By Peter Boyle
"The primary objective of this budget is jobs", said federal treasurer John Dawkins in his budget speech on August 17. However, the budget did little to tackle the problem beyond a modest stimulus to the economy, a few more token labour market programs and the pious hope that jobs would be created "in the medium and longer term by boosting the capacity of Australian businesses to expand production on a world-competitive basis".
The Keating government leaves the solution of the unemployment problem to the market. It hopes that cutting employers' costs, reducing their tax burden and giving them greater access to borrowing will encourage them to end their investment strike. Once the bosses start investing again this, so the theory goes, will create "real jobs".
Yet by its own estimates the current rate of economic growth (about 3.3% per year) is unlikely to make a significant dent in unemployment figures. Further, any dramatic acceleration of this growth may not be "sustainable", i.e., may prompt the government to "put the brakes" on the economy again to prevent a balance of payments blowout. Hence the public has to be conditioned to swallow the bitter pill of a "jobless recovery".
While there have been some figures that have been touted in the capitalist media as signs of improvement in the jobs situation, these are often less certain than they first appear. For example, according to the Australian Bureau of Statistics, the national unemployment rate for July fell to 10.7%, down from 11.1% in June. However, this drop reflected the fact that some 42,000 people were judged to have dropped out of the official labour force. Total employment numbers actually dropped by 900 over the month.
Another set off hopeful figures are the forward or leading indicators of employment trends. The ANZ Bank's index of job ads rose in June and July and the Department of Employment, Education and Training's more sophisticated leading indicator (which takes into account job vacancies, building approvals, car registrations and overtime figures) also rose in June. However, it has been rising steadily since 1991 but there has been no sustained fall in unemployment.
Permanent problem
There is now widespread acceptance that we are dealing with a problem that goes beyond the recovery from the recession. In every economic cycle since the 1974-75 recession, the baseline for unemployment has been ratchetted up by two or three percentage points. Now Kim Beazley, the Minister for Employment, Education and Training, says that his goal is 6% unemployment — though in his opinion Australia will be lucky to get to 8% by the end of this decade. The 40 million or so unemployed people in the rest economies attest to the fact that this problem is not confined to Australia.
A debate of sorts is taking place in the capitalist press. From the right-wing think tanks like the Institute of Public Affairs and the Tasman Institute, we hear that the government has not gone far enough in "freeing" the market to solve the problem of employment. Their theory is that if wages were allowed to a "clearing price" everyone who wants to work will be able to get a job. Apparently, the last decade of real wage reduction under Labor has not been enough.
In addition, the right says that the unemployed have to be given more "encouragement" to work by having their entitlement to the dole reduced or further restricted. As the IPA's John Hyde write in the August 7-8 Weekend Australian: "[Unemployment] is caused by an industrial system that raises wages while reducing output and by a welfare system that rewards idleness."
The Keating government obviously agrees because it is trying to implement the IPA's two-point strategy with enterprise bargaining and its labour market programs. The right's only complaint is that Keating is not moving fast enough.
Neo-Keynesian dreamers
Then there are the neo-Keynesians who say unemployment can be addressed with a combination of larger government stimulus to the economy and protection of Australian manufacturing industry (which they prefer to call "industry policy"). On paper at least the ACTU supports this approach and the timid ALP left dreams mistily about a return to the "Golden Age of Keynes." However, the last year and a bit of "jobless recovery" raises serious doubts about whether giving the capitalist economy a kick along is really going to address unemployment today.
The neo-Keynesians share the Keating government's objective of growth through a more "competitive" Australian economy, only they believe that the government should play a bigger role in the process. However, in the process of getting more "world- competitive" companies and government instrumentalities, enterprises are shedding jobs at a tremendous rate. A week does not pass without some major corporation announcing its plans to shed more jobs. Corporate success in the 1990s, we are told by the business magazines, depends on becoming "lean and mean".
Huge gains in productivity are being made but fewer workers get to keep jobs. A recent study of government business enterprises carried out by a top-level federal and state government committee suggests that the push for business restructuring, greater efficiency and improved productivity, primarily among larger companies is the reason for the jobless recovery from the 1990-91 recession. Over the five years to 1991-92, employment fell by 59,000 or more than 18% among 50 government enterprises while labour productivity increased by an average of 40%. While the similar studies have yet to be done for the private sector, the same process of restructuring — perhaps even in more accelerated form — has been taking place there.
As a result not only are there now more people out of work than ever before but many of those in work are working longer hours than they did a decade ago. ABS surveys also show that some 19% of the workforce work 49 or more hours a week. Ten years ago it was only 13%. Some 400,000 people work 60 hours a week or more, twice as many as in 1983.
