No Jobs and No Workers? – Strange Contradictions of Capital Accumulation in Australia

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The core hypothesis that I have proposed, and seek to test, is that Australia is in a condition of ‘precarious prosperity’: that the solid level of economic growth driven by the mining boom faces increasingly unsure conditions due the various impacts of the continuing global crisis of capitalism. In this situation two national barriers to capital accumulation have become especially important: the shortage of labour-power and the difficulties the state faces in funding social reproduction. (This must be grasped within an understanding of both the ecological crisis we inhabit and the possibility of a radically different and better society that arises from the everyday struggles of everyday people.) I have argued that much of the action of the state in recent years has been attempts to address these conditions, and that the ‘front-lines’ of struggle match these ‘fault-lines’ of capital accumulation. In short the response of capital to these barriers is to intensify work – paid and unpaid.

This hypothesis has a temporal dimension: the future of the boom, and thus the dynamics of capital accumulation in Australia, is uncertain, and due to the speed capital moves at it could change any time – and thus we would have to rethink our condition.  Perhaps I fall in the trap of making predictions. I am about trying to grasp the ‘tendency’ of the unfolding logics of capital(Negri, 1991). These predictions, like all predictions, are probably wrong. But they are also necessary attempts to map, think and strategize. They need to be constantly revised.

It is with that in mind, that I want to think through two seemingly contradictory pieces of information which have appeared in the popular presses about capital accumulation in Australia: that there has been a rise in unemployment and that there is a skills shortage. The first refers to how different capitalist firms are structuring their businesses to navigate the current economic conditions, the second to the problems on the level of society in ensuring the reproduction of labour-power with the competencies and willingness capital desires (which can then also be understood as the product of a diffuse resistance by workers to be reduced to nothing but labour-power for capital.)

As argued in the 2011-12 Federal Budget the mining boom was causing worries about a labour shortage –leading to major state initiatives to find more labour-power in the various pockets of the population. ‘Labour market constraints are likely to increase as the mining boom ramps up, with businesses not linked to the boom likely to find it relatively more difficult to attract and retain workers’ (2011, 6).  As I have argued here and here the welfare changes of the last few years have been attempts to push those sections of the population on the edges of the labour market into it. Already there is evidence that the changes to single parent payment have had this effect(2013d).

However on the Tuesday 15th January 2013 the Australian Financial Review noted that unemployment was rising and  job advertisements have fallen for  ‘ a 10th straight month in December’(Greber, 2013, 1).  The most recent ABS statics show unemployment to have risen from a revised count of 5.3% in November to 5.4% in December(Australian Bureau of Statistics, 2013).  Though to be fair this rise follows a fall in unemployment from October to November from 5.4 to 5.2% (this is the figure that has been revised up) (Australian Bureau of Statistics, 2012a).  The latest figures also detail the following:

  • Employment decreased 5,500 (0.0%) to 11,538,900. Full-time employment decreased 13,800 to 8,112,500 and part-time employment increased 8,300 to 3,426,400.
  • Unemployment increased 16,600 (2.6%) to 656,400. The number of persons looking for full-time work increased 12,600 to 476,500 and the number of persons looking for part-time work increased 4,000 to 179,900.
  • The unemployment rate increased 0.1 pts to 5.4%.
  • The participation rate remained steady at 65.1%.
  • Aggregate monthly hours worked decreased 1.1 million hours to 1,623.5 million hours.(Australian Bureau of Statistics, 2013)

So there has been a slight drop in jobs (with a growth in part-time employment) but the rise in unemployment  in the ABS figures can also to be attributed to more people looking for work  and finding less opportunities( perhaps at the end of the school year?) rather than companies laying off people . The problem seems to be a lack of jobs growth rather than substantial job loses – 2012 has the lowest level of jobs growth in 15 years (McMahon, 2013). The argument being made in the AFR is that even if commodity prices rise– as the drop in the price of iron ore is often cited as the key indicator of declining Australian economic conditions –  the current ‘focus on cost reduction’ won’t equal jobs(Greber, 2013).

