The class struggle, so carefully blacked out by our American media, is becoming an all-out battle for survival for American workers.

Over the past few years, major Fortune 500 company after major Fortune 500 company has been using the nation’s bankruptcy laws to bail out of decades-old pension promises to employees, to weasel out of labor contracts, and to push down wages to 1950s levels.

Northwest, United, US Air, Delta, Polaroid, and now giant Delphi Corp., and before long perhaps one of the major auto companies, have been using bankruptcy as a tool to beat down workers and to escape promises made. In some cases, as with the bankruptcy of Polaroid, the companies have actually mimicked Enron and stolen workers money (at Polaroid, workers were asked, and in some cases required to invest their money in company stock, which then became worthless in the ensuing bankruptcy).

The real villains in this battle are not the companies, which after all are just doing what corporations always do. (Though going back on pension promises, many of which were the result of deals where workers agreed to forgo pay increases in return for keeping their pensions funded, is the kind of double dealing that most people would condemn in their personal affairs.) Rather, the villains are the House and Senate, which have written the nation’s bankruptcy laws so that workers are at the bottom of the list of creditors who have a claim on corporate assets when a company is ruled to be insolvent.

At the top of the list: The IRS followed by the banks and other lenders and investors.
Workers who poured their sweat and their lives into companies don't count as much as bankers who just sat in plush offices on Wall Street and investors who bought bonds issued by the companies.

The bankruptcy tactic--and it is just a tactic because most of these companies were and are not really unable to pay their debts--is now seen by corporate strategists not as a way of restructuring debt payments, which is what it was originally meant to be, but purely and simply as a way of sabotaging workers and slipping out of agreements made years before.

If this assault is allowed to stand, the union movement will be killed off in no time. Union contracts won't be worth the cost of the paper they are written on. Then the attack on workers will really go into high gear.

Ironically, at the same time that Congress has made it increasingly easy for corporations to weasel out of their pension and labor contract obligations through bankruptcy, it has made it harder for those workers and for all Americans, to escape their own crushing debts through bankruptcy. Under the recently enacted personal bankruptcy law, most people will now be unable to have their debts forgiven, but will be instead placed into a kind of 19th-century style debt peonage in which they will be given a schedule of payments they’ll have to meet to escape of bankruptcy. Houses will no longer be protected from creditors.

So just as workers are seeing their jobs lost or their incomes halved courtesy of the corporate bankruptcy laws, they will also find themselves being bankrupted themselves and losing their homes and futures.

One would hope that this atrocity, almost universally supported by Republicans and by the Bush administration, but enacted with the open support of more than half of the Democrats in Congress, would lead to a revolution at the polls next November, now that its grim results are starting to be seen. But with most of the media ignoring the story, or failing to make it clear that the blame lies not with the courts, which just administer the law, or with greedy corporate managers, but with the Congress, which made the law, it's not clear that this will happen. Few Americans know that the bankruptcy courts have their hands tied in these cases; a sympathetic judge cannot put worker pensions at the top of the creditors list even if she wants to.

American workers need to wake up. The labor movement, such as it is these days, needs to make reforming the corporate bankruptcy laws so that workers come first, before bankers and investors, and the personal bankruptcy law so that people on hard times can escape their debts and get a new start, and so that they don’t get thrown out on the street, a sine qua non of support for any candidate for Congress.

This is war, and no quarter can be given.

For other stories by Lindorff, please go (at no charge) to This Can't Be Happening! .