Inflation solutions mock September’s Jobs & Skills Summit.
Written by: John G. on 1 March 2023
The Government trumpeted the Jobs and Skills Summit outcomes “to deliver secure jobs with growing wages, boost incomes and living standards”. Inflation and the solutions being dumped on us are putting paid to those fantasies.
Inflation is playing havoc with people’s budgets. Electricity and gas prices are up double digits. Groceries and petrol costs keep rising. Interest rates have rocketed up at rates not seen in decades.
In contrast wages have stagnated in dollar terms, losing buying power week in week out.
What is being done to get us out of the downhill slide in living standards?
The Reserve Bank is force feeding interest rate rises. Governments, State and Federal, are fiddling pretty uselessly around at the edges. It is reminiscent of the story of Nero while Rome Burnt.
The Reserve Bank Governor has been going around declaring its job is to look after people, apparently by bashing them with increasing interest rates until unemployment hits around 6% and people are consuming much less than now. Thanks pal!
With interest rates, mortgage repayments and rent costs shooting up, a big portion of the workforce are forced to cut their consumption. It begins by cutting out little luxuries that give life some delight, then cut back the quality and then quantity of daily necessities. As you go down the food chain the starting point of cutting back comes closer to cutting back on basic necessities of life.
People’s living standards shoved down is what they aimed for as the solution to higher costs and lower buying power. Their solution to people short of buying power is to make our buying power even lower, and quickly. Lower economic growth, means people eat less, do less, live less, and hundreds of thousands are driven into poverty.
That’s what the Governor and Board of the Reserve Bank aim to do. Its also behind government inaction, other than the reintroduction of the petrol tax last year. Its making working people pay to secure the wealth garnered in record profits by the massive, mainly foreign-owned, corporate monopolies at the centre of Australia’s economy.
Those big rich monopolies have the power in Australia while the working class is at a historic weak point, with its lowest union membership in a couple of lifetimes, with a gaping leadership vacuum, and workers divided into enterprise agreements. Solidarity as a class is outlawed.
People at work have been producing furiously, unemployment was at historic lows, and the wages portion of the economy was also at historic lows. The Centre for Future Work confirmed that last week. Public and government-funded sector workers in particular have been campaigning for more staff, easing of workloads, and higher pay, engaging in wave after wave of strikes. Profits have been and still are at historic highs. Prices have been rising.
The squeeze on people’s pockets is business’s answer to capitalism’s problems with inflation. Hit the people who work for a living and those that are now out of the workforce to fix the problems brought on by record profits. The profiteering foreign corporate monopolies at the heart of the problem are cushioned from the impacts of inflation and their solution for it, economic recession.
People are forced to cut their consumption because they are spending their hard earned on mortgages and rent. With less consumption, less sales and 400,000 people are thrown out of work. So much money is removed from people’s spending power that the economy slows down, people consume less i.e. living standards drop and hundreds of thousands are impoverished, products come into oversupply and prices drop, starting the cycle of boom and bust again, or so the theory goes.
The obvious first response is to make the rich corporate monopolies pay. They’ve got billions. The Commonwealth Bank announced $5.7bn profit for the 6 months to December last. Wesfarmers, parent company of Coles, Kmart, Bunnings, Target, Officeworks, API, Priceline, Soul Pattinson, Blackwoods, Geeks2U, CSBP chemicals and fertilizers, Covalent Lithium, and more announced profit of $1.4 bn up 14%. Woodside Petroleum made $7.7bn. Last financial year ANZ Bank took in $6.2bn Net Profit, Westpac Banking Corp $5.5bn, Commonwealth Bank $9.6bn, National Bank $6.9 bn, Fortescue Metals Group $6.2bn Profit.
The bankers and financial sector have been rolling in it particularly. Just think of the big 4 banks’ take last year after their accountants had hidden what they could, $28.2bn, equivalent to $2,150 for everyone who works for a wage in the country.
They can pay. The corporate monopolies should be made to pay.
The Summit, another step on a stairway to nowhere
It was all supposed to be sorted after the Jobs and Skills Summit in September last.
The ink has barely dried on the summary of the Summit’s Outcomes Report; “As a result of the consensus reached at the Summit, immediate actions will be taken … - to help deliver secure jobs with growing wages, boost incomes and living standards and create more opportunities for more Australians. The Summit has also laid out priorities for further work and future action.
‘Key to these outcomes are the objectives of full employment and growing productivity … – they are at the centre of the Government’s economic agenda.’
The Summit gave some cover for government to adjust the Fair Work Act to improve the position of workers by removing some outstanding inequities and discrimination and to pump support into TAFEs and apprenticeships. However, the Summit, touted as leading working people towards better times, ran into corporate monopolies drowning in record profits, floating on crushed wages, heaving workloads, growing work-times and prices hiked above inflation.
6 months after the Jobs and Skills Summit and the workforce has the exact reverse of the promoted outcomes. Not secure jobs, not growing wages, not boosted incomes, not full employment. What we’ve got now are higher unemployment, higher under-employment, lower participation in the workforce, and more insecure employment on top of lower wages and buying power being whittled away by inflation.
The band-aids from the Summit, at their root, provided better conditions for people to sell their capacity to work, to sell themselves for better wages, and more secure conditions of employment. Where they have been implemented, and to the extent they get implemented, they relieved some pressures on trade union organisation, relieve some aspects of discrimination, particularly gender, disability and LGBTQI discrimination, and provide some supports to those discriminated against. That’s important, very important to the people getting some relief, which there hasn’t been lots of evidence of beyond aged care workers. But it leaves capitalist power over society untouched, as we are now finding out in all its disappointing pressure on everyone’s wallet.
Now women suffering wage discrimination, the notorious gender wage gap, find that successes improve their situation relative to male wages, but male wages too are floundering behind inflation. Women, the disabled, LBGTQI people get an extra weight off their shoulders but find they share the exploitation and oppression their straight, able-bodied, male colleagues, partners and friends are burdened with. Like a prisoner out of solitary, they remain in the gaol of capitalist exploitation and oppression alongside the other captives of capitalism. It lifts the level of solidarity for all and opportunities for stronger unity in struggle but it hasn’t removed the essence of exploitation and oppression integral to capitalism.
It establishes a stronger foundation of us all sharing the burdens, for more unity in the fight to end all oppressions.
Such wins are being compromised. The buying power of the whole class of wage employees is smashed to prop up the system of corporate monopolies accumulating enormous wealth. Their survival and their system’s survival are being secured by hitting the working class as a whole.
The Summit proved to be another example of how exploitation and discrimination against the working-class is integral to capitalism in operation. Relief from difficulties, welcome as it is, is temporary and conditional, difficulties arise again in new forms.
Struggles for relief through reforms, leaving capitalist control untouched, are vital to people’s well-being but are not a solution. In fighting for relief, its vital to keep in mind how temporary any relief is and how vita it is to get and stay organised to meet the future needs of the people as capitalism finds new ways, new forms for the same old difficulties to assert themselves again.
Real relief, unconditional and permanent relief for us all, requires bringing capitalism’s exploitation and oppression to an end, consigning capitalism to the dustbin of history where it belongs.
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