Incomes, Inequality and Class Composition – ( still a bit drafty)

Firstly I would like to apologise to those of you who read my blog for the long time it has been since my last post. It is a difficulty finding time to even read systematically at the moment let alone write. I don’t mean this as just a simple whinge –because I think that it is symptomatic of one of the problems afflicting the possibility of class organising right now – we need the time in our lives to think about what is happening to time in our lives. More broadly, unlike perhaps workers in much of Europe who face the impact of rising unemployment, workers in Australia labour under a condition of too much labour – at least at the moment (though of course any amount of wage-labour is really too much wage-labour). It is too early to tell if the proposed closure of the Ford plant and the entry into voluntary administration of Swann Services  are anomalies and growth will continue or signs that winter is coming (since I have written this lines the first time it was become far more clear that with the decline of  the rate of growth of industrial production in China that the mining boom, which has underscored growth in Australia for 20 years, is ending).  Marx quotes the Congress of the International Working Men’s Association ‘ We declare that the limitation of the working day is a preliminary condition without which all further attempts at improvement and emancipation must prove abortive…’(Marx 1990, 415). Now I don’t know if the IWMA was thinking about having the time to write and discuss but perhaps they were. I must admit that I am not sure how an effort like this blog actually fits into the process of class recomposition because I am not sure what the role of ‘ideas’ really has in the messy processes of struggle. I am sure that it has some role but what that is I am confused about (and welcome comments and debate.) But if the attempts to theorise the world we live do play some part in the self-emancipation of the class then it is clear that the lack of time we have to engage in this activity (snatched between moments of work, time with those we love, socialising and resting, acts of political militancy) is contributing to just how outgunned we are in relation to capital. Reading The Poorer Nations (Prashad 2012) I am struck by the huge size and financial capacity of the intellectual apparatus capital has to think, theorise and popularise its understand of the world. Even in Australia it is a struggle to find the time to read the reports that come out of the Productivity Commission, the various business groups and economic think tanks let along attempt to think them through and write about them. (Thus my outrage that the Qld government wasn’t going to release the 1000 page Queensland Commission of Audit quickly turns to dread when they decide to – ‘oh my god I have to read a 1000 page report!’)

I want to continue the investigation into tensions around questions of social reproduction – almost every day even in the mainstream press there is evidence that for the thinkers and actors of capital such questions are increasingly the questions they are wrestling with. And for the rest of us we are facing a very Australian form of austerity, methodically rolled out, piece by piece with the way paved by ideological apparatus of the media, the commentariat and most importantly the commissions of audit. But quickly I want to pick up a thread from the end of my last post about the changing class composition of labour in Australia. Much of this will draw on material presented ( very briefly) at  the ‘May Day Forum: What’s Working? Organising collectively for lives of dignity and justice’ which was organised by the May Day Group which I am part of. Again this work draws problematically on research taken ‘from above’ – in this case reports produced by the Productivity Commission which built on the work of the Australian Bureau of Statistics and some of the related surrounding literature. My mathematical abilities are limited at best (I never studied maths past year 10 and that was in 1994) so I can’t question the validity of the ABS’s nor the Productivity Commission’s technical methodology. There are also problematic ideological elements to how these reports function. The starting point of the PC’s work is that there are no substantial antagonisms in capitalist society – something that statistics creation of averages helps cement. There are also interesting more overt ideological elements in these reports – for example Trends in the Distribution of Income in Australia directly tries to engage with the language of the 1% vs 99%(Greenville, Pobke, and Rogers 2013, 53-57).  The role the Productivity Commission plays in constituting a particular form of the management of capitalism in Australia is an important question  (as my friend Rob points out and is doing some really important work on).

There is another problem in that the kinds of knowledge produced by these reports show things that can be easily measure and quantified – which at best can only show a one sided view of class relations.

