Amongst credible economists and political leaders (so, not including Malcolm Turnbull and Scott Morrison), it is universally accepted that Australia, like most other developed economies, has a wealth and income inequality problem. There are books and essays being written and read every minute about why this problem exists, but let me simplify in the words of a writer, not an economist: the people who own the capital (the business owners, shareholders and executives) are keeping profit from their investments for themselves, rather than dividing it amongst the people whose labour contributed to the return. This behaviour explains why company profits were up 40% to March this year, yet wages were only up 0.9%.
Before I go on, just a quick word about the behaviour that led to this outcome. You will often hear company executives and business journalists using passive language when talking about company profits and the way they are distributed amongst shareholders, executives and workers. Investments apparently ‘flow’, like water from a tap, as if nature intended shareholders to get a better deal than the workers who created the wealth. Anat Shenker-Osario makes the excellent point that this language erases responsibility for the actual decisions that led to these outcomes. Business owners and executives don’t stand in the hallway of their office and watch money flow to various stakeholders in imbalanced proportion, coincidentally, much of it into their bank accounts. They choose to make this happen.
If we, workers, are concerned about this situation of growing wealth inequality, we need to do something about the culture of what is accepted behaviour amongst business owners. We need to reassess our own language and culture around the relationship between what we do for a living, and with those in control of how much we get paid.
Another caveat here. The business owners should also be concerned with flat-lining wages and the resulting growth in inequality. Who is going to buy their products if no one has any money left after necessities? As this article points out, 60% of Australia’s economic growth is consumer based. Those consumers are, for the most part, the very same people who work for a living – who sell their labour and who haven’t had a meaningful pay rise in four years. Business owners and leaders don’t seem to fully understand this fact; no doubt they hope everyone else gives their workers a pay rise, but they’re safe not to do the same. In the long term, this selfishness is clearly to everyone’s detriment.
So what is a worker? It’s time we talked about this question, because I fear there are far too many of us who don’t fully comprehend what it means to sell our labour. I know a union secretary who has been told by members of his union that they don’t want a pay rise as they’ll be priced out of the market. These are workers who are qualified and experienced trades people. Yet, they have drunk the neoliberal-kool-aid that their bosses have been serving up forever which makes them fear that more pay will make them a bigger liability for their boss and they might be got rid of.
Let’s just get something straight right now. The boss doesn’t hire someone to do work for them out of the goodness of their charitable heart, and they don’t keep them employed because they’re nice people. I’m not saying aren’t good person, and are purposely trying to screw over their workers. But what I am saying is that people who are paid to do a job need to understand that without them doing that job, their boss couldn’t run their business, couldn’t produce profit, and would have no return to show for their investment of time and money. The boss needs the worker just as much as the worker needs the boss. The resulting compact between a worker and a business owner goes something like this: the business owner invests in setting up a business, contributing capital such as an innovative idea, market knowledge, physical resources and money. If they can’t create profit with their own two hands, they need people to do work for them to co-create profit from this investment. It really is as simple as that in pretty much every boss/worker relationship.
Yet, somehow workers have become so brow-beaten by economic and job-insecurity, and so convinced by the neoliberal trickle-down promise, that they have been made to feel like they should feel lucky to provide their labour to a business owner, and that they do anything to displease the giver of luck, such as expecting to be fairly compensated for the labour they provide that contributes to the profits of the business owner, their luck might be taken away.
Workers need to stop believing their boss when they tell them they can’t afford a pay rise. Workers also need to start demanding more from their boss, such as requiring that they be told how much profit a company has made. If the boss wants to deny a pay rise year in and year out, they need to look the worker in the eye and tell them how much the business owner, executives and shareholders have received for their input into the business (investment), so that workers can compare this to how much they have got for their input; their labour. Workers need to understand what we are and what our role is in profit creation. You saw it coming and here it is: to do any of this effectively, takes collective effort. Workers need to unite together in their demands to have their labour input respectfully remunerated. And the best way to do this is to join together IN A UNION. IN SOLIDARITY.
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A worker is merely a dispensable, unhuman dollar sign “$”.
The State, with its ownership of essential utilities, should be seen as a constant pool of mass employment..both with good wages and stable employment that provides a secure capital base for the stability of consumerism. The State also should act as a union regulated wage level provider so as to set the bar at a height of negotiation for the private sector to meet when hiring trades or labour.
The State ought NOT to be colluding in the debasement of wages and conditions of its own citizens…THAT is a betrayal of the trust of democracy..ie :Of, by and for the people. It also lowers the spending capacity of the consumers, therefor creating a cycle of lower spending-lower profit for the private sector, lower employment in the private sector.
The whole world saw how Australia avoided the GFC. with its capital injection into the economy by the State..this example ought to give lead to how the State ought to govern ALL THE TIME…with capital injection and taxation withdrawal when needed..Those entrepreneurs who enjoy the benefits allowed them through their accumulation and spending of the Sovereign Wealth they use as currency ought to get down on their bended knees that they got lucky enough to get that extra income to live a life to which many of us ought to become accustomed.
The workers used to get angry when nothing TRICKLED DOWN in their direction, when it all FLOWED into the big boys pockets and bank accounts, soo angry : they went on STRIKE…
Interesting article, Victoria. Change is accelerating, many industries are disappearing and new ones appearing. The next phase of innovation will be in mass-produced robotics particularly for housekeeping and specially for aged care. Imagine a gentle, patient, obedient, strong, vigilant, always-on-duty, waterproof member of the family that could be constantly caring for elderly relatives – thus enabling their families to have them continuing to live in the family home rather than in a high-care facility. Consider how quickly new technology has improved and become cheaper.
