Cut profits, not wages
Like antiquarians from the age of Atlantis, two fossils from the trade union movement and current Labor Government ministers released their coprolite and let forth petards fit for hanging
Their stench rose to heaven and the gods of the ACTU and unions were displeased. Chris Cain from the Maritime Union told Ferguson to get some Labor principles or go and work for Chevron. As Minister for Resources, he already does work for Chevron, Chris, he already does.
Simon Crean and Martin Ferguson, both former Australian Council of Trade Union leaders, both argued for unions to return to the ‘good ole days’ of the Accord in the 80s and 90s and put productivity first, ahead of wages.
The Accord was essentially a wage cutting con. It was so successful that it saw industrial action dry up and wages fall behind inflation. It laid the groundwork for the enterprise bargaining trap we are now in and for the rise of Howard to power.
The Accord was an important part of the neoliberal agenda of Hawke and Keating. It was the consensus approach to emasculating the union movement, with fake promises of good times and real jobs and puffed up importance for the trade union heavies. (As compared to the more confrontational emasculating approach of Howard).
The shift in wealth from labour to capital began with Hawke and Keating. Locked in and hamstrung by the Accord and Enterprise Bargaining, the union leadership could not and would not resist the rise of Howard and his extension of Labor’s anti-worker policies.
The election of Labor in 2007, mainly on the back of hatred of the Howard’s Workchoices laws, saw the ALP Government implement the same policies more or less under its Fair Work legislation.
The end result of all this has been a more unequal and unjust Australia with the share of national income going to capital at its highest since figures were kept and that to labour its lowest. Labor’s Australia is where the top 20% of income earners own over 60% of the wealth, and the bottom 20% own just one percent. Gina Rinehart receives (‘earns’ is too inappropriate a word here) in one second what a person on the minimum wage receives in a week. Her receipts in a minute are what a minimum wage worker earns in a year.
This is Labor’s legacy.
The Accord and its now grown children, Workchoices and Fair Work, have been important contributors to this increase in inequality, and to the effective increase in the working week in Australia.
The bosses are now carrying on about productivity. They really mean profit. Increased productivity means more can go into their pockets as profit.
There are two aspects to productivity. The first is to get workers to work harder and/or longer. The second is to invest in or develop new machines, plant and processes that produce more goods more cheaply. But since labour is the source of new value this means, all other things being equal, that as investment in capital increases at a greater rate than in labour, the rate of profit has a tendency to fall.
Neoliberalism is about addressing this fall. But it does so without realising or accepting that the problem of the falling rate of profit lies at the very heart of the way capitalist production is organised.
Profit rates rebounded with the neoliberal onslaught of Thatcher, Reagan, Hawke and Keating (and their puppets,Crean and Ferguson). But they didn’t return to the halcyon days, and since about the mid 90s the decline has, with some ups and downs, been ongoing.
This general picture for the developed world may not be the case for Australia. A study up to 2001 showed that the Australian experience followed that of the rest of the major economies. However it may be, and the research is tentative, that the profit rate in Australia has gone up rather than down since 2001.
However, neoliberalism is the dominant economic ideology for the reason it is about both stabilising and increasing profit rates. The base from which that is to occur shapes the ferocity of the attacks on workers to cut their living standards and so increase profits, but doesn’t stop the attacks.
Cream and Ferguson made much of not making big wage claims, ‘for future generations’. Of course this misses the point.
Bosses have been getting more and more of the wealth we create and now Crean and Ferguson want to give them even more.
Take mining workers. On average, and including managers as well, in 2010, they were paid $117,500. Yet the value per worker they created was $608,000.
In other words by paying workers $117,500 each the mining bosses received $608,000, a net gain from labour of just over $490,000.
Ands where does that go? To the likes of Gina, Clive and Twiggy. What Crean and Ferguson really want is for more profit to go to the Rineharts of the world.
We workers create the wealth of society and the bosses expropriate it.
Maybe instead of cutting wages or holding them down as Crean and Ferguson did and now want, we should cut profits and increase wages. How? We can only win decent wage increases through strike action.