From the superficial to the real “real world”: underemployment, wages and the future for the majorit

Don Sutherland, June 2018

I like The Guardian Australia’s Greg Jericho’s work and, as some of you may know, I share it around quite often. This piece maintains his high standards with clear information that we can all work with in various ways, including of course in the activities of the Change the Rules Campaign.

It includes this:

“It is not migration numbers per se that is the issue, but that temporary workers brought in are being done so by companies seeking to ensure lower levels of unionised labour and higher levels of non-permanent staffing, which combined reduces the capacity for workers to argue for higher wages.

In effect the system is changing to keep underemployment high in order to ensure that wages growth remains low.

And that is just how businesses like it.”

Nevertheless, there is still something missing in Greg’s approach. And this often crops up when you think about it. (It’s true also of the approach taken by the work of the Australia Institute and its Centre for Future Work, darlings of many in the labour movement, Per Capita, and the Evatt Foundation.)

In this case the pretty obvious missing bit is the simple question: “Why is it that ‘businesses like it’ like that?” That is, why do they like a high and not declining underemployment rate, associated migration numbers and low levels of unionised labour. We can add why do they like deliberately created labour laws that prevent workers from effective combination, effective unionism and effective bargaining for a better deal.

The answer to this question is for some reason tricky territory.

It is all about profits and profitability. Profits and profitability are clearly not where the employers want them to be. Getting them to a better level, especially profitability, requires extra exploitation of the workforce and this is made more possible by unemployment and underemployment being a “discipline” on workers alongside of the penal powers aligned against them in the Fair Work Act 2009.

So, there is a “logic”, although perverse, to the current situation.

Challenging that logic means you are challenging the logic of the society, the system that we live in, not just work in. Ignoring that logic means that the real-world working of the system of exploitation continues. It’s more important to prevent discrimination but not exploitation, rather to tolerate it.

Greg Jericho is not the only one to fall short in analysis. Along side of him last week the Reserve Bank Governor gave a speech to a mob of manufacturing employers (brought together by their ‘union’, the Australian Industry Group). He covered similar territory to this and other articles by Greg Jericho and, he also did not discuss profits, at least in his published speech and in newspaper reports. (There was a single and anodyne reference to “wages and incomes”.)

Of course, its quite possible that there was some discussion about profits that is not revealed in the media reporting or in the Governor’s published speech, but we don’t know about that.

If the Governor did not discuss the problem of profits informally then he would have been the only person in the room not thinking about them. Put 100 or 1000 employers in a room and the ones NOT thinking about profits will be the ones going down the toilet pretty soon.

The Governor did discuss new investment and noted the recent lift in investment. However, he was at pains to point out that much of it was not in equipment but in software and the like and he is aware of the limitations of that type. He urged more investment in new technologies by more firms. Some, he said were doing it quite well, but too many were not. All is couched in terms of productivity but of course the real benchmark is profitability. Productivity is not fundamentally about anything but profitability … in the current system. If there are any temporary positive side effects for a part of the workforce they also have their value.

Sounds like good advice from the Governor, yes?

But for most workers, it’s a problem that works like this: new technologies are a capital investment that for a time will reduce profitability … unless the rate of exploitation of the workforce is maintained and even increased. And that’s where the FWA09, especially it’s dispute settlement and bargaining laws at both the enterprise and award levels, works so well for the employers and the champions of the system like the Governor of the Reserve Bank.

It’s also about competition: getting the competitive advantage that beats your competitor and may even lead to a successful takeover of her. What that might mean for the workers employed by winners and the losers is irrelevant or at best of collateral concern.

That’s why the Governor’s whinge about wages suppression is crocodile tears – appearance and system management a la the World Bank – and that’s why he does not endorse the Change the Rules campaign.

It’s also why the parliamentary Labor Party and some of the laborist controlled unions want to restrict the scope and effectiveness, and the full potential of the Change the Rules campaign. Especially when it comes to the right to strike and the right to bargain collectively for improvements to industrial awards.