Here is why neoliberalism, whatever economic benefits it may have delivered to households since the 1980s, is inherently unstable and can only ever end in tears: the corporate sector never knows when to stop demanding that the rest of the community be forced to hand over resources to it. The demands for corporate tax cuts will never stop; the demands for punitive industrial relations reform aimed at cutting wages and curbing unions’ already limited power will never stop.
Step forward the most rapacious, parasitic business lobby in the country, the Minerals Council of Australia, which has taken a break from spruiking the virtues of eating coal to issue a new call for industrial relations reform. Its campaign will be fronted by former Labor MP Martin Ferguson, who’ll mumble his way through a list of demands today. The only surprise about Ferguson’s involvement, Labor MPs would note, is that the whole thing wasn’t leaked to The Australian the moment it was agreed.
The MCA wants a return to individual contracts, more curbs on the power of unions to meet with workers, and a dramatic narrowing of the matters that unions can bargain over, further curbing their ability to access authorised industrial action. It would amount to the greatest attack on workers since WorkChoices, particularly in its aim to prevent unions from getting access to workers, which makes it extraordinarily difficult to represent their interests effectively.
But surely the MCA wouldn’t be calling for such a massive assault on workers unless things were really crook in the mining sector, with rampant unions destroying productivity and blowing out wages? According to the Productivity Commission’s most recent annual productivity update for 2014-15, published last year, mining labour productivity growth under the inflexible, pro-union, uninnovative Fair Work Act, was 22.4% (yes, 22.4%) compared to economy-wide labour productivity growth of 1.9%, and three times the growth of the next highest sector, utilities.
Needless to say, the productivity surge is partly the result of the massive investment in mining undertaken by companies — but it’s a bit odd that Ferguson claims there’s a need to “boost productivity” in the sector.
As for wages growth, yep, it’s definitely out of control in mining — in the four quarters to March, wage price index growth in mining was a total of 0.7%, compared to 1.7% across the whole private sector. The next lowest growth rate was 1.3% in real estate and property services.
This isn’t irony or inconsistency, this is how the corporate sector works under neoliberalism: workers must always be squeezed further, no matter how low wages fall, or how much of the wage share of income has shifted to companies. Similarly, company taxes must always be cut, no matter how little tax companies already pay.
In case you think the MCA is unrepresentative of the wider corporate sector, today Woolworths is angry that the Fair Work Commission has blocked retail sector enterprise agreements that make individual workers worse off and complaining about “uncertainty”. It also wants penalty rate cuts imposed immediately, rather than phased in, also because of “uncertainty”.
Wage price index growth in the retail sector over the year to March? Well, that’s also out of control — a whopping 1.8%, compared to CPI of 2.1% for that period. Real wages cuts are apparently insufficient for Woolworths — it wants to cut wages harder.
And it will always want to cut wages, no matter how much damage it does to demand throughout the economy, no matter how much alienation and disaffection toward market economics that it engenders in ordinary households. No amount of wealth transfer from households to the corporate sector will ever be enough.