Jobs Jolt, Profit’s Fault

Soft cop Maharey

Poor Steve Maharey. He is the one who has to put the spin on this little experiment in workfare to pretend it really, really, isn’t. But why feel sorry for him. Even though he is probably nearing the age of concern, he has a job, he doesn’t have to live in a caravan, and he was trained at state expense. But as a Blairite social democrat, Maharey is the ‘soft cop’ who comes along after the ‘hard cop’ has failed to get the beneficiary to confess to welfare scrounging. So his job is to introduce workfare under the guise of caring social work.

The Jobs Jolt will target 55-59 year old beneficiaries whose location and skills need to be matched with the available skilled jobs, DBPs, and long-term unemployed (over 8 years). The initiative will spend $100 million in a bid to get more people into work. It includes work testing for people between 55 and 59 and benefit suspensions for people who move to remote areas where there is no suitable work. Even if they have already moved to find work, or to find cheaper accommodation, they are expected to move again to fill these jobs vacancies (unless there are Maori in tribal areas –a concession to Blairite political correctness.)

They will get personal case management from contracted private sector managers to fit them up with jobs. Government wouldn’t do it, says Maharey, unless we knew the jobs were there, and were prepared to match the people to the jobs. He says he can find jobs for about 20,000 over three years. Hullo? What jobs is he thinking of?

Jobs Jolt won’t work

Jobs Jolt cannot live up to its spin because the only skilled jobs that are available are ones that demand an expensive and recent education in IT, marketing, management etc. These are the jobs that have replaced the jobs that many of the unemployed 55-59 year-olds, DPBs and long-term unemployed lost as a result of the restructuring of the economy over the last 20 years. The time to match people to jobs was then not now. The reason it didn’t happen then, and won’t happen now, is that it was too costly to up-skill middle aged workers when young skilled workers, paying for their own education, can do the work for less cost to the boss. That’s why many bosses gave older workers the boot.

This means that the only jobs that will be found for the jolted will be menial and low paid. These are the jobs that nobody wants and can’t even be filled by new migrants who are trained as doctors and physicists. It is these new low-paid, part-time, casualised, non-unionised jobs such as in the service and tourism sectors that have caused the recent slight rise in employment. But despite the official unemployment rate dipping below 5% the real rate of people who are out of work, or working very short hours, is probably closer to 10% of the work age population.

Maharey has bitten off more than he can spin this time. The 55-59 age group is no push over. Most of them have a long record in work and many will be former members of unions. Nor are the DPBs who have resisted all of National’s attempts to force them back to work so far going to lie down. They know their rights to the DPB, to unemployment benefits, and to other benefits, and can be organised to fightback against this experiment in workfare disguised as welfare. They can be politicised by the Jobs Jolt to resist moves to workfare. But first they have to reject any responsibility for unemployment and put the blame where it really lies – on the bosses and their government.

Labourite Workfare

Workfare is the nasty neo-liberal recasting of welfare as work so that people get off benefits back into the workforce where they can compete for jobs and drive wages down and profits up. Of course National and ACT hardliners don’t admit this and claim that it is to make ‘welfare dependents’ independent. To make them self-reliant National and ACT would force beneficiaries to be ‘free’. The full-on program of National’s Katherine Rich wants people forced to work by withdrawing their benefits.

The Blairite Labour government of Helen Clark has no option but to move towards workfare. NZ has a weak, dependent semi-colonial economy that competes for foreign investment by cutting its costs to investors. To offer low tax rates it has to cut welfare spending. To offer cheap wages it has to drive them down by forcing more people onto the labour market. This is the only way that Labour’s agenda of 4% growth a year and returning the country to the top half of the OECD countries and guarantee a profitable return on foreign investment. To stay in power, Labour has to bow to the dictates of imperialism which has to suck more profits out of the country.

But unlike National or ACT Labour postures as a caring government that wants to encourage people back into meaningful skilled work on living wages. It has adopted the Blairite or ‘third way’ approach to running capitalism – a so-called middle road between neo-liberalism and socialism. Instead of openly blaming or victimising people, Blairism is about making people ‘take responsibility’ for their lives. First we offer you a derisory job subsidy, a relocation allowance, some personal training so you can ‘help yourself’. But if you reject this offer we take away your benefit! Only problem is that under today’s clapped out kiwi capitalism the best on offer for those targeted by the Jobs Jolt is cheap and menial labour. Even where retraining and relocation is subsidised by the state, this is a welfare handout to the bosses that is deducted from workers health, education and housing spending. Forcing beneficiaries into work will only increase the bosses’ welfare at the expense of workers’ misery.

Work/Life Balance ?

