By Jon Singer
A confidential paper by employment minister Peter Reith, revealed on February 17, shows that the Howard government's recent claim that a 5% official unemployment rate is possible is based on pursuit of wage cuts, especially among the low-paid and less well organised, and establishing the need to "earn" welfare payments for unemployment. Poverty-level wages, and conditions that will drive the unemployed into jobs paying those wages, are seen as the way to boost profits, supposedly leading to increased business investment and jobs.
Reith claimed that the proposals, which came from an exchange between him and Prime Minister John Howard, were really "a third term agenda" (to be implemented after the next election). But the proposals are only a deepening of the government's current policy course.
Reith is concerned that, after years of falling under the Labor government, real wages have increased in the recent past. Moreover, organised workers have fared best overall.
So the Howard government is looking for new ways to reduce workers' resistance to lower living standards. Reith spelled out the motivation in a business lunch speech last year: "Never forget the history of politics and never forget which side we're on. We're on the side of making profits. We're on the side of people owning private capital."
The paper proposes establishing a single benchmark for determining whether workplace agreements leave workers worse off. This follows the February 5 Australian Chamber of Commerce and Industry submission to the Australian Industrial Relations Commission (AIRC) living wage case, which proposed that the federal minimum wage (now $373.40), with all penalties and loadings cut out, should replace award rates for the "no disadvantage" test.
Living wage cases would now be before a panel composed of the AIRC, the Productivity Commission, the Reserve Bank and Treasury — a body that would lack even the pretend neutrality of a court.
After Howard suggested applying his "promise" that no workers would be worse off under an agreement than an award only to "existing employees", the paper proposed creating two tiers of pay and conditions. Employers would be required to meet only certain minimum conditions and would be exempt from unfair dismissal laws for workers newly hired from among the unemployed.
Further Reith suggestions are allowing businesses or even the small business sector as a whole to opt out of the federal award system if some conditions are met, and reducing award conditions in areas of high unemployment.
Mutual obligation?
As an incentive to the unemployed to take on low-paid work — in the same sense that having a gun pointed at you is an incentive to follow orders — Reith throws up extending the government's "mutual obligation" policy to all who have been receiving the unemployment payment — Newstart Allowance (NSA) — for more than six months, as has already been implemented for those under 25.
This would make their "continued receipt of [NSA] ... conditional on the recipient being engaged in useful educational activity, community service or other productive workplace activity " some paid work or the unpaid work for the dole.
The mutual obligation policy extended the previous ALP government's "reciprocal obligation" (which forced those unemployed for more than 12 months into intensive case management programs) through compulsory work for the dole.
Similar compulsory work requirements already existed in many Aboriginal and Torres Strait Islander communities under the Community Development Employment Program. People referred to work for the dole are required to work 24 or 30 hours per fortnight on approved projects (the most common involving manual labour on urban beautification or rural environment programs) or lose their payment.
Welfare rights bodies have criticised the compulsion to work for unemployment payments as unnecessary (provisions for undertaking voluntary work already existed), inappropriate (being similar to a community service order for a criminal offence when no crime has been committed) and having problems in implementation, such as selection procedures and lack of injury compensation and leave rights.
Work for the dole also threatens to replace wage workers with workers on benefits. The unions in sectors such as education and child-care generally seem to have opposed projects which appear to threaten existing positions. But overall the union movement has fallen in behind the ALP's support for work for the dole, to which it only proposes to add a training component.
Only about 6500 people are at present in the scheme — less than 1% of the total number of unemployed on benefits and 0.1% of the total work force. This is not yet comparable to situations such as that in the US, where many local government jobs are being taken on by "welfare workers".
The main effect the government has sought through work for the dole until now has been ideological — to eliminate the concept of the right of unemployed to welfare payments. Last year employment services minister Tony Abbott said it was necessary to "explode the idea that society owes us a living", while Howard told an Australian Council of Social Services conference that work for the dole asks the unemployed "to earn their keep".
This revives the spirit of the 1930s "susso", when the unemployed were forced to work — and not for normal wages but for mere sustenance payments.
The Welfare Rights Centre in Sydney and ACOSS have criticised this as a shift in emphasis, from a social obligation to generate jobs and help job seekers get them to one borne by the unemployed. However, mutual obligation itself is a false concept of a "social contract".
Without choice, there can be no obligation. Unemployment is a necessary feature of a capitalist structural crisis, such as the one that has now existed for 25 years or more, regardless of the desires of the unemployed people. In fact, unemployment is a means to resolve the crisis for capitalism.
Opposing work for the dole therefore is part of a broader political fight in which the rights and interests of employed and unemployed working people are united.