Since these figures were released there has been a rise in reportage on job loses – though these would be loses that wouldn’t be figured into the ABS stats.  The Sydney Morning Herald reported that in total in early January 1200 jobs have been lost(Hutchens, 2013). These include losses due to the Vodafone closing down their phone chain Crazy Johns.  Bluescope Steel has announced cuts to 170 jobs from the Western Point plant in Melbourne (Greber, 2013, 1). Boral has announced that it plans to reduce 700 staff  (Robins, 2013). A great deal has been has been made of these last two but these are planned redundancies that are yet to come. They do seem to be examples of the problems of manufacturing in Australia for the Australian market.   Generally speaking I think we can safely assume that this slight, but noticeable, rise in unemployment is due to a restructuring in the mining industry, the impact of the high Australian dollar on non-resource based exports, large scale job cuts in the public service and community organisations (especially under the Coalition/LNP governments down the east coast) and weak levels of domestic demand for retail and housing despite low interest rates.

Undoubtedly one of the major causes has been the cut in public service positions at a state level – 14,000 full time jobs in Queensland alone(Helbig and Ironside, 2012), and so too the impact of reduced funding to community organisations. ( Queensland’s unemployment rate has risen from 5.5% to 6.2% since the LNP came to power)(AAP, 2013). ‘The data also follows statistics that show the Queensland economy contracted by 1.6 per cent in the September quarter’ (Syvret, 2013).

The notable examples of restructuring appear to be attempts to streamline production to make the companies increasingly competitive and responsive to global uncertainties. ‘Announcing the changes, BlueScope Australia and New Zealand, Chief Executive, Mr Mark Vassella, said “Whilst domestic coated steel demand has not materially declined, this is part of our strategy to continually find better ways to do business and remain a cost effective producer. Regrettably, this change will mean a reduction in the number of employees we require to operate our lines at Western Port, with around 110 employees and 60 contractors expected to leave the business over the coming months’(2013c). CEO and Managing Director Michael Kane explained these changes at Boral as follows:  ‘the Group into an organisation that is more  responsive to the realities of a cyclical marketplace and one that remains competitive not just during the  cycle highs but when conditions are challenging, as they have been for the past few years’(2013a). I am earmarking here that further research is needed on this point. My assumption would be that these are changes in the organic composition of capital  that is the ratio between the amount of capital spent on means of production and that spent on labour (Marx, 1991, 244-245).

Lateline Business (2012) had reported in November 2012 the mining giants BHP Billiton and Rio Tinto were already planning to restructure. BHP Billiton’s earlier detailing of its planned restructuring of its production process seemed focused on increasing out-put relative to investment ( to perhaps remain competitive when the market-value of resources may be declining) and on reducing turn-over time or as Jimmy Wilson President Iron Ore says in the usual management garble ‘targeting the release of substantial capacity at low capital intensity’ (2012, slide 10). That means more coal and faster. Generally speaking the quicker that a capitalist firm can produce and sell its commodities the quicker that its capital and its profit will return to be invested again, and thus the greater profit which can be made in a certain period of time on a certain amount of capital invested(Marx, 1992). Whilst the pressures to reduce turn-over time (both the production time of producing commodities and the circulation time of transporting and selling these commodities) is an inescapable part of capitalist accumulation in general is it convincing to think that as the future of the mining boom is uncertain that the desire to decrease turn-over time (get the stuff out of the ground and sell it as quickly as possible) becomes all the more important?

