Magazine of Socialist Action in Australia

What to do about wealth inequality?

Reading Time: 3 minutes

“Income inequalities are greater than at any time in the last 70 years. Small elites have amassed vast fortunes and massive political power. While for the vast majority of people, living standards have declined and job security has disappeared.” These are the opening lines of the Australian Council of Trade Unions’ (ACTU) new report, Rising Inequality: An Australian Reality.

The report confirms what many of us already feel; that the top 1% of the population have benefited immensely from the long economic boom, while the rest of us are struggling to make ends meet.

Years of stagnant wages has forced people to alter their spending habits. Today workers spend a greater share of their wages on essential items. Housing is by far the biggest cost, followed by food and transport. The portion of our income we once allocated for ‘discretionary’ spending is shrinking.

Making matters worse, many of us are over-indebted. A recent survey showed that an incredible 407,000 Sydney households are over-indebted. This means that they owe at least three times more than they earn in a year. For these people a job loss, or even a modest interest rate rise, could push them over the edge.

At the top end of town things couldn’t be any more different. The nation’s ten richest people have more than $77 billion dollars between them! This is roughly double the government’s entire yearly spend on education, or enough to build some 40 state of the art hospitals!

The working class’ share of national income is now at its lowest level in more than 50 years and low wage growth is a major contributor to the inequality that exists.

The ACTU’s report shows that the number of workers on Award rates has increased dramatically in recent years. Less and less are the unions able to secure enterprise agreements that lock in wages and conditions over and above the minimum. This leads many to question the relevancy of unions.

This is a tragedy because as the ACTU point out: “Unions are the essential element to keeping inequality in check.” Or more correctly, they should be. And they could be if they adopted a different approach to winning a bigger share of the wealth created.

The ACTU argues that the union movement’s role has been weakened by draconian labour laws and the expansion of precarious work. There is no doubt that anti-union laws have hindered the ability of unions to organise, and that casualisation makes it more difficult to hold on to union members. But agreeing on the problem is different from adopting the right solution.

The ACTU’s report is packed full of compelling facts and figures but its conclusions read like a desperate cry for help. Far from outlining a fighting strategy to win real gains for working people it merely tries to give advice to the powers-that-be, calling on them to better manage the crisis ridden capitalist system.

Their hope is that the Labor Party will come to power and get rid of the anti-union laws. This is a pipedream. Many of the anti-union laws in place now were actually introduced by Labor. Their pro-big business polices have contributed to wealth inequality just the same as the Liberals.

Rather than begging the major parties to “change the rules” the trade union movement needs to wage a real struggle and force the change we need onto the agenda. In the past, a bigger share of the wealth was won by workers withdrawing their labour and building mass movements with bold demands. We need to readopt that approach today.

Side by side with a return to industrial action, the trade union movement needs to ditch the Labor Party and build a political alternative that embraces real working class politics.

We need a party that will fight for socialist policies. For example, hundreds of billions of dollars could be raised if we increased taxes on big business. Hundreds of billions more could be utilised if we brought key sectors of the economy into public hands and removed the profit motive.

These billions could be invested in public housing to make it free for many. This money could also be used to make public transport free, and even to subsidise food. Given these are the things that working people spend the bulk of their wages on, it would be a huge boost to their standard of living, even before wages began to be increased.

It will only be politics like this, coupled with a fighting approach, that will turn the tide against wealth inequality and make the trade union movement relevant again.

Editorial comment from the October 2017 issue of The Socialist


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