Wage suppression: The international strategy of finance capital

Cost of living pressures resulting from the surge in inflation and the decline in real wages going back decades have forced themselves to the center of the Australian election campaign with both the Liberal and Labor parties, albeit in different ways, supporting the continued driving down of workers ‘ living standards.

Anthony Albanese and Scott Morrison (Composition: WSWS Media, Images: Twitter/@AlboMP, AP/Kiyoshi Ota)

In the leaders television debate on Wednesday night, Prime Minister Scott Morrison made it clear he is completely opposed to even the totally inadequate call for an increase in the minimum wage of 5.1 percent. Officially, inflation is already at 5.1 percent, but real cost of living increases are far higher.

The question emerged when Labor leader Anthony Albanese said in remarks to the press the previous day he would “absolutely” support such an increase if that is what the Fair Work Commission decides on in June. The pro-business industrial tribunal has cut or suppressed wages since its creation by the last Labor government, underscoring the bogus character of Albanese’s posturing.

Morrison nevertheless characterized the remark as “incredibly reckless.” The Labor Party spent the time preceding the debate making clear it was not formally advocating even this paltry increase. The party’s shadow treasurer Jim Chalmers told the Australian Broadcasting Corporation that Labor had made no formal decision and it was yet to be determined.

Albanian’s main pitch, repeated endlessly throughout the campaign, is that the key to rising living standards is an increase in productivity. But data going back decades gives the lie to this assertion.

Figures produced by Guardian economics journalist Greg Jericho this week show that for the past two decades productivity growth has consistently outstripped wage increases. In other words, while output per worker has increased, the vast bulk of this growth has gone to employers as additional profit.

This has been made possible by the sweeping changes to the industrial relations system initiated under the Hawke-Keating Labor governments and further developed through the provisions of the Fair Work Commission introduced by the Rudd-Gillard Labor governments, with the collaboration of the trade unions and enforced by them.

The eruption of the wages issue in Australia is part of an international process as central banks, the representatives of finance capital, demand that wage increases be forcibly suppressed through the lifting of interest rates. This means imposing a recession, if that proves necessary, in a pre-emptive strike against workers striving to obtain compensation to meet rampant inflation.

These issues were underscored in an interview conducted by Marketplace with the US Fed chair, Jerome Powell, yesterday. He said the process of getting inflation down to 2 percent would “include some pain” as he focused his remarks on wages. They were “moving up at levels that are unsustainably high and not consistent with low inflation.”

Federal Reserve Chairman Jerome Powell (AP Photo/Susan Walsh)

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