The long hours are being worked by blue and white-collar workers — some for extra pay and others because they have to under the new more "flexible" terms of new employment contracts. Many more are working longer and harder in the desperate hope that this may save them from the next round of retrenchments.
Sharing the work
The idea that — if we want to really solve the unemployment problem — society is going to better share the work around is now unescapable. But there is confusion among many on the left of the political spectrum about how this is should be done. The idea of fighting for a shorter working week without a reduction in pay is dismissed as "unrealisable" to some on the left because it obviously is against the interests of the employing class.
In the quest for a "realistic" response to unemployment some on the left toy with the idea that work can be "shared" by promoting more part-time and casual work.
One quarter of the workforce are already on part-time and most of these are hired on a casual basis. These are mostly women on low-paid jobs with little prospect for career advancement. Back in 1983 less than on-sixth of workers were part-timers. But it seems there is still a way to go. In the Netherlands one-third of jobs are part-time and unemployment is 4.5% so some suggest this is the way to go. The United States and Japan which have similar or slightly lower unemployment rates also have large numbers of lowly-paid, casual and part-time workers.
All this indicates is that unemployment can be reduced if the average price of labour is reduced, i.e., there is a free market solution of sorts. Many people still suffer poverty but the official unemployment figures look better.
In a pitiful celebration of middle-class myopia, Pamela Bone, the Melbourne Age's token "left" columnist, recently penned a piece titled: "New brooms, new jobs: I've now decided that I was being downright selfish in not sharing the work with someone else". Her contribution to a solution to unemployment was to hire a "strapping young man who grew up in Brighton and went to as private school" to be her "cleaning person", Bone revealed. Perhaps if all the other busy but well-paid professionals would take on domestics, unemployment would be reduced. This version of "sharing the work" is in the end no different from that suggested by the right-wing think tanks as the Institute of Public Affair's John Hyde has explained. Most part-time and casual jobs comprise a secondary sector of the labour market where "market-clearing" (ie sufficiently low) wages rule. If more people are not taking these jobs, says Hyde, it is because these jobs are too unpleasant or ill-paid relative to the quality of life on the dole. The obvious solution: make life on the dole harder.
'Incentive to work'
Well-meaning (if often agonisingly patronising) lobbyists for the welfare sector may shrink in horror at this "solution", yet many of the labour market programs currently funded by the Keating government, which they support, are also part of the "market solution" to unemployment. These programs are ostensibly aimed at helping the individual unemployed person become more employable by offering employers subsidies or by encouraging the acceptance of part-time and casual work. Some of these programs also encourage the unemployed to undertake unpaid or voluntary work.
While some people might be foolish enough to believe that is part of some clever "redefinition of work" Hyde explains that whether or not the supporters of these programs want to use these terms or not, the effect is to reduce the average wage drastically and to substantially increase the "incentive to work".
These work-for-less schemes are still a relatively small part of the government's expenditure on the unemployed (the lion's share is taken up in dole payments), in the Aboriginal rural communities work for the dole schemes have become well- entrenched. Commonwealth Development Employment Program (CDEP), the work-for-the-dole scheme, is the biggest single component of funding on Aboriginal affairs in this budget.
Some on the left also believe that it is more "realistic" to raise the demand for a guaranteed minimum income for everyone — whether employed or not. While this demand should be raised as part of a program of responses to unemployment, in the absence of a demand to share the work around without loss in pay divisions between workers in and out of work are accentuated. Especially as a GMI is very unlikely to be acceptable to the employer class unless workers bear its cost through higher taxes. Note the respectability allowed by the mass media to calls for a "jobs levy".
During the Great Depression the Australian trade union movement was prepared to accept — at least on paper — that serious unemployment could not be solved on terms amenable to both employer class and all their employees. Not so today, hence the ACTU limps behind the Keating government on the issue of unemployment. It cannot even bring itself to demand that the government create work through a large program of public works funded by taxes on the wealthy so well-fattened over a decade of ldest protest was voiced over Dawkins' quiet but effective scrapping of much of the job-creating infrastructure projects loudly heralded in Keating's 1992 One Nation statement.
But confronting the today's unemployment problem does require facing up to the fact that an irreconcilable conflict of class interests is being posed. Social justice demands that the fruits of the historic gains in productivity allowed by technological advances be shared fairly — hence the validity of the demand for a shortening of the workweek, with no loss in pay and the maintenance of penalty rates for overtime work. Governments must also be pressed to create jobs to carry out public works to address real social needs ignored by big business, the funds for which can be raised by reversing the trend to tax the wealthy less and less and to end unproductive war spending.