While we say the shorter working week is the workers’ answer to the Jobs Jolt, the government says it wants to restore a ‘balance’ to work and life. What sort of utopian horseshit is this? To have a ‘life’ under capitalism you need a job and a ‘living wage’. While spindoctor no 2 is running the Jobs Jolt exercise, spindoctor no 1, Margaret Wilson, is launching the Work-Life Balance project. Sounds positively socialistic. Maybe Maharey is finding us the jobs, and Wilson, the living wage. Or maybe they missed out the word “for” as in “work for life”. Anyway someone is saying workers should get a life. We say workers should take their life back!

The WLB seems to be a response to union complaints about the end of the weekend and long hours without overtime pay. All work and no play puts Jack off Labour they say. So the idea is to get the CTU to make some proposals for shorter hours and more job sharing. Problem is that this initiative seems equally driven by bosses to increase flexible workhours. That is jargon for working on the bosses’ time and only getting paid for what you do. This fits in with globalisation, just-in-time production and delivery of goods and services. The prostitutes we spoke of in the last issue are no strangers to rotating and split shifts, but for most workers this is still something of a novelty. In other words the end of the weekend, and the 8 hour day, and now in the name of balancing the bottom line, the end of regular hours and regular pay.

Ever since past President of the CTU Ken Douglas said that the job of unions was to make workers more productive to attract foreign investment we know what to expect from the CTU/Government. Creating a flexible work force means that the Government gets together with the bosses to try to keep the supply of labour ‘liquid’ so that workers can move in and out of work and around the country (Jobs Jolt!) as demand for labour fluctuates in response to the market.

We say workers should get in first. As Pete Seeger sang: Take it Easy –but Take It! Demand a shorter working week on a living wage! A 30 hour week with no rotating or split shifts. That way we can all work and live. Of course the bosses’ will choke on this interference with their ‘property’ rights to hire and fire on their terms. Well, we didn’t want to work for them anyway. We can occupy the factories and workplaces and run them ourselves without paying compensation to the bosses. That way we make our necessary work serve our life needs, and not use up our life to serve the profit of the bosses

Jobs Fightback!

Enough is enough! The Jolted can lead a fightback against the Blairite spin on workfare. Don’t take responsibility for cheap labour! Demand that the bosses’ take responsibility to provide decent well paid work. Organise in your union to fight the Jobs Jolt. If you are non unionized, join a union! Low paid, unemployed and beneficiaries, join you local UNITE! [see below] fight the Jobs Jolt! No work without decent pay, re-location allowance and job training. Work for all! Share the work around! Create jobs by renationalising state assets under workers’ control. Free health, education and child care! For a 30 hour week on 40 hours pay! Rebuild the unions as democratic, militant unions! Fight for a workers’ government and for a socialist economy!.

PICKETERS OPPOSE THE JOBS JOLT

On Wednesday the 24th, 2003 around 15 beneficiaries and supporters held a picket of the Queen St branch of WINZ to protest the Clark government's 'Jobs Jolt'.

A leaflet was distributed, signatures against the Jobs Jolt were collected, and speakers, including Greens MP Keith Locke, condemned the Clark government's attacks on workers. With new figures showing that the real average wage in New Zealand has declined by 6% over the last twenty years, the Jobs Jolt picket was a reminder that an attack on unemployed workers is an attack on all workers.

The picket organisers are working inside UNITE, a union of low-paid workers and beneficiaries, to help rebuild the union movement so that it can put some strong demands on Clark's government, and fight that government when it inevitably refuses to meet those demands.

The picketers' leaflet called for state funding to create real jobs which pay real wages and are aimed at socially useful ends. The picketers also called for a shorter working week without a reduction in pay to stimulate growth in employment and improve workers' lives.

The leaflet was headed “Revolt against the Jobs Jolt” It went on to say that Government attacks on beneficiaries are also attacks on our civil rights. “The jobs jolt removes the exemption for 55-59 year olds from having to seek work. It threatens to cut benefits of beneficiaries moving to the country to escape the appalling conditions created by high rents and low benefits. It requires job seekers to undergo drug tests and drug education. It pressurizes single parents and selected groups of sickness and invalid beneficiaries. All these groups will be intensively case managed, reducing people’s rights to manage their own affairs. In some cases this will be subcontracted to private enterprise” The jobs jolt will not cut unemployment or up-skill people, rather it is beneficiary bashing and subsidizing the employers. The picketers’ demands include:

Full Employment
A living wage for all workers and beneficiaries
Freedom to live where we choose
Retain the work-test exemption for 55-59 year olds
Free Education, Training and Retraining for all
Free Childcare
A 30 hour working week on full pay.

