicles than the United States... and promises to save the auto industry as it did in the early days of Obama's term. This parallelism is almost a confession that brings us back to the role of the unions. Obama did not really protect workers from attacks on their living and working conditions during the crisis in the auto industry. Instead, imposed these attacks on workers through the UAW. The same union that has covered up the deaths of workers during the Covid massacre to avoid damaging production. This is not isolated or exclusive to the UAW. During the pandemic, both the Democrats and all kinds of unions have dealt with the strikes forcefully and in a coordinated manner.

Now, once again, the worsening of the imperialist conflict, the attack on the living conditions of the workers and the increase in the power granted by the state to the unions go hand in hand.

The Green New Deal and the workers

Unions displayed during the pandemic that they were the first ones willing to sacrifice our lives in order to maintain the profitability of the companies they serve. Now they will be in charge of maintaining social peace during the Green New Deal.

A Green New Deal that is, above all, a massive opportunity for capital, a fast and widespread way to find new applications to place itself in and increase its profitability. But for the workers it means losing purchasing power, losing homes, working under ever tighter surveillance and discipline, and getting into debt beyond what is reasonable so as not to become even poorer. And it could not be otherwise: capital's extra profitability can only come from increased exploitation. The Green New Deal and the speeches about the sacrifices needed to save the planet are only the cover of a plan of gigantic dimensions to make this transfer of workers' incomes to capital a reality.

From the workers' standpoint, refuting the Green New Deal has nothing to do with holding a climate discussion. It's the same as challenging public health policies during the pandemic: it's not about denying the slaughter. On the contrary, it is a matter of denouncing that these policies unnecessarily multiply the victims by putting the benefits of capital before the lives of people. Similarly, faced with the Green New Deal workers cannot fall into the trap of the climate debate, which is a mere red herring. We must affirm that the satisfaction of human needs must be ahead of the profitability of capital. There are plenty of material and human means to change the energy matrix, replace combustion engines with electric motors and improve the habitability of everyone's homes. And it is not necessary to impoverish the workers in order to do this. It only becomes necessary if we take for granted that the system must be maintained and the needs of the very capital which created the problems itself, must be met before doing anything else and at the expense of all of us.