A linked problem is how these statistics even if carried out in good faith miss what is hidden in under the legal normality of Australian capitalism but is necessary for its functioning. At the May Day Forum one comrade commented on the commonly observed phenomena that international students who come to Australia are only allowed to work 20 hours a week – but are often employed cash in hand doing more hours but at a below award rate. Another mentioned a workplace where security guards trying to get permanent residency are being charged $50,000 by their employer to get the necessary paper work to qualify – and thus are working essentially for free.  That the working class in Australia is not the same as the Australian working class and is constituted and set to work for capital by the very real divisions of citizen and non-citizen is something I too easily forget and should not. Also these practices can’t just be seen as exceptions to the rule they are rather necessary structural elements of capital accumulation – ones that can only really function due to their status of semilegality or out-right illegality. Just like how reproductive labour in the home never appears as part of GDP. I assume much of these black and grey areas of capitalism exist outside the view of the Australian Bureau of Statistics. Capital’s strength is, in part, that through its movements surplus that is produced throughout the diffuse workforce is vacuumed up to those areas of investment that have the ‘highest’ composition of capital(and thus potentially on a workplace to workplace basis lower rates of surplus-value.) Thus whilst the success stories of capital are most often those that glitter and shine the profits that are realised at one place are often produced elsewhere.  ‘In order for there to be an average rate of profit throughout the capitalist system, branches of industry that employ very little labour but a lot of machinery must be able to have the right to call on the pool of value that high-labour, low-tech branches create. If there were no such branches or no such right, then the average rate of profit would be so low in the high-tech, low labor industries that all investment would stop and the system would terminate’(Caffentzis 2013, 79). If this is true this would mean that the ‘patch-work’ or ‘two-speed’ economy of Australia is just as much about where profits are realised as it is about where they are generated.

It would also be wrong to see these workers as simply victims. Taxi drivers, many of them Indian migrants or students, have taken (by Australian standards) militant action in defence of their conditions and their lives. Currently cabbies in Melbourne are involved in a struggle at Melbourne Airport. An interesting discussion of this can be found here.

It also should alert us to the very real limitations of trying to grasp with class within the boundaries of the nation-state.

Yet the nation-state does construct our lived experience even if the class and our struggle is global. If we do try to sketch our picture using these official sources what do we see? Simply put that they last few decades have been ones where there is a lots of work, increased rates of household income, increased inequality between capital and labour and also amongst labour.  That is capital has increased its exploitation of labour at the same time that household incomes and consumption increased. These changes are effects of or expressions in the transformation of the composition of capital accumulation in Australia that emerged out of the end of the Keynesian-Welfare-State-Social Democratic period of the post-Second World War.

As a long term tendency when it comes to understanding how we work and how work impacts our lives what is noticeable is that there is a lot of it – work that is, maybe not so much living. So despite the recent news that unemployment is creeping up ( the 9th May unemployment figures shows  the current unemployment rate to be 5.6% up from less than 5.2% last year) the long term trend since the 1980s has been an overall increase in the participation rate(Australian Bureau of Statistics 2013). In a 2006 paper the Productivity Commission stated ‘Australia’s aggregate workforce participation rate increased from 61.3 per cent in 1980 to 64.4 per cent in 2005’(Abhayaratna and Lattimore 2006, 9). The concern of this report – reflecting a major concern of Australian capital – is the impact of a declining potential labour pool due to an aging population(55). Or to frame it in Marx’s terms the impact of the boom and demographic changes would lead to a decline in the ‘Industrial Reserve Army’(1990, 781). The challenge then was to find those pockets of the population normally considered outside the workforce or only marginally participating in it and push them into it. This is, I contend , the rationale behind welfare changes in recent years. Recently the Federal Government’s National Sustainability Council has canvassed the idea of raising the age of retirement to 70 (Bita 2013).

