Friday, June 12, 2020

Coronavirus Will Not Destroy Neoliberalism – Only We Can Do That

Lisbeth Latham

Triumphalist comments about the end of capitalism or neoliberalism abounded in the aftermath of the global financial crisis in 2008, just as there are many people today who believe that the current crisis is the end of neoliberalism or capitalism.

Unfortunately, neoliberalism and – more importantly – the capitalist system will not just end of their own accord. Both, while prone to crisis, are extremely resilient, and are adept at turning their own crises into a rationale for deepening rather than reversing their dynamic.

It is not inevitable that the current crisis will see a strengthening of capitalism and its dominant ideological frame – they can both be defeated, but their defeat will not just happen. It will be the result of conscious resistance, not happenstance or luck.

Capitalism is prone to crisis. This tendency towards crisis, particularly in its late monopoly stage, is due to the ripening of a number of contradictions inherent to capitalism. However, capitalism is resilient as a system and has demonstrated over more than a century that there is no crisis it can’t overcome if the working class is prepared (i.e, can be made) to pay the price.

Importantly, crises – particularly destructive crises – help to renew capitalism, sweeping away uncompetitive capital, and creating the space for a renewal of capital accumulation, however briefly. Destructive crises also enable a renewed assault on the rights of working people and on social spending that working people have won in previous struggles.

This is a central feature of the neoliberal offensive over the past five decades of its history: to seize every crisis, impose its own doctrine, smash working conditions, privatise the economy, and dismantle the welfare state, shifting government spending to prop up profits rather than support working communities.

Neoliberalism constitutes a political project aimed at weakening the political power of the working class, asserting the political power of the capitalist class and seeking to establish profitable avenues for capital investment1.

Key features of neoliberal projects include: 


  • Facilitating the free movement of capital by removing barriers to capital investment and shattering trade barriers; Increasing barriers to the movement of workers, which results in increasingly constrained rights and marginalisation for migrant workers (this includes open calls to movement being linked to migrants’ wealth); 
  • Prying open more aspects of social life for capital investment – privatisation and ownership of water, for example, exemplified by the 1999-2000 water wars in Cochabamba, Bolivia, between the community and the the NestlĂ© corporation; 
  • Opening government services to capitalist competition, whether through direct privatisation; corporatisation; ‘public-private partnerships’; 
  • Access by government agencies or the introduction of ‘voucher systems’ to enable government subsidisation of the entry of private capital into the provision of social services; 
  • At the same time, deregulating the cost of these services. This is often articulated in terms of enhancing consumer ‘choice’; 
  • Reduction in government social spending, primarily premised on the justification of the need to rein in deficits, although this has rarely been achieved. Throughout the neoliberal decades the US’s budget had regularly been in deficit. Instead spending reductions occur primarily as a consequence of declines in government income via the narrowing of the tax base to be more heavily reliant on working people, and a redirection of government spending away from social spending on the working class and the promotion of worker-funded retirement funds.

COVID response as a deepening of neoliberalism
As with the global financial crisis, the Covid-19 pandemic and its associated crisis has been described as the death knell of neoliberalism, if not capitalism. In particular, the massive government stimulus packages that have been enacted in many countries to prop up economies have been seen as a decisive shift in the outlook of these governments.

However, government spending is not necessarily in contradiction with neoliberalism. Moreover, as both Philip Mirowski and Naomi Klein have pointed out, neoliberals are adept at turning economic crises, which are clearly exacerbated by neoliberal policies, into opportunities to deepen neoliberal attacks. Neoliberal states, while ideologically promoting budgetary surpluses, have massive spending programs primarily aimed at subsiding capitalist profits.

While government responses to the Covid-19 pandemic have seen massive levels of spending on stimulus packages, this spending has overwhelmingly been directed at propping up profits. For example, wage subsidies are for the most part really a subsidy to business profits with mechanisms built in to allow stripping away of workers’ rights.

At the same time, the spending on stimulus has triggered widespread discussion among the media and establishment of the ‘dangers’ of government deficits and the need to limit the length of the stimulus packages, particularly subsidies, irrespective of the length and dynamics of the crisis.

In addition, there has been a discussion of the need to ‘pay’ for the response to the current crisis at the same time as enabling capital to recover and rebound. These calls lay the foundations for two parallel pushes. First, a move to further curtail social spending, most likely with accompanying privatisation of public services, which will result in both a massive increase in the cost of these services and a corresponding drop in quality. Secondly, a move to further reduce company taxes whilst shifting the burden of paying for government spending even more heavily into working people.

Building working-class power today
Given this trajectory, how do we build a better system – one in which workers lives are prioritised over profits? How do we build a world where nature is valued and protected?

