Should labour support the demand for a Basic Income? In response to the threat of automation, the rise of neoliberal policies and the weakening of trade unions parts of the Left have come to champion BI as a policy that can save the working class. But is this the best way to fight these threats? The labour movements’ own history tell us that not only are these issues not new, Basic Income is hardly the best response.
In 1953, facing rising unemployment as the Korean War slowed to a halt, a debate emerged in the United Auto Workers (UAW), as well as most other CIO led unions, about how the union movement should respond. Millions were thrown into unemployment that year. Wildcat strikes had forced the company to reopen its contract and raise wages to redress workers’ concerns about rising inflation during the Korean War.
GAW or ’30 for 40′?
At the UAW convention that year two competing visions emerged about how the union should respond to job losses, inflation, speed-up and mechanization.
On one side was UAW’s President Walter Ruether, who advocated for the Guaranteed Annual Wage (GAW). The GAW was to be paid to workers for a set period of time after they had been laid off by the company. Unlike unemployment insurance, the GAW was not deferred wages. It was seen as a way to discourage short-term layoffs and ensure workers are protected beyond government unemployment insurance programs.
On the other side were UAW locals in Flint, Detroit, Cleveland and other industrial centres who advocated for the ’30 for 40′ solution. They wanted to reduce the amount of working hours in the contract to 30, but keep the pay equivalent to 40 hours. The idea was to reduce the working time of workers in order to encourage the company to hire more people.
Automation and unemployment
A report by the CIO at the time calculated the amount of workers displaced by speed-up and mechanization was roughly 1 million to 1.75 million workers a year. The debate inside the UAW spread to other CIO unions facing the same conditions, the ‘30 for 40’ demand became quite popular amongst the union ranks.
Reuther, who had been talking about the GAW since 1951, began to make a coordinated push in order to defuse what he saw as a dangerous demand to reduce the work week. The ‘30 for 40’ demand would require the leadership of the UAW and the CIO to launch a coordinated, sustained, and militant fight to squeeze a major concession from employers. This would risk upsetting the post-war compromise which Reuther and other labour leaders were not willing to do.
The GAW on the other hand sounded more revolutionary than it actually was. While Reuther had promised it would pay full wages for an entire year for all autoworkers who were laid-off. The reality was far different.
The Rise and Fall of GAW
The economic turn around in 1955 made the ‘30 for 40’ demand less pressing amongst the rank and file, though it continued to a staple feature of the labour Left for sometime afterward. Reuther promised to wage the fight for a shorter week, while also maneuvering the union to make GAW a priority in the 1955 bargaining round. What the UAW received from Ford and GM was a GAW for its most senior workers at roughly 60 percent of wages for 26 weeks.
The GAW, or GI as it came to be known, remained in effect, though much reduced, in many auto-contracts until as late as 2007, when it was bargained away during a recession. Other unions in the steel and garment industry bargained similar positions. Instead of stemming the tide of unemployment, mechanization, speed-ups and concessionary contracts the GAW fit perfectly within the logic of UAW contracts of trading away control over production for wage and benefits that were to be whittled away later.
Reducing the work week
The GAW in reality was not a threat to employers. The targeted nature of the GAW, as opposed to the sweeping demand for a reduced work week, meant it was a modest cost of doing business. The leadership of the UAW was able to use the GAW to diffuse more radical class demands emanating from the shop floor.
Understanding the GAW as an unworkable retreat from fighting for reduced working hours and greater control over production helps us to situate the modern debate over how the Left and labour should respond to the threat of automation and understand Basic Income. There is no need to abandon the fight for a reduced work week, increase pay and job security for the illusory promise of Basic Income.