A spectre is haunting Australia; the spectre of unemployment.
Last year, according to the Australian Bureau of Statistics, there was a net loss of 100 jobs. This is the worst result in almost twenty years, since the end of the 1992 recession, ‘the recession we had to have, ‘ according to Paul Keating.
Victoria fared the worst with a net loss of over 11,000 jobs as manufacturing continued to decline. There were net losses of around 2000 in New South Wales and South Australia. All the other states had net job gains, with Queensland on 5600 and then the Northern Territory on 2500 the biggest. The mining boom states, including Western Australia with 1600 extra jobs, grew. So too did the ACT with 800 more jobs and Tasmania with an extra 700.
Overall the situation worsened in November and December with over 40,000 jobs going. In December the figure was 29,000.
Retailers for example took on almost 50,000 less temporary employees over Christmas than the year before. Banks began shedding staff then and that will accelerate in the coming months.
Rather than employing more staff, employers asked current staff to work longer hours. The hours worked actually increased.
There was an increase in full time employment in December. It was swamped by losses in part time employment with a net loss of over 29,000 the result.
Despite this unemployment remained at 5.2% during December.
This was because the participation rate fell by about 0.3%. This means people gave up looking for work.
If the participation rate had remained the same in December as in November unemployment would have increased to 5.6%.
There is worse to come.
The crisis in Europe seems intractable and is worsening. Standard and Poor’s downgrade of France’s credit rating is but one indicator of the storm that could be about to sweep across Europe as ruling class politicians in country after country impose austerity and unemployment on their working classes in an attempt to save their own capital from a round of massive devalorisation.
Unemployment in the Eurozone is above ten percent and in the US 8.5%, although the fall in US unemployment looks more like disillusioned people dropped out of looking for work rather than that new jobs were created or they were moved off benefits after their time ‘expired’.
Underemployment in the US is still massive, and for blacks and Latinos there is no or little recovery.
China’s rulers have been loosening fiscal and monetary policy in an attempt to spark the economy as it shows some signs of decline, from high levels admittedly.
Nevertheless, a slow down in China even from a high rate would cut growth in Australia given the Chinese demand for our resources.
China is dependent for economic growth still on the US and Europe. Europe is in trouble. The US is not that great either.
The crisis in Europe is making borrowing by banks on international markets more expensive. So at the same time the Reserve bank is cutting or will consider cutting interest rates, the pressure on the banks is to keep them as they are or raise them.
If the crisis in Europe gets worse, the doubts about other banks may see, as happened during the global financial crisis mark I, credit dry up as banks refuse to lend to each other because they don’t trust their rivals.
If that is the case interest rates will go up. Of course, much of the Australian bank’s borrowing is within Australia so it may be that the international uncertainty argument is a cover for increased net interest margins and profits.
One of the things often missing from any discussion about the Australian economy is the fact it is a net capital importer. Australian capitalism depends for its existence not just on Chinese demand for our minerals but also on foreign investment. Most of the investment into Australia comes from Europe and the US. So the Eurozone crisis and the instability in the US threaten that.
Treasury predicted that unemployment would rise from 4.9% to 5.5% over the course of this financial year. The outlook for the figures on 3o June however is more pessimistic.
Last month’s budget forecast said there would be 114,000 new jobs created this financial year. With half the year over the figure to date is 8100.
The Government ahs begun to soften people up, with acting Treasurer Bill Shorten saying that Australia ‘was not immune from developments in Europe.’ The other tack the Government has been taking is to reject any idea of increasing unemployment benefits as part of a new attack on ‘dole bludgers’. it’s your fault you don’t have a job, not the system’s is their logic.
yet despite this gloomy prognosis, Labor remains committed to the chimera of a Budget surplus. The party rejected a proposal at its December conference to put jobs before a Budget surplus.
So at the very time when a stimulus might be needed because the market ahs retreated from creating jobs, the Labor Government is going to retreat and leave it to the market to continue to create unemployment.
There can be n greater indictment of Labor than its abandonment of any real commitment to jobs.
One way to defend jobs would be for the ACTU and unions to go on the offensive. here are some suggestions:
- fight for a 30 hour week without loss of pay;
- end all restrictions on strikes and other industrial action;
- campaign for a big wages increase to address the shift in wealth to capital at the expense of labour;
- use the manufacturing plants and the skilled workforce to produce buses and renewable energy sources like solar farms and wind turbines;
- end the gender pay gap by an immediate 20% pay increase for workers in the affected industries;
- no job losses and an end to the job destroying ‘efficiency’ dividend in the public service .
Of course the ACTU and most unions long ago abandoned fighting for workers and instead will be swept along by increasing unemployment, wringing its hand and imploring employers to employ people.
If there is one lesson of the past 30 years it is that class collaboration doesn’t work. Trickle down is dead. Hear that ACTU?
Because this is a crisis of profitability in the developed countries, pussyfooting around and kowtowing to capital won’t work. In the words of the BLF: If you don’t fight, you lose.
The time to fight unemployment is now, not when it hits six or seven or eight percent.
