Last month, approximately 90% of Chicago Teachers Union (CTU) members voted for strike action. Only 1.82% voted against. This was a shock to the local administration.

Not only is this the heart of Obama country, where unions are expected to play ball with the Democrats in an election year. It is also a city where, thanks to Mayor Rahm Emanuel, teachers are not allowed to strike unless more than 75% of union members vote for it.

Yet it is not just the local establishment that will be unsettled here. This is getting national attention in the US, and a strike could be an embarrassment to President Obama. Moreover, it could re-ignite the American labor movement at a time of global unrest.

The basis of this dispute is what is innocuously termed "school reform". This is a process of privatization and union-busting. Since the 1990s, Chicago has been a laboratory for such reforms, which have been rolled out across the country. The program enjoys the support of the Democratic leadership as well as leading pro-Obama liberals such as Davis Guggenheim, whose film Waiting for Superman was a lengthy attack on teaching unions and a tribute to private schools.

Chicago intends to open 60 new privatized, non-union "charter" schools in the next five years. Public schools are being closed to make way for this change and capital spending has been slashed. The CTU's new leadership has been driving a campaign to tackle chronic underfunding in Chicago schools, and broaden the curriculum. They describe the system as one of "educational apartheid", and demand an elected school board which reflects the needs of the city's population.

But the final provocation was when the "reformers" increased teachers' working hours by 20%, while cutting a promised 4% pay rise in half. They falsely imagined that the CTU would be a pushover, having recently elected a bunch of "rookie" candidates to the leadership.

In fact, the victory of these "rookies", from the Caucus of Rank-and-File Educators (CORE), demonstrated two things. First, it showed the unwillingness of members to be as compliant as the leadership has been in the past. Second, it proved the new leadership's ability as grassroots organizers. They showed the same skill in building support among teachers for strike action in a series of mock ballots and mass public meetings.

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The administration and local media are now running with the story that this is purely a fiscal problem. The government, they say, is trying to close a £700m deficit. But the teachers' union has obtained, through a Freedom of Information Act request, evidence that the money that was to pay for teachers' salaries has been spent on paying police officers to patrol public schools. This is typical of reform in the neoliberal era: budgets are cut, but just as significant is the shift in the balance of state intervention away from welfare and toward coercion and discipline.

Having effectively built support among teachers, much now hinges on the union's ability to win over parents' groups , who have been alienated by the budget cuts. Parents are a key target of the administration's propaganda. Rahm Emanuel has tried to appear above this dispute, but his mayoral campaign in 2010 was led by education "reform", and his allies are running campaign ads attacking the teachers, and encouraging parents to pressure them into dropping their campaign.

But this is just one aspect of a general problem facing the union. Unions in America have been so diminished over the years that membership is concentrated in a public sector rump. Their struggles can thus appear as sectional, even where they have much wider significance. Union members in Madison, Wisconsin won widespread support. In the end, however, they lost the initiative by falling back on a narrow client relationship with the Democratic party. Pushing a recall vote against Governor Scott Walker, they hemorrhaged members while the new anti-union laws were passed, then lost the recall vote.

Chicago teachers don't even have the option of appealing to the Democrats, who are their antagonists in this case. But if they are to succeed, they will need allies. The unions have strategic power, but they are too small to fight in isolation. Some Chicago unions found that reaching out to Occupy last year helped them resist right-wing attacks.

If this strike goes ahead, it will be the first such strike since 1987. But the stakes are much higher. Teaching activists say this struggle recalls the PATCO dispute. When the airline workers union failed in that battle with the Reagan administration, it was a setback for the whole American labor movement for decades.

A failure in this case would potentially be much worse than PATCO. On the other hand, a success would partially redeem the heavy defeat inflicted on unions in Wisconsin, and signal a fundamental shift in American politics. And more than this: from Sichuan in China to Asturias in Spain, labor protests are growing in scale and militancy. America's influence is such that a return of the labor movement in the US would tilt the balance in favor of workers globally.