A large problem facing our economy is manufacturing – there is great pressure upon semi-skilled workers as they are competing with what is effectively slave wages from a very close Asia. The demise of Holden is a very clear example of the failure of corporate welfare, along with wages that had been negotiated too-highly. Then came the knockout blow of a decline in popularity of Holden cars. Was nurses1968’s purchase of a work-subsidised BMW the final straw that broke the lion’s back? Probably not. Even on regional roads we see more BMWs, Audis than ever-humble Holdens. The buyers vote with their wallets.
Who would drive a Trabant if given the choice? Your beautiful grocery shopping future awaits, Joseph:
People in USSR in 1990 were scrambling to find some basics, and had to contend with whatever they found … Today in 2017, in Oz, many a shopping trolley is filled with junk food with a little or hardly any nutritional value…
Sad scenes, both of them….I don’t know how and what they buy in Russia today; here we at least have better choices, it’s up to us.
Communism: where people line up for food
Capitalism: where food lines up for people
Abu…Your beautiful consumer body future awaits? https://www.youtube.com/watch?v=SR2M6U3EVd0
Communism.: Where the majority of over a billion people no longer have to struggle to survive.
Capitalism.: Where 1% of only 23 million no longer have to struggle to survive.
In North Korea only the Leader is fat, in some Western,( and in some Eastern) countries most people are, different health issues.. is an educated Middle Way the answer?
I noticed on an overseas channel a banner streaming across the bottom Elton Musk Tesla sacks 500 workers. I can’t find any statement from the Company yet so does anyone know more?
We have to stop this ever broken record that having social responsibility, social justice,, social benefits for the needy, social security for the aged, is socialism and therefore a return of Stalin.
Extremes of Left or extreme Right are one of the same, Hitler was a vicious dictator as was Stalin.
I am sick to death with the commentary where progressive thought and deed is automatically communist.
S G B
The worker is now considered part of the structure of business rather than contributing to it. The High Court recently confirmed this attitude with its decision on pay rates for service sector workers and permitting the reduction of Sunday rates. Workers are supposed to be 24/7 just like machinery and, therefore, the idea of special rates on weekend or holidays is not necessary.
After this victory, the (misnamed) Fair Work Commission will not stop at Sundays…
You are a worker if you are employed to do work for some one else.
Yes all you pollies, executives, CEOs and Board members included, the difference is that you, who are not the traditional idea of a worker, earn so much more than you actually need, so you horde it away for the times you are unemployed.
The traditional worker were those who were at work and supervised by the foreman who saw himself as a cut above the worker.
I remember my first foreman, wore a coller and tie (yes collers were still detachable) a waistcoat and the all important dust coat. He resided in the foremans office. Workers were only allowed there upon invitation.
The foreman had floor walkers who dished out the foremans orders and reported production stuff to the foreman. If yOu were summond by the foreman, the floor walker would tell you, sometimes when someone was to be sacked the floor walker would tell you to pack your tools and take them to foreman.
Oooh look we are almost back there!
S G B
As I have said, Companys believe that the well off will keep them afloat. Us working class do not need their fancy products. They are only for people with money to burn.
1965, I started working, I didnt realise it then but we were in the middle of the “Golden Age” almost full employment, a council house for anyone who needed one ( most people lived in council houses – yes even the foreman) rock n roll the Beatles Rolling Stones The Who ‘ the pill’, free education. Free school meals 1/3 pint of milk free every day. Free dental and health care including specialists,
Ten years later, greed invaded the oil producing countries who stopped production to jack up the price, in comes Hayek and Friedman and Thatcher and Reagan.the birth of the “Free Market”, Privatisation labour laws to restrict unions, deregulation,
Its been down hill for workers ever since, sure it was hunky dory for the 1980s, but then the labour laws became stricter for unions and workers and easier for business, contract labour, self employment, train yourself, pay for education, health care, dental etc.
We have to learn about money how it is created and how it works at a macro level, they know the neolibrals, they know exactly but they want you to think it is not what is the reality, because they do not want you to spoil their gravey train.
S G B
Mick Byron re:
Here’s a link:
There are production problems. His timelines for delivery are askew. He’s possibly now in the position of being too big to fail.
https://www.nytimes.com/2017/10/13/business/tesla-fires-workers-model-3.html?mabReward=ART_ACTM4&recid=0uyExz3zk5V6oAvtx7f1V2k3a18&recp=2&moduleDetail=recommendations-2&action=click&contentCollection=Australia®ion=Footer&module=WhatsNext&version=WhatsNext&contentID=WhatsNext&src=recg&pgtype=article
Aboo semen Klakakat : synonyms; supercilious, conceited, self effacing ,narcissistic, prima donna ish . For God’s sake answer that damn phone man ! , Rupert’s on the other end ! He wants a piece of your superior intellect , to bandage his ailing sterile empire ! Quick man !!!
Capitalists say ‘Communism doesn’t work’. But I say ‘capitalism means not working’. Therein lies capitalism’s inherent failings
Matters Not
Thank you.At the time I just saw the banner onscreen and was on my way out so didn’t have time to Google search
The worker.
Back in the 1960,s we did a building job at an American Tyre factory in Melb northern suburbs.
Well this was time&motion in action,most of the employees were european migrants,building tyre cases for car tyres.
Are you ready for this,their quota was 140 per 8hr shift which they were paid $1.00 per hour,reach the quota $8.00 bonus.
It was cut so fine you did not have time to go to the toilet,but they had a very good canteen and a nurse on duty.
Now we are heading back there.
You have to have Unions or get screwed.
Rich people don’t become rich in isolation, they need help!
People forget this amazing statement by Elizabeth Warren (US Senator) in 2011:
“There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
A quote I give my postgraduate students when we are discussing negotiation tactics: From J.Paul Getty (1892 – 1976) U.S. oil magnate
“You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for making all the money there is in a deal, you won’t make many deals.”