Class warfare being waged against unemployed & workers - The #PovertyPay agenda being set by #capitalists The deregulation in the labour markets not only created increased job instability and persistently high #unemployment but also led to large shifts in national income from wages to profits. A recent International Labour Organization (ILO) report written by Englebert Stockhammer – Why have wage shares fallen? A panel analysis of the determinants of functional income distribution – reports similar trends in other advanced OECD nations. The wage share in national income has fallen significantly over the last 35 years in nearly all nations. Warren Buffett’s suggestion that “There’s class warfare, all right … but it’s my class, the rich class, that’s making war, and we’re winning” Up until the early 1980s, real wages and labour productivity typically moved together. As the attacks on the capacity of workers to secure wage increases intensified, a gap between the two opened and widened. The widening gap between real wages and productivity growth manifested as the rising profit share. In 1975, the Australian wage share was around 62.5 per cent of factor income. By the end of 2012, it was around 54 per cent. Australian government aided this redistribution in a number of ways: privatisation; outsourcing; harsh industrial relations legislation to reduce trade union power; National Competition Policy etc. But how does economic growth sustain itself when labour productivity growth outstrips the growth in capacity to purchase (the real wage)? This was especially significant in the context of the increasing fiscal drag coming from the public surpluses, which squeezed private purchasing power in many nations during the 1990s and beyond. The neo-liberal period found a new way. The ‘solution” was found in the rise of so-called ‘financial engineering’, which pushed ever increasing debt onto households and firms. The credit expansion not only sustained the workers’ purchasing power but also delivered an interest bonus to capital while real wages growth continued to be suppressed. Households, in particular, were enticed by lower interest rates and the vehement marketing strategies of the financial engineers. It seemed to good to be true and it was. The increasing private sector indebtedness – both corporate and household – is another marked characteristic of the neo-liberal period. In Australia it manifested mostly as increasing household indebtedness. The debt to disposable income ratio stood at 69.1 per cent in March 1996 and by September 2008 had risen to a staggering 153.1 per cent. Governments, their central banks, and so-called financial industry experts played down any sense of alarm during the pre-crisis period claiming that wealth was growing along with the debt. When the debt bubble burst, significant proportions of the ‘wealth’ vanished leaving many borrowers with massive debts but few assets. At that point, there should have been a "#proletarian" revolt – perhaps via our ballot boxes – to demand that governments stopped acting as agents of capital and, instead, moved back to the role they played during the full employment era as mediators in the class conflict. Respect For the Unemployed & Benefit Claimants Mark Samuel Roger Rmt de Ken North Will NorthEast
Posted on: Sat, 31 Aug 2013 11:47:28 +0000
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