- The Guardian
- Issue #2208
Overall, unemployment is a terrible thing. Nobody likes it. In the short term unemployment means frustration, financial pain, and embarrassment. Long term unemployment wastes human time and potential, and correlates with substance abuse, family violence, and suicide.
The Albanese Labor government makes things worse by keeping JobSeeker way below the poverty line, and continuing the Liberal-National Coalition’s policies of Mutual Obligations, sentencing unemployed people to hours of appointments with private Job Network agencies and courses of dubious merit. Labor could raise the rate, as they’ve been urged to by unions and welfare groups, so that unemployed people can think of looking for work instead of worrying about starving. They could scrap Mutual Obligation and stop making unemployed people jump through pointless hoops to survive. Even then, unemployment would be really bad for the unemployed and for Australia. Who needs it?
The Reserve Bank of Australia thinks we need unemployment. They worry about “tightness in the labour market.” In everyday English that means that too many people have jobs. RBA governor Michele Bullock has said that a period of higher unemployment may be needed to “rein in inflation.” For her being out of work is a sacrifice that people have to make for the greater good, not that Michele Bullock is offering to lead by example and join the ranks of the unemployed.
High rates of employment are not what causes inflation. Profiteering by business is a major driver of inflation. The Australia Institute puts it clearly: the biggest driver of inflation is surging company profits. Economist Greg Jericho says that the RBA’s own data makes it clear that “non-wage factors like massive corporate profits are driving inflation, not the meagre wage growth of workers.”
If the government were serious about reducing inflation, they’d be cracking down on profiteering by the supermarket duopoly and petrol companies. They’d also put caps on rents and house prices. Everybody needs somewhere to live, and when the cost of putting a roof over your head goes up by much more than wage rises, it puts pressure on prices. The government does not do these things and the RBA does not beg them to. It blames high rates of employment.
There’s no mystery about why capitalism needs unemployment. To put it clearly, unemployment on a large scale helps keep workers in line. What Karl Marx called “the reserve army of the unemployed” forms a threat to people who are in work. The threat is that if workers agitate for better pay and conditions their jobs could easily be given to someone hungrier. What capitalist employers want is for workers to be grateful that they have a job at all, instead of angry that they’re creating the wealth and being ripped off.
Usually capitalists wrap the threat up in talk of wage rises “costing jobs,” but there are times when the mask slips. Luxury property developer Tim Gurner caused a stir three years ago by telling a business event that Australia needed a 40 to 50 per cent jump in unemployment to remind tradies “that they work for the employer, not the other way around.” Gurner was scolded for being so obnoxiously blunt about it at the time, but he was saying what a lot of employers really want. They want workers to be hungry and scared.
Capitalism needs unemployment but workers don’t. What we need is full employment. To get that, we need socialism, not a system that puts the ‘needs’ of big business first.