Yet at the same time there has been another story of a persistent, perhaps deepening, skills shortage (Hobbs, 2013, Dinnen, 2013). In later September the COAG Reform Council ( COAG is the Council of Australian Governments – the body which aims to coordinate Federal and state governments ) reported that whilst there had been an increase in the qualifications of the Australian workforce it hasn’t been to the level to meet COAG’s targets  as part of the National Agreement for Skills and Workforce Development (2012, ix).  This agreement is an explicit attempt to facilitate a Vocational Education and Training Scheme to create a workforce that can function in the contemporary Australian economy. It aims to assist ‘all working age Australians to develop the skills and qualifications needed to participate effectively in the labour market and contribute to Australia’s economic future’(2). Interesting there has been no increase in the proportion of people with Certificate III or higher amongst those 20-24 whilst there has been for all other age groups (15).

The shortage of skills which worries the state is that of skilled blue-collar labour, with many employers struggle to fill these positions whilst there seems to be a larger available pool of white-collar workers. The Department of Education, Employment and Workplace Relations details the skill shortage in the financial year ending June 2012 (that is before the slight economic down turn at the latter end of the calendar year). The most noticeable finding was the recruitment of professionals was relatively easy, ‘74 per cent of vacancies filled (13 percentage points higher than in 2010-11) and an average of 2.3 suitable applicants per vacancy (up by 0.6)’, whilst ‘there was little change in the technicians and trades workers labour market and employers recruiting these workers generally experienced more difficulty than those seeking professionals, with 61 per cent of vacancies filled and 1.7 suitable applicants per vacancy’(2012b, 3).

There is also an argument being made by Mick McMahon the chief executive of Skilled  Group (a labour-hire company)  that ‘the downturn in manufacturing and the privatisation of government utilities are reducing the number of apprentices and draining the economy of important skills’(Hobbs, 2013, 6). Paradoxically the restructuring of capitalist and government firms is leading to greater difficulties for the reproduction of capital on the level of society.

What to make of this, as these arguments seem to describe an impossible situation – a lack of jobs, and a lack of workers?

Firstly it is probably important to take account of the different speeds that these phenomena move at. The recent drop in employment and the reduction of job ads represents the actions of individual capitalist organisations attempting to respond to both the current economic conditions but also their understanding about the future.  The efforts to establish a labour force with sufficient skills represents longer term efforts by the state to ensure the reproduction of capitalist society on a whole. It also demonstrates that training has shifted from an activity carried out by companies as an investment in their staff to one facilitated by the state and specific companies focused on education as a profit making activity and one funded, at least in part, by workers themselves.

This focus on training is an expression of a problem for capital accumulation generally and Australia specifically – that the division of labour is both necessary for capitalism but simultaneously prevents its movement. In Adam Smith’s (1981) early theorisation of nascent capitalism the division of labour is considered crucial to prosperity as it increases the productivity of labour and thus the greater out-put of wealth. The division of labour means the rise of specialisation on at least two levels – the development of different kinds of industry and occupations and specialisation within specific processes of production itself.  The mistake in Smith’s work is an understanding of capitalism as a system geared towards the production of wealth: that is utilities. Marx’s critique of capitalism correctly points out the capitalism is geared not to the creation of wealth but the accumulation of value. The drive to productivity, and thus the reorganisation of the labour process most often using increased investment in machinery, is the drive to accumulate value: both the hunt for relative surplus-value( to produce at a cost lower than the social average and to sell at this average or just below and realise extra-profit) and the use of technology to order the work process in the most effective way to ensure the compliance of labour to capital (‘it would be possible to write a whole history of the inventions made since 1830 for the sole purpose of providing capital with weapons against working-class revolt’) (Marx, 1976, 436 & 563). But if this division of labour requires increased specialisation of workers and their training this can mean workers will not or cannot shift from industry to industry as fluidly as desired by the movement of capital.

The dynamic transformations of the capitalist mode of production should make us sensitive to changes in class composition: that is the relationship between the way that work is organiser by capital and simultaneously the way that on this terrain workers articulate their own struggles and desires – which can force capital to reshape the former.