Of course the path of capital didn’t run smooth and the years of the 80s and 90s were years of high unemployment as the Fordist mass worker was broken apart and disassembled – thus perhaps it is no surprise then that participation rates have risen since the 1980s. But even in the early 60s where unemployment hovered at often less than 2% the participation rate was much lower than now. For example in 1964 the labour force participation rate was 59.4%(Sorrentino 1983, 25). With the boom of the 2000s the participation rate has increased even further. Looking at those aged 20-74 the participation rate for men increased from 78.1% in 2001-02 to 79.3% in 2010-11 and for women from 60.3% to 65.3% (Australian Bureau of Statistics 2012). And this has been one of the most noticeable changes – the rise of women’s role in paid work coupled with an increasing participation of older workers. ‘Since 1980, the participation rate of females aged 25 to  54 has increased by around 20 percentage points,  while the participation rate of women aged 55 to  64 has risen by a remarkable 35 percentage points. Male participation declined from 1980 to 2000, but since then the participation rate of males aged 25 to 54 has increased slightly, and the participation rate of males aged 55 to 64 has risen by over 10 percentage points’(Connolly, Davis, and Spence 2011).

The Australia Institute has argued that argued that the  (paid) working week is getting longer  – though as we shall see due to the rise of part-time and casual work this is not the case for everyone. (Again I feel it necessary to pause and remind myself that the working week extends into the working we do outside of wage labour – the work of unpaid reproduction). The average work week for full time employees is 44 hours long compared to an average of 41 hours in developed countries (Fear and Denniss 2009, 4). The problem with this average it that it hides the vast disproportion in work hours which is part of the story of the increased inequality within labour.

It would not surprise anyone that how and where we work has been massively transformed:

Manufacturing is now a relatively much smaller component of the economy today than it was in the past (accounting for just 8% of employed people). In August 2011, the Health care and social assistance industry employed more people than any other (12%), followed by Retail trade (11%) and Construction (9%). Agriculture and Mining only account for 3% and 2% of all employed people now. The growth in some service industries also reflect a changing Australia; some 77% more people now work in the child care industry compared to just 10 years ago

In August 1966, 46% of all employed people in Australia worked in production industries. Fast forward to 45 years later, and that proportion has halved to 23%. During that 45 year period, almost all employment growth has been in the service sector, the workforce of which has more than tripled from 2.6 million to 8.7 million, a relative rise from 54% of all employed people in August 1966, to 77% in August 2011. Meanwhile the number of people working in production industries remained steady at between 2.2 and 2.7 million.

graph 1

(Australian Bureau of Statistics 2011)

The shift from blue to white collar, from production to services, is only part of the picture. The growth of white collar work or the service industry refers to the explosion of a vast array of professions and occupations. This story is both a story of increased inequalities within the class, but also, at this of crucial importance the disappearance of an obviously common experience of work that acts as a pole within the class. So on the level of industry in 1966 manufacturing  employed 26% of the workforce and wholesale and retail trade 21%, whilst in ‘2011 the Health care and social assistance industry employed more people than any other (12%), followed by Retail trade (11%) and Construction (9%)’(Australian Bureau of Statistics 2011). Of course this leave a great deal unsaid such as the actual organisation and the composition of these workplaces, but this information does gel with the more everyday and empirical experience – especially the declining employment of workers in the massive production firms, the ‘workers’ fortresses’, such as those of the steel industry. From memory in the late 1970s the steel workers in Wollongong employed 22,000 people and the last time I check (many moons ago) it was down to 7,000 or less. My friend Jim told me that when he was a meat worker in the 60s and 70s 9,000 people were employed in abattoirs in Brisbane, but now with changes to containerisation and logistics a much smaller amount of workers are employed out near Roma (and I think Logan too).

It was never the case that under Fordism that all workers, or even a majority, worked in factories, but this experience of the worker, and the site of the factory acted in part as an expression of a shared conditions (and it must be said often worked to marginalise and hide other struggles in the home, on campus, in the asylum  etc.) There isn’t a similar experience of work in Australia or perhaps under postFordism more broadly which fulfils a similar function. Hardt and Negri’s attempt to shift our gaze from the factory to the metropolis fails to take into account that even if the city has become the site of value accumulation in the North it is also a geographical concentration of the divergence, even fragmentation, amongst labour(2009, 153-154). Though of course for this branch of post-autonomia what allows capital to put this diversity of workers to work is the existence of the common – the very same thing that allows labour to exist as the multitude in struggle for itself(Virno 2004, Hardt and Negri 2004). There really is something to their argument but it doesn’t stop that on a day to day level in Australia the condition of labour is one of divergence.

