Unemployment 'solutions'


Unemployment 'solutions'

One third of the official 1 million unemployed, or 371,000 people, are now classified as long-term unemployed. Prime Minister Paul Keating's announcement of a new committee to look at "policy options" for responding to "profound changes" in the labour market is largely a distraction from what big business — and therefore the government — has in mind.

To get an idea of the real agenda you only need to turn to the columns of the economics writers of the various dailies. There, unemployment is the pretext for even more radical "labour market reform", i.e. the dismantling of all legislation and customs that offer protection to wages. Big business has been encouraged in this pursuit by Keating's post-election promise of an eventual replacement of awards by "enterprise agreements".

The editorial in the Sydney Morning Herald of June 1 began: "If Mr Keating's inquiry into employment is not to degenerate into a political stunt it will have to have a hard look at many of the assumptions Australians take for granted where work is concerned. Institutions like the minimum wage immediately come to mind."

The abolition of minimum wages was most delicately argued by the Financial Review's Steve Burrel. He says the minimum wage undemocratically restricts the workers' "ability to offer themselves for wages which will give them jobs", the freedom to "bid themselves down". Burrel is well aware of how far down workers would have to bid: he quotes an assessment by Professor Bob Gregory that real wages would have to be pushed down about one third in order "to soak up unemployment". It doesn't bother him that such a policy may produce a class of "working destitute".

Ross Gittings of the Sydney Morning Herald in his non-think piece on the Keating unemployment committee, states that it will have to pose difficult questions for "the comfortably employed". The aim is to pit one set of workers — those who currently have jobs — against those out of work.

Burrel and Gittings seek to convince us that the people who have to make sacrifices are the employed workers. There is never any hint that those who live off dividends, speculation, rents and other forms of profit might need to make the sacrifices. The real wages of the "comfortably employed" have already been eroded by over 30% since the ALP came to power.

Reducing the working week without any cut in wages would very quickly eliminate unemployment. Wage bills would, of course, go up and so in many cases profits would go down. Conversely, reducing wages simply increases profits.

According to business spokespersons, increased profits mean more investment and therefore more jobs. However, real wages have been going down for over 10 years. And, according to the latest figures, n going down. It has dropped from almost 10% of GDP in the '60s, to over 8% in the early '80s and now to only 5%.

Business invests in ways that seem to promise the highest profits. There is no guarantee this means job-creating productive projects. Despite falling wages and good profit reports for most companies, investment in plant and equipment has dropped dramatically. All the talk of "micro-economic reform" is about getting workers to work harder for less pay, not about giving more people jobs.

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