The most obvious shifts in class composition in Australia are consistent with the experiences of much of the Global North – the decline of the industrial production and the rise of services. ‘For most of the first half of the 20th century, around half of Australia’s workers were employed in Agriculture, Forestry and Fishing; Mining and Manufacturing.  Today, these industries represent 13% of the workforce.’ Whilst what we call services now employs three quarters of the workforce. (Department of Education Employment and Workplace Relations, 2012a, 14). The largest demographics of workers are those that work in white-collar, care and service industries. ‘The largest occupational group in employment terms is Professionals, with more than 2.4 million workers. Professional jobs generally require completion of a Bachelor degree or higher qualification…In percentage terms, employment growth was strongest for Community and Personal Service Workers’(Department of Education Employment and Workplace Relations, 2012a, 25) This change in the workforce has also lead to an increased emphasis on formal qualifications. ‘Since 1990, employment growth for jobs that generally require a qualification at the Diploma level or higher (or extensive on-the-job experience) has outstripped the growth in low skilled jobs (employment growth of 78% for occupations at skill levels 1 and 2 over this period compared with 17% growth for skill level 5 occupations)’(Department of Education Employment and Workplace Relations, 2012a, 26).

These figures tell us something but we need to go beyond them. My general sense (so take it with a grain of salt) is that the contemporary work force is built around a highly stratified division of labour and specialisation. That is terms like ‘professional’ and ‘services’ hide a vast amount of different occupations which often require specific skill sets that don’t easily shift from one area to another. But more than this, the division of labour seems to produce different kinds of subjectivities and styles, different senses of the self which makes people resistant to change occupations ( let alone locations) even when facing a difficult future.

One of the difficulties for communists today is that the mass worker (Negri, 2005, 12) of the past no longer functions as a symbol of the experience of work and struggle that the majority of the working class can see themselves in. Indeed the notion of class, especially of working class, doesn’t fit with many of the self-perceptions of workers, even though we may say, since they have nothing but their labour-power to sell, they are objectively ‘working class’. Rather the vast spread of jobs, the hierarchies between them and the way they overlap with structures of gender and ethnicity produce a spiral of different identities and on the job cultures.

In Brisbane it is striking the different styles between different workers (speaking in generalisations). Baristas at fancy cafes are noticeable for their piercings, sense of fashion and increasingly prominent hand, forearm, neck and facial tattoos that would be more than a novelty elsewhere (and even ten years ago would have been considered ‘jobstoppers’). On the rallies against cuts to the public service and community funding in Qld construction workers marching under the banners of the Construction, Forestry, Mining and Energy Union and the Builders Labourers Federation stood out remarkably from the rest of the rally. They were the loudest contingent, seemed to have a tighter sense of being part of a group and carried themselves with far more of a defiant swagger than the rest of the march – for example it seemed to be overwhelming construction workers who were in the pub before the march and had much more of a fuck you attitude than many of the white-collar public servants – also being at the pub meant that these workers weren’t planning to go back to work after the end of the rally like the rest of us. At a strike meeting of construction workers during the Queensland Children’s Hospital dispute organiser Bob Carnegie argued how the industry plays an important role transforming the lives of many locked out from other occupations.

More negatively these differences in style manifest themselves in hostilities between sections of the work force often based on the correlation of employment with lifestyle. Either in a  form of snobbery directed say towards fly in flight out mining workers as ‘cashed up bogans’ or towards say public servants as overpaid lefty do-gooders who are allergic to work and drain on the economy ( that later was a relatively successful refrain trotted out by the LNP government to rally support to cutting public service employment.)

Now whilst there are many exceptions to all this I think it helps explain a lack of mobility in labour, a resistance to being moved and shifted around the country and from industry to industry as capital demands.  I think it also, confusingly, is an expression of a kind of non-political confidence, that hasn’t arisen from collective struggle in the present, but rather from a matrix of inherited victories, economic boom and individual non-compliance. Also workers in Australia have been offered a high work, high credit and high consumption deal by capital – and the ideological wrappings of this deal was the promise that you can be who you want to be which corresponded to a certain level of lived experience – as long as what you want to be can exist within the circulation of commodities and the accumulation of capital. Thus now capital needs to organise a way of disciplining workers to greater compliance and lowered expectations whilst maintaining social stability.