A disappointing aspect of the picket was the failure of some socialist groups to turn up. The Anti Capitalist Alliance supported anti-Jobs Jolt action in Wellington, but did not make it to either the planning meetings or the demo in Auckland. The picketers sent a representative to an Auckland branch meeting of Socialist Worker, hoping to get that group to send members to the picket. But Socialist Worker refused any cooperation, telling the picketers' rep that the protest was 'sectarian' and a 'diversion' from the 'rates revolt' protests. In fact, small actions like this are an essential part of the vital and difficult job of rebuilding the union movement in New Zealand.

WORKERS AND BENEFICIARIES UNITE AGAINST THE JOBS JOLT!
Join your union and demand that it opposes Jobs Jolt!
Join UNITE, the union for beneficiaries and low paid workers! unite.union@clear.net.nz

To contact the UNITE beneficiaries ring Roger or Warren on (09) 6278655 or e mail Janet at dpb_action@yahoo.co.nz 
Class Struggle 52,  September-October, 2003

The Wall St Virus and the Crisis of Overproduction [September 1998]

It is obvious to most people that the world economy is in trouble. And it is not just an 'Asian' problem. Instead of the Asian 'virus' spreading across the world, it is clear that the real source of the Asian crisis is not an Asian but a Wall St. Virus. What is it? As we explain below, it is speculation based on a surplus of capital that can find no outlet in profitable production - i.e. the classic Marxist explanation of capitalist crisis, overproduction of capital!

Recently some of the most true blue bourgeois mouthpieces such as the New York Times started paying homage to Marx as "maybe" right after all! They suspect that the system has a profound flaw – an inability to regulate the monetary system and prevent a 'meltdown' similar to 1929, though they don't really know why. Increasingly, the current period is seen as following the lines of the great depression, and a new depression is all the talk. We say – we told you so! Marxism is not dead! It is capitalism that is in its death throes!

The bourgeois gurus are very confused about the causes of the current economic situation. The monetarists claim that only the US economy is healthy and that is because the market has replaced state spending as the driving force. This overlooks that the 1980's recovery under the right-wing Reagan was fuelled by massive government spending on armaments! Even Chile, the first neo-liberal 'experiment', requires foreign investors to give monetary guarantees that they will not speculate in the Chilian economy. Never mind these facts, now that the Asian miracle is over, the monetarists like Friedman call for getting the state out of business, balancing the budget, and allowing banks and firms to go broke.

Neo-liberal hypocrisy.

This neo-liberal prescription is what underlies the role played by the IMF which is imposing severe cuts on state spending, and forcing insolvent banks and bankrupt firms to go to the wall. But this policy of "slash and burn" is compromised as the Asian states are expected to pay back foreign investors instead of allowing them to go broke. The Economist – conscience of the neo-liberals - opposes this as "immoral" because it does not punish investors from making bad investments. Clearly, such rescue operations, modelled on that of Mexico a few years ago, show that the neo-liberals hypocritically preach free market for others, but demand state rescue packages for themselves!

This is not surprising. The neo-liberals are starting to panic about a world economic collapse. Prominent speculators like George Soros and and right wing gurus like John Gray, former advocates of free market forces, now call for moderation and international controls on the movement of capital. Soros now recognises that the free rule of the market generates social chaos, and ultimately a threat to his immense wealth. Gray, now claims that the free market is itself the result of a strong state, and calls for the return of a new international keynesian type economic policy capable of keeping and rogue capitalist states in line.

Into the 'third way' camp.

These former more market advocates now find themselves in the same camp as long-time social democrats like Galbraith and Robert Reich, or NGO operatives like Walden Bello, who today argue for a "third way" between capitalism and communism based on the "smart state". The smart state is not the protectionist, social democratic state of the past, but a state which is geared to international economic institutions such as a revamped IMF and World Bank capable of coordinating the world economy. Even supposedly 'socialist' commentators like Robert Slade and Frank Venuto in the New Left Review No 228, call for a 'new Bretton Woods' to regulate the international monetary system. Socialist Appeal newspaper of the former Militant tendency, also pipes up with its underconsumptionist, Keynesian analysis. [See their website http://easyweb.easynet.co.uk].

This confusion is based on a totally wrong understanding of what makes capitalism go into periodic crises. Different bourgeois schools of thought all focus upon one or other symptom of crisis without understanding its real cause. It has nothing to do with too much or too little state interference, or lack of controls on the movement of capital, or underconsumption brought on by neo-liberal policies, or the dangers of 'hot money' or speculative finance capital. These are all symptoms of crisis and not their causes. Therefore attacking one of many symptoms of crisis will not solve crisis and overcome capitalism's tendency towards chaos and destruction.

The Cause of the Current Crisis.

