Official unemployment numbers reached an 18 year high in June as Australia entered its first recession in nearly 30 years. Despite the Morrison government trying to brush this off with rhetoric of a “business led recovery” millions of people’s lives are being ruined as capitalism reveals its true face.
The job crisis – no jobs to seek
June data from the Australian Bureau of Statistics showed the official unemployment number reached 7.1%. While this is devastating enough, the ABS acknowledged that the real unemployment figure should be 11.3% to match the 800,000 jobs lost between March and June this year.
Official unemployment figures conveniently left out 600,000 people who are receiving JobSeeker unemployment benefit. The justification is they are not “participating in the job market” because government imposed requirements to look for jobs are temporarily suspended.
Unemployed people are not to blame for this situation. The bosses are simply not offering enough jobs for everyone. Figures from the biggest job portal Seek.com show there are currently about 18 unemployed people for every job vacancy in Australia.
If the 13% under-employment rate is taken into account the situation is even bleaker. This means there are millions of people who still have a job but say they need to work more hours to earn more.
Young people are bearing the brunt of this job crisis. Nearly half of people aged between 15 and 24 are either unemployed or underemployed when all the recent job losses are taken into account.
While JobKeeper provided a desperately needed lifeline for many who otherwise faced an even worse situation, the scheme has many weaknesses and is due to be wound back in September.
Many bosses wasted no time in abusing this scheme. More than 3,000 tip-offs to the tax office by the end of May alone, regarding companies ripping off workers while receiving government money. Amongst the corporate giants exposed for rorting public welfare are billion-dollar companies like Mirvac, Lendlease and Blue Care.
A review by the tax office and Treasury department in May showed JobKeeper’s money only flowed to about half of the 6 million first claimed by the Government .
This massive shortfall was presented as good news. “Taxpayers saved $60 billion” they said, alongside explanations about reporting errors and propaganda that the health crisis in Australia is not as bad as in many other countries. That was premature considering the renewed virus spread.
Government claims about incorrect forecasts just don’t stack up. The many obstacles that the government put into accessing the scheme is the real reason for this huge gap.
Hundreds of thousands of small businesses had to drop out of the scheme because of the long wait time. Millions of workers on temporary visas and casual workers who had the same employer for less than 12 months also couldn’t access JobKeeper money.
Government behaviour reinforced a deliberate strategy to announce a big JobKeeper package and then underspend. They have already begun to roll back JobKeeper payments earlier than the announced September end date as well, with the early childhood education and retail sectors targeted.
This means women and young people will be disproportionately affected, something the government knows and proceeded with anyway. Approximately half of all those who have lost their jobs are 15-24 years old!
As the job crisis is deeper than official figures suggest, the big “saving” claimed by the government just means a big number of workers who couldn’t access JobKeeper have either had their hours cut or were forced to join the ranks of the unemployed and at best receive the lower JobSeeker payment.
Scott Morrison recently said that “not all jobs can be saved” when discussing the future of JobKeeper. This is an admission that JobKeeper is not a solution for the jobs crisis from the point of view of workers. The real intention has always been to shore up the profits of big businesses by subsidising their wage bills and to allow the government to remain in control of the volatile situation.
Dilemma for government and big businesses – JobMaker no solution
Big businesses uniformly welcomed the Job Keeper scheme because they benefit from it the most, but they have a dilemma. A long-term reliance on big government spending to prop up the economy is not in their interest.
Governments raise money from taxes for their spending. Big businesses desperately want to avoid increased taxes cutting into profits or hoarded wealth. At the same time, an increase in taxes on workers or cuts to public services will provoke popular reaction against the government. They will also reduce workers’ income for spending on goods and services, undercutting profits.
Some sections of big businesses want to scale down the “unproductive” JobKeeper scheme. The government had to come up with another scheme called JobMaker to ease their concerns.
Announcing “$72 billion for infrastructure spending” the government calls this scheme JobMaker. It is actually just a promise to speed up the approvals for projects that are already in the pipeline for the next decade.
These infrastructure projects are planned to be handed over to private profiteers who are interested in making profit and not providing enough jobs for everyone. Moreover, even the shorter project approval times will be 21 months and that won’t really help those struggling for a job in the immediate term.
As part of the promise to create more jobs, the government is also pushing for more attacks on ordinary people, disguised as “reforms” to education and workers’ rights.
Announced funding cuts will see fees skyrocket for many university courses and Morrison has stressed his focus is on deregulating more industries, with attacks on workers’ unions and conditions to follow.
We need an alternative to these pro-business schemes
Dressed up in promising soundbites, the government’s schemes are full of deception and don’t provide any solutions for the enormous crisis of unemployment facing people in Australia.
Ultimately, these schemes are guided by the interest of big businesses although presented as worker-friendly. Partly this is because the government is under huge political pressure after their disastrous handling of the bushfire crisis earlier this year.
We need an alternative to the policies of the major parties who pushed through these pro-business schemes. Ordinary people should not pay for the economic crisis, through cuts and taxes or job losses while the super-rich minority have banked decades of record corporate profits and amassed a huge concentration of wealth.
Not a single person should be made unemployed by the Coronavirus crisis. While workplaces are closed for the health and safety of everyone, all workers should be provided with extra paid leave or a living wage subsidy that leaves them no worse off. There should be no compulsion for anyone to risk their health for profit, non-essential work should cease.
Where essential work continues to be done workers should receive double-time hazard pay in addition to all existing payments, penalties and allowances. The decisions about what work is essential, what is not and what is safe should be made by workers themselves, and not bosses or the governments who represent their interests.
As workplaces do re-open, all existing work should be shared out, with no loss of pay for anyone. That would have the effect of reducing the working week and improving living standards at the same time, while guaranteeing employment for everyone.
Big, bold changes like these are what’s required to solve the unemployment crisis. Working people shouldn’t have their lives ruined because the capitalist system can’t solve the problem within its own set of rules. There is a vast amount of work that needs doing in society.
Immediately there is work to be done to deal with the public health crisis. But beyond the COVID-19 emergency the priority work to improve society and solve problems include building clean, green high quality public housing, expanding our public transport network, boosting health and social services and providing free, high quality education from infancy to adulthood.
Capitalists and their governments would scream about the impossibility of such a plan. Socialists say it should be funded by the profits of big business in the first instance. If they claim they don’t have the money, then they should open their books to inspection by workers and show us where it’s all gone.
If the biggest companies still refuse, we should take them into public ownership. Genuinely struggling small businesses who provide important services could receive public subsidies, under strictly enforced conditions including that no workers are sacked.
Having democratic control over the economy, especially through key sectors such as banking, energy, communications, transport and healthcare will enable the possibility of planning the economy. We could meet the needs of the majority of people, instead of maximising profit for a few.
By removing the profit motive, a planned economy would actually redirect resources to systemically guarantee a job or a living income for everyone and massively expand the number of socially useful, well-paying jobs in society.
By Triet Tran