How will this happen? Can we expect any large set piece industrial conflicts?  In the next few weeks the PM will announce a response to the Prime Minister’s Taskforce on Manufacturing’s report which may detail at least the Federal Government’s plan to address these barriers to accumulation(2012). However since the Federal election has already been called this may mean that normally aggressive and right-wing allied sections of capital may delay any large confrontations as they might raise the spectre of Work Choices – arguably the Achilles Heel of the Coalition – and wait till the Coalition’s victory ( which is a dead certainty). Will this have an impact on the activities of state governments  – for example the Qld Government’s plan to move service and retail workers from the Federal to State awards and thus decimate their conditions(AAP, 2012)? After the announcement of the election Peter Anderson from the Australian Chamber of Commerce and Industry called on both the ALP and the Coalition to provide policy which would lower the cost of business and create the necessary infrastructure (‘human’ and ‘economic’) for capitalism in Australian to be competitive (2013b).

What can radicals draw from all of this? Firstly it challenges to how we understand capitalism. In conversations with comrades often capitalism is seen as being driven by either the desires or plans of the ruling class or by some amorphous set of ideas called ‘neo-liberalism’. Yet the closer I try to grasp capitalism as it moves ( and thanks to the work of Marx and others) the more it seems to be driven by a series of often contradictory needs, efforts and tendencies that may or may not find some form of overt expression in some of the political factions of capital. Thus in any one moment there are numerous incoherent and contradictory needs for capital accumulation and reproduction to take place which form a functioning totality only through the movement of these separate and diffuse parts themselves. Capitalist growth reduces the supply of workers and thus can drive up wages, whilst increased unemployment can reduce demand and so on. The state then is necessary to hold together and to attempt coordinate, or at least minimise the friction between, these multiple tensions – but this can create other problems too.

In terms of struggle I hypothesise then at least some of the antagonism by workers is at the moment is largely expressed individually in various forms of reluctance or refusal to train in certain skills, look for certain work or move to certain locations in as so much to do so would break from their desired or normalised form of life such as it is. Obviously different groups of workers at different places in the internal hierarchy within the class can do so more than others. Also such an ability can only hold whilst capital is growing and unemployment remains low – it is a limited strategy. Is there a way of seeing a more aggressive and collective articulation of the refusal to reduces one’s life to being nothing more than labour-power to be organised, used and exploited as capital desires?

The hierarchy within the class, which arises in part from the division of labour, is a stumbling block to this. The few overt and collective struggles that do erupt don’t seem to circulate much through the class as a whole (mainly only to small groups of overtly politicised workers and on the basis on their expressed political commitments). Whilst  the September quarter 2012 saw a rise in number  of and days lost to industrial disputes there was a decline of the number of workers involved and ‘the Construction industry (44,700) and combined Education and training and Health care and social assistance industries (40,400) together accounted for 77% of the total number of working days lost in the September quarter 2012’(Australian Bureau of Statistics, 2012b). The limitations of trade union structures which are unable and unwilling to allow broader class circulation can only take part of the blame. How can we attempt to work out a way of organising that will build real social solidarity in the class? Where are some of the points where it does emerge? Are they always in the workplace proper? The recent natural disasters of the last few years have seen remarkable moments of self-activity and collectivity. The class movement to come must be able to draw in cleaners, teachers, miners, shop assistants, computer game designers, labourers, security guards, cooks and on and on, all of us, into a common project. We don’t know how to do this. We have to invent it. Our starting point can only be the reality we live in.

