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| Bank profits return, but no recovery for workers |
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| Peter Jones 02 February 2010 |
 Global unemployment is predicted to increase If you happen to be on their executive payroll, it’s a safe bet you’re doing pretty well too. The average Goldman Sachs employee made $US498,000 last year. The top managers made many times more.
It wasn’t long ago that the system was on the verge of complete breakdown. Only after enormous corporate handouts and state stimulus spending – contrary to decades of neo-liberal wisdom – does the system seem to be working again. It took $US50 billion of government money to bailout General Motors alone. Government spending on this scale can’t last forever. As the International Monetary Fund’s chief economist put it:
"For the moment, the recovery is very much based on policy decisions and policy actions. The question is when does private demand come and take over. Right now it’s ok, but a year down the line, it will be a big question."
However, when these people speak of “recovery”, they’re focused on what matters most to them – a rebound in share prices and profits. But for those of us who don’t live off the wealth created by others, the situation isn’t quite so rosy.
The International Labor Organisation has estimated that in 2009 there were 212 million people worldwide who couldn’t find a job. That’s 34 million more than when the crisis began in 2007. An additional 215 million were thrown into the margins, forced to live on less than $US1.25 per day.
The number of people unemployed in Australia increased by 20 per cent over the course of 2009. And this is based on figures which count someone who works one hour a week as being “employed”.
Yet despite all the praise for “the recovery”, in the advanced economies unemployment is still rising. Three million more people are expected to become unemployed through the course of 2010.
Bosses use crises to drive down wages and generally go on the offensive. At my workplace the bosses used the “GFC” as an excuse to freeze wages and force staff to do unpaid overtime to “save jobs” at the same time as they were cutting them.
Kevin Rudd and Wayne Swan have been consistently singing the praises of “fiscal restraint” (read: cuts to social services). This is a sign of things to come. And as banks ratchet up interest rates, as electricity and gas prices increase, the minimum wage has stayed exactly where it was since October 2008.
Under capitalism, bosses treat workers just the same as they treat pieces of machinery or office equipment. For them, buying someone’s capacity to work is just an investment decision like any other.
If they think hiring more workers is going make them more money, then they’ll pay them a wage. If not, they’ll throw them onto the scrapheap of unemployment, where at best they’ll be paid a dole barely sufficient to keep them alive.
So while the global recovery remains tentative, there is a recovery in profits for the top end of town. They say the system is working again. But all across the world, millions aren’t. For these workers, life continues to get worse.
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