In the heyday of the labour movement, it was often observed that bosses needed workers but workers didn't need bosses. Yet in the third and fourth quarters of 2010, corporate America posted record profits while the Bureau of Labor Statistics reported the real unemployment rate at 17 per cent. Does this mean the bosses have learned to get by without workers? Not exactly, but two reasons for the high profits are beyond dispute. First, corporations are moving more and more of their operations offshore, especially jobs in highly-skilled sectors where the largest savings in labour costs can be made. So they still need workers, but not expensive ones. Second, employees are either working harder and longer for the same salary or are taking a pay cut. In any downturn, employers will push their advantage in this way, but in a recession like this one, the assault comes from all sides: pay freezes, concessions, furloughs, layoffs or casualisation. A third reason - a less familiar one - is the growing reliance on new kinds of free labour. Hard evidence for this is not so easy to muster but the anecdotal record is strong.

LRB 19 May 2011 | PDF Download