Image is of the ‘Our Future’ poem/monument by Gina Rinehart taken from The Worst of Perth

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7 thoughts on “No Jobs and No Workers? – Strange Contradictions of Capital Accumulation in Australia

  1. Maggie

    HI Dave, Good article and yes the situation of skills shortage and unemployment may well combine into a peculiar crisis in the near future. Employers in mining and construction are eyeing what they see as cheap and compliant labour from SE Asia and elsewhere as the answer, using the new migration employment agreements. Unions in the sector are seriously concerned about this as another divide and conquer strategy of the employer.
    Re building the collective, where I live now in the Northern Rivers we are in a massive battle against coal seam gas and I am amazed at the unity developing amongst out community, farmers, professionals, workers and greenies are all united and mobilising against our common enemy. The Knitting Nanas against CSG are some of our most determined activists leading the charge. At the pickets at Glenugie and now at Doubtful Creek there are all sorts of people but most are over 40 and look pretty mainstream (well as mainstream as you can look after a few days camped at a picket!)
    While I think the whole NIMBY thing is a great mobiliser it seems to me that this is has legs beyond just self interest, so I think its worth thinking about in terms of how people are identifiying as social groups more broadly, and as guardians of future generations natural assets.

  2. And Hi Maggie, I think the anti-CSG campaign is really interesting – as it is a struggle standing directly in the way of a key element of accumulation in Australia, and is happening in areas long neglected as sites of political conflict. I would be interested to hear more about your thoughts and experiences.

  3. usevalue

    Dave,

    I generally have three types of reactions to your writing. When you’re going on about practical, concrete facts, I go “Oh, that’s very interesting. Glad he did the leg-work on that.” When you’re reprising Marxism 101, I go “Oh, that’s a bit didactic and dull. I’ve heard it before. I wonder who his target audience is?”

    Sometimes though you say or write something which makes my brain fizz and spark. Ideas start bubbling incoherently, connections flash and disappear. I’m overwhelmed by something in between a laser light show and very strong drugs. At the conference in Wollongong, I made the mistake of trying to announce the effects coherently, resulting a very bored and exhasperated expression from yourself. Anyway, this time I’ll just indicate the catalyst and simplify the semantic content of my reaction, trusting that the effects of your words will take a few months to mature into something interesting.

    Your words:
    “Yet the closer I try to grasp capitalism as it moves ( and thanks to the work of Marx and others) the more it seems to be driven by a series of often contradictory needs, efforts and tendencies that may or may not find some form of overt expression in some of the political factions of capital. Thus in any one moment there are numerous incoherent and contradictory needs for capital accumulation and reproduction to take place which form a functioning totality only through the movement of these separate and diffuse parts themselves. Capitalist growth reduces the supply of workers and thus can drive up wages, whilst increased unemployment can reduce demand and so on. The state then is necessary to hold together and to attempt coordinate, or at least minimise the friction between, these multiple tensions – but this can create other problems too.”

    My reaction:
    Dude, I am so fucking high right now.

  4. Hey James
    Well firstly sorry for being a jerk in Wollongong! Thanks for the feedback, I am try to make the use of Marx seem less ‘bolted on’ and more integrated to the structure of the piece.
    Also I look forward to the ‘something interesting’ when ever you get your thoughts down on paper.
    cheers
    Dave

  5. Interesting post Dave. Where do you see insecure employment arrangements such as third party agency work and third party contracting out, particularly in services and logistics, fitting in with all of this?

  6. Hi Godfrey. Honestly I would need to do some research but just from personal experience and the experiences of friends and loved ones ‘precarity’ in Australia seems so different from elsewhere as it happens in conditions of low unemployment – thus the legal position of people’s jobs are insecure but the possibilities of continuing work are more certain. I think we can see it as a mechanism that is used to both strip conditions and individualize the experience of work – take for example the dispute at the Queensland Children’s Hospital where different workers doing the same job had different conditions depending on the contractor and sub-contractor.

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