We see this when we look at what has happened to workers’ incomes – they have risen, but they have risen unequally. Those on the Left are uncomfortable with the idea of rises in workers incomes as it seems to suggest everything is just going swimmingly for capital, and perhaps the end of the possibility of struggle, as struggle is often associated with deprivation and misery. This forgets that the struggles of the 60s and 70s, struggles that were a high water mark for the class, happened in conditions of relative prosperity. Secondly the critique of capitalism is often a critique of the distribution of wealth (though this can be a form of Lassallianism which doesn’t actually challenge the forms of capitalist wealth – value and capital itself)(Postone 1993). Inequalities of wealth are a fundamental part of capitalism – and inequality has certainly grown in Australia. But the core drive of capital is not the accumulation of wealth but the accumulation of value. It is entirely possible given certain conditions for capital’s exploitation of labour to increase at the very same time wages increase. That is the rate of surplus value can increase even as wages increase as long as there is an even great growth in productivity(Marx 1990, 326). To be necessarily pedantic though we must always remember that for capitalism in practice what matters is not the rate of surplus-value but the rate of profit, for both each capitalist firm and capital on a whole.

This is certainly the case in Australia where productivity growth has outstripped growth in wages – this is expressed in the language of capital as ‘falling real unit labour costs’, and these cost have certainly fallen (Shomos, Turner, and Will 2013, 43). We can see this dramatically below in a graph compiled in 2006:

graph 2(Australian Bureau of Statistics 2006)

It is no surprise then that the wages share, that is the percentage of GDP that goes to workers, has also plummeted.

graph 3

(Mitchell and Muysken, 7)

In more recent years though the worry of capital (reflecting the longer concern over a declining supply of labour-power) has been that both productivity growth is declining and wages rising: that the last 30 years economic changes have stalled. We can expect this to continue to be a major frontline of capital’s offensive.

But this is crucial: incomes for all workers have grown, and that household income has grown. Over a twenty year period ‘individual labour earnings have increased by around 38% on average, while ‘equivalised’ final household incomes (which additionally includes direct government payments, the provisions of government funded services (indirect transfers) and taxes, and takes into account household size and composition) increased by 64%’(Greenville, Pobke, and Rogers 2013, 4).  The three elements that have led to this increase is the increase in the number of people in a household in paid employment (56% in 1998-89 to 60% in 2009), longer working hours for part-time workers (  by ‘around 16%, from 17.6 hours in 1998-99 to around 20.4 hours in 2009-10) and an increase in real wages (‘ between 1998-99 and 2009-10 real hourly wages increased by 22.7 per cent for full –time workers and 8.1% per cent for part-time workers) (5).

There are here a number of important implications.  It seems far more common these days for young people to continue to live at home even whilst working and studying (something not helped by the high cost of housing). Australian capitalist society is still organised around the home as if not the only but a major site of social reproduction, of ‘house-work’. Women remain the primary providers of this unfree ‘free’ labour.  Part of the reason we have for the experience of an absence of free time is the contracted time that we have to perform this second shift – partly explaining and facilitated by the growth of the service industry. More people in a household are working – and the nature of life in this household becomes contracted and intensified.

But there are differences in growth in hourly wage between full-time and part-time workers and of course full-time workers most often work more hours (even though everyone knows one part-time worker who does some ridiculous amount of shifts). These phenomena start to explain the growth of inequality amongst workers – let alone those who are unemployed who have been left far behind. Also the growth of wages has been greater (proportionately) at the higher paid ends of the workforce.

Looking at the work of the Productivity Commission – drawing on the stats of the ABS we can see two major phenomena. The difference in income growth between full and part-time workers is a major source of inequality – and there is a great inequality of wages amongst full-time workers. Incomes at the ‘top’ of the spectrum have grown more quickly. The broad effect can be seen below

graph

(Greenville, Pobke, and Rogers 2013).

I think it is safe to assume as well that the increased inequality in the class roughly maps onto internal divisions build around ethnicity, racism, gender and the like.

