The disarticulation of the US working class: The value chain
The concept of the value chain
The concept of the value chain derives, per Wikipedia, from the “science” of business management; it was popularized by Harvard Business School poobah Michael Porter. That should be enough to make any thinking person suspicious; and indeed, the bourgeois theory of the value chain cannot possibly be well-founded, given that bourgeois economics has no credible theory of value. The broad notion, however, is intrinsically attractive to Marxists, who do have a scientific framework for understanding the creation, translation, and metamorphoses of value through the circuits of capital. There is a body of Marxist research on (global) value chains and “commodity studies,” with which I am sadly mostly unfamiliar. In any event, for the purposes of this piece, a very rudimentary instantiation of the concept will suffice.
Fix some commodity in your mind–a wool coat, say–and imagine all the stages in its production and circulation, from being worked up from raw materials, transported through different stages of production, warehoused, shipped, and finally sold to the consumer. The creation, augmentation, movement, and conversion of this value proceeds through a series of stages, easily visualized as the links in a chain; ie, the value chain. The chain metaphor is particularly useful since it is easy to think of distinct value chains “linking” to one another; the value chains for wool and buttons clearly link to the coat’s chain, for instance. Value chains have complex interconnections in any developed capitalist society, and when finance capital is introduced, the chains become even more entangled.
Now in truth the value chain is a cycle, since the proceeds from sale flow back to the capitalist for (expanded) reproduction. Abstractly, then, it is possible to “start” the chain wherever one wants. However, the capitalist system is actually dominated by the circuit M-C-M’ (where M’ > M) so the natural start or “top” of the value chain is the advance of money capital for the next production cycle, with the sale to the final consumer at the end or “bottom” of the chain. Thus it is possible to naturally orient each value chain and speak of moving “up” and “down” along it.
As mentioned above, a commodity that is itself a means of production for another commodity can have the end of its value chain attached to the chain of the other commodity. By repeating this procedure, we can create “long” value chains that terminate in the sale of means of consumption to final consumers. Furthermore, the set of chains tends to “spread out” at the bottom, as one means of production (eg, wool) enters into several means of consumption (eg, coats, socks, blankets).
Let’s turn to the question of how workers are distributed along the value chain. Here the bourgeois conceptualization of the value chain has a useful moment, since it stresses how all staff interact with the chain, whether or not they labor productively (ie, increase the quantity of value). Safety inspectors, for instance, are not productive workers, but they can break the value chain by ordering a halt to production. Bourgeois management has little sense of whence value comes–capitalists think of themselves as “value-creators,” after all–but it does study carefully how employees “touch” the value chain.
My argument here is that, under neoliberalism, an increasing proportion of US workers have been “pushed down” the value chain, with the bulk of employment growth occurring in jobs “close” to the final consumer of means of consumption (servers, fast food workers, health care providers, etc). Although workers in such jobs are by no means devoid of power, their position low on the chain restricts their ability to affect the whole chain; consider, for instance, how franchise arrangements protect the parent corporation from “labor trouble” at the shop level. Additionally, action by these workers tends to disrupt only one or a few value chains, since action higher in the chain has a greater chance of cascading into other chains via links. For example, a strike at one Starbucks can be “gotten around” by walking one block to the next Starbucks; a strike at that Starbucks can be elided by walking another block to Dunkin Donuts. By way of contrast, a recent strike of office clerks at the Port of LA shut down a major transshipment hub, to the loss of an estimated one billion dollars per day.
In other words, all other things being held equal, workers’ economic power decreases as one proceeds down the value chain. I contend that this has contributed to the disarticulation of the US working class since, as a consequence, fewer workers feel powerful in their workplace context. Of course this does not imply that the working class has lost its social power as a whole: since workers create all value, the relatively smaller groups of workers higher on the value chain have retained their power–indeed, in a more concentrated form. Nevertheless, it is the movement of the workforce down the chain that “sets the tone,” especially given the deterioration of organizations spanning the whole class.
Towards an empirical case
To fully establish the empirical case that the American workforce has shifted down on the value chain is beyond what this essay can hope to accomplish; for now we will have to settle for some fairly rough, albeit unambiguous, analysis that suggests the correctness of the thesis.
First, let us consider that workers in goods production, transportation, and utilities (GTU) are on average situated higher on the value chain than the average service worker. This is not always the case, as the example of the port clerks shows, but this must be true on the whole since 1) goods never proceed “directly” to consumers under capitalism, but have their circulation mediated by sales, the fact of which always adds “end links” onto the value chain; 2) transportation intercedes all along the value; and 3) likewise with utilities.
The relative and even absolute decline in US GTU employment in the neoliberal period is shown in the table below, which is drawn from the Bureau of Labor Statistics (BLS) Current Population Survey.
|Jan 1980||Jan 1990||Jan 2000||Jan 2010|
The sharp relative drop in GTU employment over the last thirty-odd years tends to imply that the workforce is being pushed down the value chain.
It is possible to conduct a more direct analysis using the BLS Occupational Employment Statistics; this is still not totally precise since two workers with identical occupations (eg, clerk) may have completely different positions on the value chain. However, by selecting those occupations that are frequently low on the value chain, such a retail sales or food preparation, we can obtain results suitable for understanding qualitative trends. We are, unfortunately, also limited by the fact that “apples-to-apples” data is only available in the years 1999-2012.
Let us take for comparison, then, the endpoint years. By my calculations (available in full detail here) in 1999 just over 42% of workers were in occupations that tend to be low on the value chain; by 2012 that had jumped to just over 48%. In absolute terms, nearly nine million workers were added “down-chain” between 1999 and 2012, even though the total size working class only increased by 4.2 million in the same period. (My analysis tends to be conservative; I suspect that the majority of the US working class is situated low on the value chain.)
Towards a theoretical case
Why has the American workforce been pushed down the value chain? I cannot say that I have a worked-out “narrative” about the factors that compelled this shift (assuming it exists). It generalizes the phenomena of “Walmartization” and the “McJob,” although such relabeling brings us no closer to an answer. In lieu of a conclusion, then, I’ll try to identify a few major issues to spark further discussion.
First, the problem of distribution along the value chain interacts with the secular tendency, under advanced capitalism, for relative decline in the productive labor force. For instance, Moseley demonstrates that ratio of unproductive to productive workers in the US declined from roughly 1:3 in 1947 to about 5:8 in 1977. Today unproductive workers likely outnumber productive ones. Although unproductive workers are by no means always low on the value chain–port clerks are unproductive and high on the chain; a barista is productive but low on the chain–there is a correlation, particularly given the large number of retail jobs.
Furthermore, as Turl points out, “one of the main reasons for the relative growth of retail versus the relative decline in manufacturing jobs is that the massive explosion of productivity in industry has not been kept up with by a corresponding productivity increase in retail.” Hence a huge amount of commodities produced by a relatively small number of production workers must be “cleared” by a relatively large number of sales workers. This dovetails with the geographical extension of the value chain, with countries such as China becoming export platforms to the all-consuming US.
Finally, the growth of “down-chain” employment also reflects the “capitalization” of American health care and education, which has sparked off an explosive growth in both sectors. Although there are now major efforts to automate, mechanize, and computerize production in these sectors, the inherited processes rely on personal production of service-commodities by front-line workers; eg, nurses delivering care or lecturers giving lessons. Thus, somewhat unusually in a modern economy, the productive workers sit low on the value chain. (The growth of restaurant labor, which has the same quality, has probably been spurred by the mass entrance of women into the labor force and the consequent breakdown of patriarchal nuclear family arrangements.)