The cause of crisis is the overproduction of capital which cannot be invested to create sufficient surplus to return an average profit. This creates a surplus of capital which looks for some other means of getting a return. Speculation in commodities or exchange rates becomes the usual outlet. Attempts by the state to attempt to offset this diversion of capital from productive investment, by means of state investment and state spending, must fail. They do not overcome the root problem of overproduction of capital. Value becomes devalued by inflation and profits fall further. Similarly, attempts to regulate capital movements, or outlaw speculation, may slow down the worst effects of excess capital, but do not prevent its ultimate destruction. Calls for a new "Bretton Woods" are misplaced because such an international agreement will not hold in the free-for-all of dog-eat-dog rivalry among the imperialist powers to re-partition the world market.

Crises therefore are the normal means by which an excess of capital is devalued (destroyed) so that the remaining capital can be re-invested at a profit. Devaluation takes two forms; (1) devaluation of constant capital – i.e. firms go bankrupt, old technology is written off, and the stronger, more competitive firms stay in business with lower fixed costs and new technolgy; (2) devaluation of variable capital – i.e. lowering of the wage bill by destruction of jobs and real wage cuts. What makes this process a normal and natural part of capitalism?

The answer is the law of value. Capitalism runs on the ex-traction of value from the labour-time of productive workers. This is because labour-power is the active ingredient which creates value out of the raw materials of nature. Capitalists own the means of production and so can force workers who do not, to work for a longer period than is necessary to pay for their wage. Workers produce enough value for the capitalist to pay them enough to buy the commodities necessary to reproduce their labour-power. Over and above that necessary labour-time, workers work for a surplus period of time in which they produce surplus-value which is the basis of capitalist profits. The ratio of necessary value to surplus value is the rate of exploitation.

However, in order to increase their surplus-value and profits in competition with other capitalists, each employer must drive up the rate of exploitation by introducing new machines or techniques to increase the productivity of labour. This means more an more capital is invested in machines which do not increase value, compared with labour-power which does produce value. When employers can no longer increase the rate of exploitation fast enough to get a return on their increased investment, the rate of profit begins to fall. Capitalists look for new outlets to increase their profits.

Typically, the search for new investment opportunities has been to export capital to countries with lower wages and lower technology costs, or to take advantage of access to markets. This 'foreign investment' of capital from the imperialist countries to the 'developing countries' which began late last century is now expressed by the term 'globalisation' to mean the movement of capital throughout the globe looking for cheaper costs of production and access to markets.

Capital Speculation.

Today, however, such is the excess capital searching for profits, demanding the right to move in and out of countries at will, this means that the international economy is inherently unstable. This instability is expressed at the centre of the global economy, Wall St. where capital values cannot escape the axe of the law of value. Despite the 1980's devaluation of US industry and cuts in jobs and wages, US business cannot return sufficient profits to the excess capital accumuated in banks and other institutions.

In the 1980's excess capital has flooded out of the US and Japan into East and South-East Asia where profit rates were much higher. However, even these dynamic, youthful capitalist economies were not immune to falling profits. Therefore, the so-called 'Asian crisis' was not caused by heavy handed state intervention, bad banks, cronyism, or corruption, but by falling profits. The collapse of these economies resulted from the flight of speculative capital out of Asia. And because there are not yet sufficient outlets for excess capital in the former Soviet Union or China, excess capital is driving up US stock and share values beyond the real value of US business where profits and returns to shareholders are falling. In Japan, the long-delayed restructuring of capital is about to see a massive destruction of constant and variable capital, exposing that economy to the entry of rival US capital.

So the Wall St. virus which is in danger of spreading round the world can be seen as a delilberate policy by the US state to transfer its own imperialist crisis onto weaker countries in the world economy. This is why the US wants to impose free trade and capital mobility on other states, but not itself. That's why it uses the IMF and the World Bank to impose tough conditions on foreign states to force them to pay their debts to US banks by cutting social spending programmes and forcing the cost of their crisis onto the backs of the workers and poor peasants of the 'third world", and the newly capitalist former USSR and the almost-capitalist China.

The payoff for the most powerful US capitalists is that they can buyup bankrupt semi-colonial firms, takeover banks and concentrate and centralise the forces of production into their hands at the expense of semi-colonial capitalism and the mass of the world's workers and poor peasants. But even as they do that, they can't get over the fact that this does not get them out of crisis. To return to profitable accumulation, the strongest capitals must destroy the weakest to survive.

In the process, whole countries like the former USSR and China must be turned into sources of cheap labour and super-profits. The US will not be without rivals in this struggle. Both Japan and the EU are competing for access to new investment outlets for their excess capital. But they are nowhere in the same league as the US and will both suffer from US capital inroads. The social chaos that results will threaten to explode the flimsly hold that US imperialism has on the world economy.

From Class Struggle No 23, August-September 1998

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