Now of course this raises a knotty problem – the question of the middle class. There is a wealth of radical literature out there attempting to understand what the middle class is and who it covers.   I am unsure of the utility of much of the commentary.  On one hand the classic definition of the middle-class as the petty-bourgeoisie has some validity to describe those who own small pieces of capital. But does this really describe those who run the multitude of small shops, bars, cafes and restaurants and the like (to think of the service industry)? Do they really ‘own’ capital or do they just borrow it from banks which are repositories of society’s capital and thus function more as self employed managers of capital rather than its owners – with much the profits generated in their places of business syphoned off elsewhere whilst paying themselves a wage out of the money they borrow?  What about the middle class as a layer of technicians and skilled white collar workers? I think it makes more sense to understand all those with nothing but their labour power to sell as workers– and then grasp the vast differences in conditions amongst us. Conditions not only in pay but also in the nature of our experiences of work and related social status. In this sense I think it is entirely useful to talk of the middle class as a subjectivity that certain workers have (I am indebted to my friend Tanya for explaining this to me). Marx’s categories may be a very good way of explaining and understanding the structure and divisions within our society – but they are not how people themselves understand their own experiences.

This I think comes to the political kernel of this short meditation on incomes, composition and inequality. The high work, high wage/credit, high consumption deal is also wedded to a composition of labour built around great internal inequality. This is not a reason to be pessimistic in and of itself. It is just a question of understanding the terrain. I think if we were to look further at say the divisions amongst workers over things like home ownership, savings, investments etc., we would probably find an even starker gradient of inequalities.

Of course if we step back we can say that all workers have shared interested in the struggle for their conditions right now and pushing to construct communism ( and thus freeing ourselves of being workers). But we have to grasp that way that we actually live our lives on a day to day basis, and how this shapes our thoughts, places blockages in our way. The challenge will be forming relationships of solidarity amongst all workers that can account for these inequalities. Especially if as it now seems the boom is ending and credit – capital’s anti-gravitational device – might have to contract. We can’t simple hope that worsening economic times will automatically lead to increased solidarity – it might exacerbate divisions even further. The election of the Liberal National Coalition in September (it is going to happen) will see an assault on those sections of the class that remain militant and organised – especially workers in the building industry. Skilled blue collar workers in state own industries that could be profitably privatised will also be some of the first targets. These may very well be litmus tests of the tension between solidarity and inequality.

Abhayaratna, Joanna, and Ralph Lattimore. 2006. Workforce Participation Rates — How Does  Australia Compare? . Canberra: Productivity Commission Staff Working Paper.

Australian Bureau of Statistics. 2013. 5206.0 – Australian National Accounts: National Income, Expenditure and Product, Jun 2006  2006 [cited 11th May 2013]. Available from http://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/5206.0Feature Article1Jun 2006?opendocument&tabname=Summary&prodno=5206.0&issue=Jun 2006&num=&view=.

Australian Bureau of Statistics. 2011. 6105.0 – Australian Labour Market Statistics, Oct 2011  2011 [cited 10th May 2011]. Available from http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/6105.0Feature+Article1Oct 2011.

Australian Bureau of Statistics. 2013. 4125.0 – Gender Indicators, Australia, Jan 2012  2012 [cited 9th May 2013]. Available from http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by+Subject/4125.0~Jan+2012~Main+Features~Labour+force~1110.

Australian Bureau of Statistics. 2013. 6202.0 – Labour Force, Australia, Apr 2013  2013 [cited 9th May 2013]. Available from http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0?opendocument.

Bita, Natasha. 2013. Why Australia needs you to keep working  2013 [cited 10th May 2013]. Available from http://www.couriermail.com.au/money/money-matters/why-australia-needs-you-to-keep-working/story-fn3hskur-1226638889242.

Caffentzis, George. 2013. In Letters of Blood and Fire: Work, Machines and the Crisis of Capitalism. Oakland, CA: PM Press.

Connolly, Ellis, Kathryn Davis, and Gareth Spence. 2012. Trends in Labour Supply  2011 [cited 9th May 2013 2012]. Available from http://www.rba.gov.au/publications/bulletin/2011/jun/bu-0611-1a.html.

