The recession that doesn’t have to hurt if we share pain

Here’s another article suggesting how to solve unemployment in the recession – by Adele Horin, in today’s SMH. If we all take a cut in hours, Horin proposes, then no one need be sacked. This reminds me – of a demand put forward in the 1930s – “a sliding scale of wages and hours” – wages should rise to compensate for inflation, and individual hours of work should be reduced to share the work around. Only Adele Horin is not suggesting that take home pay is kept the same.

“Putting all staff on, say, a four-day week or implementing across-the-board pay cuts, including the pay of senior executives, is not the usual way Australian business deals with falling revenue in a recession. Unions don’t like this approach, given it undermines hard-won conditions, and bosses find it trickier to implement than targeted or mass lay-offs. Workers who feel safe or have options may not want to make sacrifices to save more vulnerable colleagues. But the spread-the-pain strategy, where the alternative is significant retrenchments, deserves serious consideration.

It is unfair to apply shock therapy to a minority of workers while others are totally protected. The unlucky ones will be reduced overnight from a regular pay cheque to a poverty-level unemployment benefit of $224 a week for a single person. The lucky ones who keep their jobs are likely to see their incomes rise over the next two years because of lower interest rates, falling petrol prices and higher family payments.”

Adele Horin at least shows some awareness of the pain and damage caused to workers who get the sack. But like Mark Davis writing yesterday, she seems blissfully unaware of how hard it is for many in jobs to manage even on the pay they get now.

“Sharing the pain around” sounds like a good idea, but:

1. How are the wealthiest and therefore most able to share the pain, to be made to do so? There is no sign of them volunteering across the board, nor of any government taking on the big end of town and forcing them. True – the unions aren’t making a noise about this either, but they really should be, and it would be in workers interests to to do so.

2. Adele Horin specifically notes that unions are not in favour of her idea, since it reduces hard won union conditions. So – she seems to be proposing that employers take this idea up AGAINST unions. The further weakening of union rights and conditions that this implies only further strengthens employers in the system, and makes it even LESS likely that the wealthy will share the pain, i.e. cut their consumption and acquisition. Even though the article proposes that senior executives also take a cut, it would have to be the power of the senior executives behind this idea, making it likely to most heavily penalise the least well off who have jobs, and to in effect extend the blight of casualisation of the workforce.

3. Nonetheless, unions, workers, do need proposals which will take care of all workers in the current economic crisis, including preventing sackings. The conundrum is that the mess is created by capitalism, and the only solutions that get approval in the media and from politicians are ones that serve and preserve the driving motive of capital – profitability from employing workers. Any solution that does not penalise workers will penalise capital and profits. Do any unions have the courage to stick their heads up, propose and fight for solutions to serve workers and challenge capital where necessary?

The idea of the sliding scale of wages and hours is a good starting point, for refinement.

An additional question..

Since most workers need money to pay for goods and services that we use, and the material capacity to produce those goods and services still exists (raw materials, factories, vehicles, machines, computers, people to do the work…) then why should we reduce the goods and services we use when the problem is caused by the system that allows the wealthy to use money in effect for gambling on the value of what is produced, when and where…? So the gambling with money has put money out of whack with the goods and services the money can really buy…. and so capitalists cut production, sack people, and markets shrink, etc.


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