While the call for the creation of socialism in the here and now is appealing, nowhere on the planet do working people have the level of organisation and confidence necessary to achieve this objective now. Instead, we must build the power and confidence of the working class as it exists today in defence of existing rights; in demanding steps forward, no matter how limited; in guaranteeing livelihoods, in the hope we can extend and expand them; and building the capacity to win more.

In the short term this means:
  • Ensuring that working people, whether they are in employment or not, and whatever their residency/visa status, have liveable incomes; and
  • Ensuring that all those workers engaged in employment have safe working conditions, which in the context of Covid-19 has never been more urgent.

In the medium to long term this will involve:
  • The struggle to maintain liveable incomes, particularly for those on government pensions;
  • Mass construction of energy-efficient and high-quality public housing;
  • Massive reinvestment in the public health system both in terms of capacity and working conditions for the workers within it; Support for public research within the universities and independent research centres; and
  • A just transition across the economy to move away from fossil fuels and to transform the economy to one based on meeting human needs rather than constant growth, in order to draw down the atmospheric carbon dioxide.
It is not enough to simply call for a better world, it is necessary to mobilise and struggle to achieve it. At the same time, it is necessary to recognise that with the extent of the pandemic and the necessity for social distancing, in most industries and social sectors social mobilisation and industrial action will be extremely difficult.

Our immediate demands of both governments and capital are for action to ensure economic livelihoods, and to ensure that workers and communities are able to operate in as safe a way as possible. As the economy reopens, our ability to disrupt and mobilise will increase, as will our political horizons and demands.

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This article was originally published at Irish Broad Left.

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Tuesday, April 21, 2020

Fair Work changes an attack on all workers

Lisbeth Latham

Attorney-General Christian Porter has made it easier for employers to take advantage of the economic crisis brought on by COVID-19 and protect profits at the expense of workers’ rights and conditions.

On April 18, Porter announced the federal government had approved new regulations to the Fair Work Act which allow employers to reduce the time period they are mandated to provide before changing enterprise agreements.

Enterprise agreements (EA) are statutory agreements, enforceable under law, designed to ensure that employers cannot worsen conditions for workers.

However, the Fair Work Act makes it possible to vary an agreement and change its provisions prior to it expiring and being renegotiated.

There are legitimate reasons to vary an agreement which can be in the interests of workers.

However, shortening the access period around a variation will make it easier for employers to drive through adverse changes which strip conditions.

A major problem is that, under the Fair Work Act, employers can try and force through agreements and variations and put the agreement to workers in spite of the union’s objections.

Vote “no” campaigns are extremely difficult to organise and run in large workplaces, even in the best of circumstances with a seven day notice period in a bargaining campaign.

If an employer is able to advocate a variation with just one day’s notice, it will be extremely difficult for a union to win a “no” vote.

It will be made even more difficult as companies use the threat of stand-downs without enforced leave – possible under the Fair Work Act – over workers’ heads.

The Labor opposition and the Australian Greens will seek to reverse the government’s changes to the regulation. To be successful, however, the motion will require an absolute majority of 50%+1 in the Senate, meaning they will have to gain the Centre Alliance and One Nation support. The earliest the motion can be put is May. In the meantime, the changes are in effect.

There is always a need for workers to be able to discuss the circumstances and contents of any enterprise agreement variations. Companies that cannot pay workers fair wages and provide decent conditions should not be in business.

In the context of the COVID-19 generated mass unemployment, having a job is a primary concern for many people. The challenge is to chart a path between workers being adequately paid and companies collapsing.

While the best way would be via a larger universal wage subsidy from the government. In its absence, however, agreement variations may be necessary.

However, they must occur within a framework which protects the rights of workers during and after the coronavirus crisis, including that:

  • Workers and their unions have absolute veto over any variation; 
  • No discussion of variations be undertaken without workers and their unions scrutinising the company’s books; 
  • Any variation be predicated on senior management having its pay reduced by 40%, or capped at five times the full-time ordinary pay of the lowest paid employee (whichever is lower); 
  • A ban on all executive bonuses and share dividends for three years after the end of any variation; 
  • A guarantee preventing stand-downs without pay, or job cuts; 
  • Any profits to be distributed to workers to cover any reduction in conditions as a consequence of the variation; 
  • Any variation to have a sunset clause, and; 
  • If the variation has not expired prior to negotiations for a new agreement beginning, the starting point for new negotiations be the original unvaried agreement.
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[Originally published in Green Left Weekly #1262]


This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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Friday, April 10, 2020

Morrison’s COVID-19 response puts profits ahead of people


Lisbeth Latham

Federal parliament passed the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 on April 8, which provided the enabling legislation for a range of stimulus measures the government has already announced, including the JobSeeker allowance.