Fear, Josh, and Rich Denniss. 2011. Something for Nothing: Unpaid overtime in Australia  2009 [cited 30th July 2011]. Available from https://http://www.tai.org.au/index.php?q=node%2F19&pubid=702&act=display.

Greenville, Jared, Clinton Pobke, and Nikki Rogers. 2013. Trends in the Distribution of Income in Australia. Canberra: Productivity Commission Staff Working Paper.

Hardt, Michael, and Antonio Negri. 2004. Multitude: War and Democracy in The Age of Empire. New York: The Penguin Press.

Hardt, Michael, and Antonio Negri. 2009. Commonwealth. Cambridge, Massachusetts: The Belknap Press of Harvard University Press.

Marx, Karl. 1990. Capital: A Critique of Political Economy. Translated by Ben Fowkes. Vol. 1. London: Penguin Classics.

Mitchell, Bill, and Joan Muysken. 2011. The myth of employment enhancing flexible labour markets  [cited 11th May 2011]. Available from http://ces.anu.edu.au/sites/ces.anu.edu.au/files/2011/Muysken PPT.pdf.

Postone, Moishe. 1993. Time Labour and Social Domination: A reinterpretation of Marx’s critical theory. Cambridge: University of Cambridge Press.

Prashad, Vijay. 2012. The poorer nations : a possible history of the Global South London,  Brooklyn, NY: Verso.

Shomos, Anthony, Erin Turner, and Lou Will. 2013. Forms of Work in Australia. Canberra: Productivity Commission Staff Working Paper.

Sorrentino, Constance. 1983. International comparisons of labor force participation, 1960-81 Monthly Labor Review Online. 106 (2), http://www.bls.gov/opub/mlr/1983/02/art3full.pdf.

Virno, Paolo. 2004. A Grammar of The Multitude. Los Angeles, CA & New York,NY: Semiotext(e).

Advertisements

10 thoughts on “Incomes, Inequality and Class Composition – ( still a bit drafty)

  1. Dave, you say: ‘In order for there to be an average rate of profit throughout the capitalist system, branches of industry that employ very little labour but a lot of machinery must be able to have the right to call on the pool of value that high-labour, low-tech branches create. If there were no such branches or no such right, then the average rate of profit would be so low in the high-tech, low labor industries that all investment would stop and the system would terminate’(Caffentzis 2013, 79). If this is true this would mean that the ‘patch-work’ or ‘two-speed’ economy of Australia is just as much about where profits are realised as it is about where they are generated.’

    Why? If the capital intensive industries are selling their commodities at their prices of production there would be no problem from those industries’ point of view, would there? In fact I thought Marx argued that it was labour intensive industries like agriculture in his time which could grab extra surplus value, based on alien forces like the monopoly that is landed property. Those alien forces seem to be finding expression in a capital intensive industry mining; hence the debate about super profits.

    1. Hi John for any industry to be selling commodities at their price of production ( rather than their value) this means that they are already accumulating in relation to capital invested rather than labour exploited and are thus sucking up surplus produced ‘elsewhere’ – price of production being c+v+ average rate of profit rather than c+v+s
      cheers
      Dave

  2. Pingback: Roads to Nowhere – Capital’s Plan A | With Sober Senses

  3. Pingback: #BUSTTHEBUDGET? Conjuncture, strategy and a wager on new possibilities | The Word From Struggle Street

  4. Pingback: Building the Infrastructure State: Plans, Anti-Politics and Sullen Refusal | With Sober Senses

  5. Pingback: Dancing in the Dark: social strikes and directional demands, some comments on a debate. | The Word From Struggle Street

  6. Pingback: #TURC The law as the disorganiser of labour | The Word From Struggle Street

  7. Pingback: The Institute of Public Affairs really isn’t the problem… – The Word From Struggle Street

  8. Pingback: On Budget Eve: Deflation & The Limits to Privatised Keynesianism | With Sober Senses

  9. Pingback: Skint Part 1: Wages and Productivity – With Sober Senses

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s