The Guardian • Issue #2100

High profits mean low wages

  • The Guardian
  • Issue #2100

Photo: maisa_nyc – (CC BY-NC-SA 2.0).

According to a recent article in Canberra Times (13 May 2024), passive returns for property investors are enormous and well outside what workers gain through wage increases. According to capitalist fund managers, Ali and Gaby Rosenberg, property investors expect average returns of 8 to 12 per cent annually and those venturing into the stock market should expect average profits of between 7 to 10 per cent. All this is a hallmark of capitalism and is unsustainable in the long run.

According to the ABS, wage increases over the last 10 years have averaged 2.7 per cent, well below what capitalists get. Latest figures from the Federal Budget indicate real wage increases are being lowered to just half a per cent per year. The Communist Party recognises that capitalism produces low wages to maintain profits as the amount of capital accumulates, and this is what the ABS data shows – annual wage growth is disproportionately low compared to profits. 

There is no economic reason why workers, who produce everything, should get less benefit than passive capitalists who receive rents, dividend and interest, even while they sleep. This exploitation developed over a long history of capitalist governments establishing institutions, laws and guidelines to build capitalism and advantage capitalists. As a result, more workers’ families are heading into financial stress and into reliance on welfare state expenditures.

There is now a widening gap between the falling share of Australian GDP flowing to labour compared to the increasing share of GDP flowing to capital.  There is a struggle between labour and capital over this division and workers, if with no organisation, can easily miss out. Dominating this struggle is how capitalism protects itself, but capitalism cannot do so forever as low wages makes it hard for the community to purchase all the goods and services capitalists want to sell.

Workers can protect themselves and secure a financial future for their families by eliminating profiteering and developing socialist and cooperative forms of production. This is what the Communist Party of Australia is working to achieve.

Canberra Comrade

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