While the creation of the JobSeeker allowance is significant, and has been welcomed by Australian Council of Trade Unions (ACTU) secretary Sally McManus as a “victory”, the package has a number of significant weaknesses.

Essentially, it outlines that the bulk of the economic crisis will be passed on to working people, particularly more marginalised workers.

The JobSeeker payment will provide qualifying employers with $1500 a fortnight per qualifying employee for six months.

There are qualifying thresholds for employers: those with less than $1 billion in turnover must also have lost more than 30% of their revenue; those with more than $1 billion in turnover must have lost more than 50%; and charities must have lost more than 15%.

When it became clear that there was to be a special category for charities, TAFEs and universities had hoped to be included under charitable organisations. But the government has since made it clear that the payment would only go to organisations providing direct charitable support.

For a worker to qualify, they must be either a permanent or fixed-term employee, and employed prior to March 1. A qualifying casual employee must also have been working for their employer for more than 12 months.

The $1500 JobSeeker payment essentially establishes a new income floor for qualifying employees, paid for by the government.

For around 30% of workers the subsidy reflects either an improvement on, or a maintenance of, their current incomes.

But for the majority of workers, it represents a wage cut and, for many, a significant one.

As the new act amends the Fair Work Act to make it easier for affected employers to change workers’ hours, direct them to take leave, relocate them and make changes to the work they do, any reduction in hours will result in a corresponding reduction in pay for workers, down to a minimum of $1500.

The subsidy is not the starting pay. Rather, a worker will need to work towards and surpass the equivalent number of hours if they are to receive close to their normal pay, as employers are only required to pay a qualifying worker whichever is greater of the $1500, or whatever the worker earns in a fortnight.

For companies still employing people in work, the subsidy is more a subsidy to their profits rather than a wages subsidy, with workers in effect providing $1500 unpaid labour each to the employer.

The failure of the government’s stimulus package to sufficiently protect workers’ incomes was highlighted by an ABC report on April 9 which stated that 617, 000 people have told the Australian Tax Office (up from 360,000 on April 3) that they will be seeking to draw on their superannuation accounts this financial year (after April 20).

If each of these draws the full $10,000 eligible, that will amount to $6 billion. This will not only undermine the future retirement of those workers, but it will impact all working people.

However, as inadequate as the package is, a far greater problem are the hundreds of thousands of workers who do not qualify for any subsidy right now.

These include more than 1 million casuals, workers on visas and workers employed in firms which have not met the revenue loss threshold, but are dismissing or standing down workers nonetheless.

The ACTU had been lobbying for a broader qualifying definition for casual workers, based on a reasonable expectation of further work, which is part of the test for casual employees qualifying for unfair dismissal protections.

Attorney General Christian Porter rejected the ACTU on the basis that it was “too broad”. He justified the government’s decision not to include more casuals on the basis that “casuals move between multiple employers”.

Porter would know that many casual workers rely on a single employer. It also ignores the reality that, while some new work being created, that is dwarfed by the numbers losing work.

The government’s refusal to include all visa holders in its wage subsidy protections, combined with Prime Minister Scott Morrison’s April 3 statement that struggling international students should “go home if they can’t support themselves”, is consistent with successive governments’ view that international students and other visa-holding workers are sources of income and cheap labour which can be disposed of at whim.

Leaving Australia is not a viable option; the government's callousness will simply force these workers into extremely insecure and exploitative situations.

The United Workers Union has launched an important campaign for no worker to be left behind, irrespective of visa status, with an amnesty for undocumented workers. It should be supported. We also need to demand that workers be given permanent residency and citizenship, should they request that.

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[Originally published in Green Left Weekly #1260]
This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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Sunday, April 5, 2020

Presentation at Covid-19: Capitalism puts profits over health forum

My talk at the Socialist Alliance forum "Covid-19: Capitalism puts profits over health" on March 31. Thanks for the invitation to speak, I hope my talk was useful.

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Thursday, April 2, 2020

Morrison’s COVID-19 wage subsidy fails workers

Lisbeth Latham

The federal government announced on March 30 that a wage subsidy package would go to parliament aimed at encouraging companies contemplating job cuts and stand-downs to retain and pay workers for the duration of the economic crisis triggered by the COVID-19 pandemic.

The Coalition had explicitly ruled out wage subsidy packages. But its turn-around has come after pressure from unions and employer groups. While the decision has been widely welcomed, the package is inadequate to meet the looming crisis. It has also come too late to help tens of thousands of workers already stood down.

