The Guardian • Issue #1965

Divided we beg, together we bargain: wage strikes in US and Australia

Across the Pacific there’s a peculiar phenomenon occurring. As the latest wave of the COVID-19 pandemic recedes, businesses are struggling to hire workers. Workers are refusing to go back to subpar wages and minimal benefits. While primarily a US phenomenon, given their lack of even the most basic of social security nets and incredibly low wages, there are parallels to be found in Australia.

Millions of workers across the US have become unemployed during the ongoing pandemic, and now businesses and policymakers have been left scratching their heads as many of them are refusing to go back to work. This has been consistent across a range of industries, from fast food to IT. Small businesses have been hit the hardest. However, major multinational franchises like McDonald’s, Subway, and 7/11 have also been feeling the squeeze, unable to fill their often punishing round the clock rosters. This has been a double-edged sword for the working class. While it has allowed unemployed workers to exert more bargaining power, those who stayed employed are forced to work harder and harder by their employers. This becomes particularly dangerous in high-risk front-line jobs.

Naturally, the usual right-wing crowd have been blaming the unemployment benefit scheme for being too cushy, disincentivising people from going back to work. But it’s got to make you wonder: if your business can’t afford to pay workers a decent crust, what are you even doing in business? The Biden administration passed a stimulus package that would grant individuals $300 a week in unemployment aid until September. For a brief period in 2020, the payment was $600 a week, meaning that most workers were earning more on unemployment than they were at their jobs. For reference, $600 a week roughly works out to $15-$16/hr for a 40-hour work week, more than twice the current minimum wage in the US.

With many workers still unvaccinated, the risks greatly outweigh the benefits of going back to such low paying jobs. For single parents, that prospect is even more unappealing. It is important to note that while many workers are refusing to take poorly paid jobs, Heidi Shierholz, director of policy at the Economic Policy Institute (EPI) in Washington, points out that there is still a massive job shortage. This means that employers will regain the upper hand in the long run if workers don’t organise. She also went on to reiterate that the lack of meaningful wage increases is one of the central pillars of the current labour shortage.

Shierholz and the EPI support a minimum wage increase to at least $15/hr, a position she backed in the US House of Representatives in February this year. She stated that, among many of the benefits of raising the minimum wage,

“A majority (59 per cent) of workers whose total family income is below the poverty line would receive a pay increase if the minimum wage were raised to $15 by 2025. Essential and front-line workers make up a majority (60 per cent) of those who would benefit from a $15 minimum wage. A $15 minimum wage by 2025 would generate $107 billion in higher wages for workers and would also benefit communities across the country.”

While a government policy lifting minimum wage would be welcomed, labour movements must go beyond this. Often these small concessions are offered by the capitalist class to appease an increasingly hostile working class. Capitalists sense that danger is afoot and hope to nip it in the bud.

Some of the biggest labour movements in history arrive in times of crises as the weight of capitalism begins to collapse under itself. In June 1933, as the Great Depression continued getting worse, President Franklin D Roosevelt passed the National Industrial Recovery Act (NIRA) in an attempt to implement programs that would help alleviate the economic crisis. It is important to remember that the NIRA was not created out of sheer benevolence but was forced by one of the largest union movements in US history. The NIRA gave workers the right to unionise and guaranteed a minimum wage alongside maximum hours. It also contained Section 7(a) which provided that:

“Employees shall have the right to organise and bargain collectively through a representative of their own choosing, and shall be free from the interference, restraint, or coercion of employers.”

Unfortunately, the NIRA was deemed unconstitutional by the US Supreme Court and replaced by the Wagner Act in 1935. Nevertheless, it was a defining moment in US union history and spurred more and more workers to join their unions, thus further building the labour movement. One should not forget the critical role communist and socialist parties played in supporting, organising, and leading these union movements.

Mass strikes aren’t the only way for workers to assert themselves; even the smallest of victories can demonstrate what is possible. A cafe called White Electric in Rhode Island, US showed this recently. After its workers unionised to demand better wages, greater diversity in hiring staff, and wheelchair accessibility, among other demands, the owner chose to sell the cafe rather than grant them. The workers then banded together to buy the cafe, and from May 1st it has re-opened as a workers co-operative, one of only a few in Rhode Island.

Both Marx and Engels called the unemployed under capitalism the “reserve army of labour.” While Engels was the first to use the term in his 1845 book The Condition of the Working Class in England, Marx made it a necessary part of the way capitalism organises production in Capital.

Capitalism requires that a certain percentage of the population be unemployed at any one time. This allows employers to threaten workers with unemployment if they demand better conditions since the employer can simply tell the worker(s) that they’ll hire other people for cheaper. This picture has become even more complicated over the past few decades with the mass proliferation of offshoring both labour and manufacturing. The only exception to this is in periods of total war, such as the two world wars, where the entire working class is either thrust into manufacturing or put out onto the slaughterhouse of the battlefields.

However, what we’re seeing in the US is a reversal of this rule. Instead of the employers using the “reserve army” to threaten employed workers, the “reserve army” itself is refusing to work until better conditions are granted. The employers are being forced to bargain with them. This is quite a rare form of general strike, while uncoordinated, it is an adamant refusal by the working class to continue under the same conditions as before.

Australia is facing a similar, though slightly different, problem to the US. Unemployment is currently sitting at 5.5 per cent just 0.6 per cent lower than the US. Businesses are able to dob in unemployed people on JobSeeker who refuse job offers, see Guardian “Dobseeker: Morrison’s Attack on Workers” #1960. This led Business Insider Australia to make an astonishing discovery in one of its articles entitled “There’s a simple solution for companies struggling to hire: Pay workers more.” Who would have thought?

Deputy Prime Minister Michael McCormack, who makes over $400K a year, told Victorians whose lockdown has now entered its second week that a “week, in the scheme of things, is not a long time” to go without pay. This came after many working Victorians voiced their concerns over lost wages and the lack of JobKeeper support. According to McCormack the government has already given out enough economic support, particularly to Victoria. He said:

“We have already provided $40 billion, 40,000 million dollars for Victoria to help their economy, to support their businesses. We have done it to make sure that we keep Victorian businesses going, to keep their employees engaged with those businesses … .”

Note the particular emphasis he places on helping businesses before workers. Another Liberal MP, Dan Tehan, told Victorians to go to Centrelink to access the emergency health payments to cover their loss of income but couldn’t confirm if or not they’d actually get any help or not. Given the massive strain that the chronically understaffed Centrelink is already under and that it can often take weeks for a claim to be processed, we can pretty safely say that’s not a viable option for a lot of workers. To say they’re out of touch would be far too polite: this is blatant contempt for working class people.

The example of the US has shown that the slightest show of solidarity within the working class is enough to make the capitalists tremble. Divided we beg, united we bargain. This is what is occurring right now on both sides of the Pacific: workers are refusing to work for a pittance. In 2020, billionaires made $3.9 tril while workers lost $3.7 tril in wages which only confirms Marx’s analysis that capitalism only functions by the former exploiting the latter. It is a system that the working class cannot and should not allow to continue. One is reminded of the poem printed onto the Banner of Operative Painters & Decorators Union of Australasia, Victorian Branch from 1915.



The murmurs
that go to make
the thunders roar
Taken singly, might –
Lull an infant to repose
United their very crash
would shake the eternal
vaults of Heaven

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