Defend jobs, not profits! - A working-class response to the economic crisis

Socialist Alliance statement

The current economic crisis comes after 14 years of boom conditions, which have delivered a profits bonanza to the bosses. Workers’ share of the national income has declined from 60% in 1978 to 51% today. At the same time, the cost of living has risen significantly.

The bosses are using the global financial crisis as a cover to slash jobs. As the Australian economy heads towards recession, unemployment is rising. The official unemployment figure is predicted to rise to 9% by the end by 2010; the real level of joblessness will be far greater.

Corporate greed

Even though companies like Pacific Brands have received millions of dollars of government subsidies over the years, they are retrenching workers and devastating entire communities in the process, not because they are on the brink of collapse but because their profit margins are down! While Pacific Brands cries poor, its CEO’s pay packet was tripled to $1.89 million, which includes “incentive payments” — no doubt a reward for her success in axing jobs.

The federal Labor government has called for a united response to the financial crisis, asking government, business and unions to work together. Workers have been told that we have lived beyond our means and that now is the time to tighten our collective belts, forgoing wage claims for the sake of the nation. No demands are made on the employers however!

Billions of dollars of taxpayers’ money have been allocated to stimulate the economy. Most of this money is delivered as a handout to big business without any real guarantee to retain jobs. Workers are pressured into accepting pay cuts and shorter working hours to help employers retain their profits. In rural and regional Australia, the pressure is especially acute for workers in vulnerable industries.

Stimulus package: job losses for the poor & welfare for the rich

The federal government’s $42 billion “stimulus” package aims to soften the worst aspects of the recession through increasing public spending — but by as little as possible. Fundamentally it is designed to protect private profits. Rudd’s corporate welfare package will not protect workers; it may prevent some job losses but it won’t stop unemployment from rising sharply. At the very least, firms (like Pacific Brands) which take government subsidies should be prohibited from sacking workers.

Who is to blame & who should pay?

The bosses will attempt to force working people to bear the burden of the crisis by:

Threatening workers with unemployment. Calling for wage restraint, demanding that workers moderate wage claims or forego wage increases (such as at the ALCOA plant in Western Australia), to guarantee profitability. The bosses argue that wages must be lowered during the downturn or else workers will price themselves out of the market. But there is no evidence that wage increases automatically lead to job losses or that a low minimum wage will reduce unemployment. The current situation is that companies cannot find buyers for their products and if no market exists, firms will not produce and will consequently not hire workers, no matter how low the wages. What is clear, however, is that lower wages mean higher profits for bosses and companies. What position should unions take? In the face of the global financial crisis, the ACTU’s response has been one of retreat and essentially tails the Rudd government’s pro-business agenda by accepting its calls for wage restraint. Unions must not accept bosses’ claims of financial hardship at face value. We need to demand that companies open their books to workers’ scrutiny — let’s see for ourselves what is really going on. Unions should demand that the government take over firms that threaten to go offshore for cheaper labour (such as Pacific Brands) and run them in the interests of the community. Unions should demand that the government nationalise companies that fail and reorganise them for socially useful production on an environmentally sustainable basis. Unions should demand a shorter working week without a loss in pay, to help boost employment. Unions need to engage in protests and industrial action and mobilise their members to fight to keep jobs, decent wages and conditions. It is especially important that unions vigorously oppose Rudd’s anti-worker, anti-union “Fair Work Bill” and the ABCC which seriously impede the ability of workers to fight back against employer attacks. Massively expand the public sector to create jobs on a large scale But, above all, unions must demand that the public sector be massively expanded. Only this can create permanent, secure, well-paid jobs on the scale we need. This is the only kind of “stimulus package” working people should fight for. For example: Public transport networks need to be massively expanded, both to make our cities fit to live in and to cope with sharply growing public demand. We need to move away from the dominance of the motor vehicle which is helping drive global warming and making our cities into urban nightmares. By training scores of thousands more teachers, class sizes could be drastically reduced and the quality of education radically improved. The state school system would start to win back pupils from the private sector. Our public health system needs a massive transfusion of funds and personnel to be able to provide every single person with free quality healthcare. The artificial hospital beds crisis and the huge surgery waiting lists could be rapidly abolished. Public housing likewise needs a huge shot in the arm to abolish homelessness and to put an end to the criminally overpriced housing and rental market Restructuring our economy and our way of living to radically reduce our greenhouse gas emissions and move towards 100% renewable energy as rapidly as possible will create large numbers of new jobs. Tax the rich! The resources for building a better life for all do exist. Since the economic meltdown began absolutely stupendous amounts of money have been thrown at the bosses by governments, here and overseas. In the past, whenever it has been a question of improving pensions, grappling with climate change, providing free quality healthcare for all, or expanding public housing, the cry has always been that we can’t afford it. But when it’s a question of saving the hides of a gang of greedy bosses, suddenly money is no problem at all and mind-boggling amounts have been thrown to the bloodsuckers whose insatiable greed has caused the crisis. At the end of the day, the working class will be made to pay for this largesse by savage cuts to our standard of living. Socialist Alliance says: Make the employers and the rich pay! They can certainly afford it. For too long the big end of town has gotten away with paying minimal taxes on their mega profits. The current business tax rate is a paltry 30% and few firms actually pay anything like this. Restoring it to, say, its original pre-Keating government level of 50% would be a big start in delivering the resources for the necessary large-scale job-creating investments in our public infrastructure. Our tax system favours the well-off through very low tax rates, negative gearing and other concessions. The personal tax scale should be made sharply progressive to stop the rich bludging off society. The highly regressive GST, the burden of which disproportionately falls on workers and the poor, should be abolished.