The bailout is a wage subsidy to employers considering laying off workers. It has been set at $1500 a fortnight — 70% of the median wage — irrespective of how much was earned or how many hours worked.

The payments will be available for a maximum of six months: they begin on May 1 and will be backdated to March 30. They will cover workers dismissed between March 1 and March 31 at qualifying companies.

The subsidy will apply to all workers, including casuals, provided that the casual employee has been employed for at least 12 months.

However, the criteria for casual workers to qualify is still unclear, particularly if they have had breaks between jobs over the previous 12 months.

To qualify, a business with a turnover of less than $1 billion will have to have experienced a drop in revenue of 30% or more. Businesses with a turnover of more than $1 billion will have had to experience a reduction of more than 50%. Sole traders are included in the scheme.

While this wage package provides thousands of workers with some comfort, like the previous stimulus package it is inadequate.

First, payments to businesses begin far too late, which means that companies, particularly those with cash-flow problems, will sack or stand-down workers prior to May 1. This is why it should be brought forward.

Secondly, the wage guarantee amount is inadequate: it will leave thousands of working people facing financial oblivion.

Thirdly, all casual workers, irrespective of how long they have been working for a particular employer, should be eligible. It has been estimated that 1 million casual workers will not qualify. The fact someone is employed casually does not reduce their needs: indeed, their precariousness means they have less resources to survive this crisis.

Fourthly, the loss threshold for companies to qualify for the wage subsidy is too high. We do not know how long the pandemic will last. While some companies will qualify now, many will not and they will still be trying to survive with reduced revenues, meaning that thousands more will face stand downs and job cuts.

Responding to the new package, the Australian Council of Trade Unions (ACTU) has renewed its call for a wage subsidy for all workers, regardless of their contractual or employment relationship, citizenship, residency or visa status.

The ACTU argues the payment should be lifted to $1375 a week and modeled on the schemes introduced in Britain (80% of a worker’s wage) and Denmark (75% of a worker’s wage). (The Danish scheme is aimed at putting the economy, outside of essential services, into mothballs to slow the virus spread.)

ACTU secretary Sally McManus said: “The union movement has worked doggedly to make sure this government understands the grave situation Australian workers find themselves in. Less than three weeks ago, the Morrison government wouldn’t consider the notion of a wage subsidy.

“We now need employers to keep people employed and keep paying their wages. We are calling on all employers to do their part.

“We also want to see workers who have been let go re-employed.

“A wage subsidy program needs to have safeguards to ensure people are kept in employment and that any taxpayer money flows to the workers. The government has made clear that this is a wage subsidy and not a wage replacement program, and we would expect to see people maintain their wage levels during this program.”

This will be difficult. With so many companies standing workers down, the ability to mount workplace pressure is extremely limited. Where it is possible, however, pressure will be needed on management to maintain wages and employment.

Equally important is the need to maintain pressure on the federal government to boost wage subsidies and ban sackings.

It may feel impossible to shift the government further. But, given that in just three weeks it has moved from offering cash to small- and medium-sized businesses to a $137 billion wage subsidy for millions of workers, we can see that it is susceptible to pressure.

We can protect the livelihoods of working people and, post pandemic, look to transform society to put people before profits.

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[This article originally appeared in Green Left Weekly #1259].

This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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Tuesday, March 24, 2020

COVID-19: Workers should not be made to mortgage our future

Lisbeth Latham

As part of the Morrison Coalition government’s second COVID-19 stimulus package, treasurer Josh Frydenberg announced that workers would be able to draw on their superannuation savings by $10,000, this and next financial year, to meet immediate needs.

It highlights the Coalition’s inadequate response and its determination to shift the cost of its failure onto working people. At the same time, it is bailing out corporations.

Since its inception, Australia’s superannuation system reinforces and reproduces the inequality within the labour force and extends it into retirement.

The system shifts the responsibility of supporting retirees from government onto working people, via a system which defers and redirects wages into the superannuation system.

This deferral has allowed capital to inject billions of dollars into financial markets, predominantly the Australian one: Australian Superannuation Funds held $2.9 trillion in assets in July 2019.

It has allowed the government to justify its failure to provide adequate retirement pensions to workers because they are supposed to have enough superannuation to rely on in retirement.

As a result, Australia has the second highest rate of retirees living in poverty in the Organisation for Economic Co-operation and Development, with 35.5% of people over the age of 65 living in poverty, the overwhelming majority being women.

While the superannuation system is flawed, it is important that it does not become even worse. Forcing workers to draw on their superannuation to survive during the COVID-19 crisis will decimate the superannuation accounts of millions of workers.

