Wage pressure: the international strategy of financial capital

Pressure on the cost of living resulting from decades of high inflation and low real wages has emerged as a major theme of the election campaign in Australia. Both the Liberal Party and the Labor Party support, albeit in different ways, the continued deterioration in workers’ standards of living.

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

During Wednesday night’s televised leaders’ debate, Prime Minister Scott Morrison made clear he was against even a wholly inadequate call for a 5.1 per cent increase in the minimum wage. Officially, the inflation rate is already at 5.1 percent, but the actual increases in the cost of living are much higher.

The question arose when Labor leader Anthony Albanese told reporters he would “absolutely” support such a rally if that was what the Fair Work Committee decided in June. The pro-business labor court has cut or slashed wages since it was created by the last Labor government, underscoring the false character of Albanese’s statement.

Yet Morrison called her “incredibly irresponsible”. Labor spent the time leading up to the debate making it clear that it was not formally advocating such a petty increase. The party’s shadow finance minister, Jim Chalmers, told the Australian Broadcasting Corporation that his party had not made a formal decision and that one had yet to be decided.

Albanese’s main argument, made repeatedly during the campaign, is that the key to improving living standards is increased productivity. But data dating back decades belies this claim.

This week’s figures were produced by Greg Jericho, Economic Journalist guardianIt turns out that over the past two decades, productivity growth has always outpaced wage growth. In other words, if output per worker increased, most of that growth went to the employers in the form of additional profits.

This situation was made possible by the sweeping changes made to the system of labor relations by the Labour-Hook-Kating governments. Then under the provisions of the Fair Work Commission, which was introduced by the Labor Governments by Rod Gillard in cooperation with the unions, and imposed by the latter.

The outbreak of the wage issue in Australia is part of an international process. They demand that central banks, and representatives of financial capital, forcibly suppress wage increases by raising interest rates. It means imposing a recession, if necessary, a preemptive attack on workers trying to get compensation for hyperinflation.

These issues were highlighted in Thursday’s Marketplace interview with US Federal Reserve Chairman Jerome Powell. The latter states that the process of lowering inflation to 2 per cent “will involve some pain” and focuses his remarks on wages that “rise to excessively high levels incompatible with low inflation”.

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

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