Many of these people will already be among the most vulnerable and low-paid workers: they are unlikely to be able to rebuild their superannuation accounts. This will result in many workers living in poverty in their retirement.

If the crisis deepens for an extended period, there is a danger that workers will be pressured to to draw down even further on their savings. This will put workers at risk of losing the built-in insurance in superannuation funds that requires their balance be above $5000.

Age Average balance: men Average balance: women
20-24 $5,924 $5,022
25-29 $23,712 $19,107
30-34 $43,583 $33,748
35-39 $64,590 $48,874
40-44 $99,959 $61,922
45-49 $145,076 $87,543
50-54 $172,126 $99,520
55-59 $237,022 $123,642
60-64 $270,710 $157,049

Source: Association of Superannuation Funds of Australia

Beyond the short and long-term impacts on individual workers forced to draw on their superannuation savings, this proposal will potentially spark a liquidity crisis for the superannuation funds and thereby impact all workers.

The funds only hold so much cash at any one time which, in addition to being a form of investment, is used to reimburse funds to members.

If struggling workers start drawing down their superfunds, this will add pressure to those funds which may be forced to liquidate other assets, most likely shares. This will prompt superfunds to sell even more stocks, wiping out more of the value of shares and reducing the savings of all members.

Under these circumstances, speculators such as Gerry Harvey will be in a position to buy shares at much lower value and position themselves to profit handsomely from the COVID-19 crisis. This is in addition to the same profiteers receiving a direct government stimulus.

Many workers will not have any other option but to draw on their savings. But unions must demand that companies and the government guarantee workers’ wages during the COVID-19 crisis so workers do not need to draw on savings.

Moreover, we must demand that the aged pension, along with all other welfare payments, be lifted to at least the new level of the jobseeker benefit.

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[This article was originally published in Green Left Weekly #1258].

This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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COVID-19 and why a rent strike is the wrong tactic

Lisbeth Latham

In the face of the economic havoc caused by the COVID-19 pandemic, it is not enough to call for a rent strike and moratorium on mortgage repayments. At best, it simply displaces the lack of income into other parts of the economy and, at worst, it could deepen the impact of the economic crisis on working people.

Despite widespread concern over housing affordability, as a stand-alone tactic such calls are insufficient. Instead, progressives should be campaigning for secure incomes for all working people, something that would not only allow them to pay rent and mortgages, but equally importantly it would allow them to eat.

As the pandemic deepens, many more industries and companies will close. That will mean many working people, although technically employed, will be without incomes.

Even with treasurer Josh Frydenberg’s announcement that job seekers will have their payments doubled for six months — a huge relief for the unemployed — for many this will fall far short of meeting their financial needs and obligations.

There are a number of immediate risks if people were to stop paying rent.

First, they risk being evicted from their home. While this may not happen immediately, it is a struggle that they may not be in a position to win.

Secondly, a rent strike runs a serious risk of displacing the income crisis to another part of the economy.

While many people will have limited sympathy for the plight of landlords, and many could wear a reduction in income, this is not going to be the case for all landlords, especially retirees, whose superannuation is tied up in a rental property and for whom the non-payment of rents could lead to their immiseration.

If there was to be a rent or mortgage strike, it should be limited to those whose incomes have been significantly reduced. Those who remain working, or whose employers continue to pay them during periods of shutdown, should continue to pay rent.

Doing so will help ensure the circulation of cash and allow those services that remain in operation to be paid for the goods and services being provided. Additionally, the payment of rents and mortgages will have a counter inflationary effect.

The key question should be how can we collectively maintain incomes in this unprecedented COVID-19 emergency. Governments should mandate employers to continue to pay the wages of all their employees, regardless of their contract status.

If this is no longer possible, the government should directly subsidise wages – rather than the Morrison government’s current plan to refund tax payments and underwrite loans.

By doing this, large corporations such as Qantas, should be partially or totally taken back either through formal nationalisation or via a share transfer. No worker should lose their job or income in the current crisis.

Right now, governments must fund jobs and incomes by creating more money to be released into the economy. By subsidising wages, the government would be able to position the economy not just for a more rapid recovery in the wake of the pandemic.

It would also be in a position to prioritise the expansion of sectors, such as manufacturing, which are necessary to boost sustainable energy to transform the country’s power supply to meet the equally vital challenge of climate change.

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This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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Revitalising Labour attempts to reflect on efforts to rebuild the labour movement internationally, emphasising the role that left-wing political currents can play in this process. It welcomes contributions on union struggles, internal renewal processes within the labour movement and the struggle against capitalism and imperialism.

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