Category Archives: Precarious Work

“Solidarity Forever”: Robots, Workers, and Profitability

Don Sutherland (March 2018)

Everyone I know with any form in the Australian union movement loves the song “Solidarity Forever”. The song includes these 2 lines:

They have taken untold millions that they never toiled to earn 

But without our brain and muscle not a single wheel can turn

What do these words mean for real working lives in our times?

This is a relevant question amid the new wave of production and other technologies, including robots and “cobots”.

The introduction of robots and other automated or semi automated machines into work processes is nearly absolutely controlled by employers. The Fair Work Act 2009 prohibits new technology like robots from being a negotiated issue in enterprise bargaining. It is wrong but it is simply unquestioned that employers should have this absolute control and that, therefore, nothing of any import can go wrong.

The second point is that the introduction of robots and other automated machines is a capital investment. There is a consequence to this that can only be fully grasped by workers and their organisations by chewing over those beloved words in “Solidarity Forever”, and understanding their 21st century economic meaning from the standpoint of workers.

Without getting too technical about it, what those words say is that all accumulated and new wealth derives from the application of human labour by workers.

Therefore, from the standpoint of workers, capital investment does not create wealth, it is a part of the total wealth that is created by workers through their labour. Specifically, it is a part of the total “profit” that is taken by the boss after paying wages and associated benefits to workers. It’s application is intended to enable employer-controlled workers produce new wealth that can be expropriated.

Commonly, workers are “taken on” to use tools and machines in factories and other work sites, to transform raw material from nature, or partially finished products, into goods for exchange and sale in the market place. Nowadays these include algorithms embedded in software or that enable the function of machines. (Most of these algorithms originate in the knowledge and thought of workers that is acquired and applied during their work process …. a separte discussion.)

Connecting the dots: robots – investment – human labour – total profit – profitability

The product (or service) must be useful but to contain money wealth it must also be “saleable”: that is, it has a use value and an exchange value intertwined within it. Out of the sale, the human labour put in leads to a total money value that is new wealth, and inside that is total profit, and also total wages. The total wages must be less than the total value that has been created by the worker. The process of work is in its essence a process of exploitation of workers by their employers.

The owners of the machines etc, and for set periods every day also of the labour potential of the workers, obsesses over whether what they have taken, the “total profit”, is enough relative to “their” investment that has been made possible in the first place by the labour of the workers they have employed.

It’s hard to think of an employer who is not obsessed with his / her profit, especially relative to the investment made, and in relationship to their competitor(s). (Unfortunately and incorrectly, the importance of profits, and profitability, is skated over or ignored even by most ”modern” labour economists.)

In dollar terms, profitability is shown by the total profit relative to the investment put into it. As an equation, profitability = total profit / capital investment.

So, what does this mean for the introduction of “robots” or “cobots “?

Robots are a capital investment by the employer, that seek to reduce labour costs and increase profits.

They are meant to make an impact on productivity: the same or more output relative to the quantity of human labour hours required to make it happen. However, in contradiction, they are also an immediate and longer term threat to profitability, the primary obsession of every employer.

With robots the labour time of fewer workers is necessary to produce the total wealth that includes the profit share and the (reduced) wages share, thus the proportion of capital investment increases relative to the input of workers, and to total profit.

For example, in one “moment”, profitability might mean total profit of 150 units divided by total capital investment of 300 units. Profitability equals 0.5. In the next “robot moment” that follows, the new capital investment increases relative to the human labour hours required (hopefully, putting aside breakdowns for the moment). So 150 units is divided by, say, 320. Profitability falls.

This is a tendency, it is not absolute. To reduce or prevent the tendency, wages and associated labour costs must be driven down no matter what the productivity.

This is why the Fair Work Act 2009 is working well for employers. It provides employers with those controls across the economic system. Thus, under 21st century capitalism, there is no logic that enables it to provide for reduced working hours in general while improving and equalizing the standard of living. To make that happen would require more universal and more powerful workers’ struggles through their unions, or in other ways.

This is a real dilemma for employers (and their champions): in 21st century capitalism (just like all capitalism before it) increasing the productivity of labour through more automated machines – robots – tends to reduce the profitability that all employers crave, and may even cause or hasten a renewed economic crisis that causes more unemployment and income security for the 90% plus.

But that’s the “logic” of a capitalist system. Production is not for social needs and values but to provide profitability and the accumulation of wealth for the minority who own and control the machines. In this system robots and “cobots” drive more insecurity.

Interim and ultimate solutions?

If you have a problem with this logic, then “it’s time” to cease the hypocrisy of singing those key words in “Solidarity Forever”.

More seriously, “solutions” like the “universal basic income” will be naïve and ultimately impractical.

Nevertheless, the real potential of automation does lie in reducing and sharing more equally productive working time.

The new leisure time that goes with that must be rooted in zero poverty and shared access to a bounty of socially and personally enriching activities. However, for that to be realised the 90 per cent, or a much bigger part of it, must take the necessary actions in support of the specific demands towards replacing with their collective selves the current owners of the machines and the systems that produce the 21st century necessities of life.

It’s worth looking at what the Corbyn and Sanders movements are coming up with in this light (and others in other parts of the world). And what the ACTU, the ALP and the Greens have to say about it. For me, that’s for another time and a good deal more reading and discussion, some of which might be found in the submissions to the current Senate Enquiry into the Future of Work.

Advertisements

https://soundcloud.com/radio-skid-row/don-sutherland-discusses-wage-theft-reports-1-december-2017.

Here On “Workers Radio”, Caroline and I discuss the latest reports of wage theft and hyper exploitation of aboriginal workers in remote Australia and meat workers in northern NSW. WE ALSO START A SERIES OF DISCUSSIONS ABOUT WAGES SUPPRESSION IN AUSTRALIA, INCLUDING NOT JUST WHATS HAPPENING BUT WHY. This discussion will continue over the coming weeks and will connect to the ACTU’s Living Wage Claim to be heard as part of the National Wage Review as it continues in 2018. Please discuss and share. Also send comments, questions and information to workersradio2017@gmail.com .

Australia’s weird new Federal Budget that advocates rapid wages growth: a quick critical note on the commentary

Here, Greg Jericho joins with other mainstream economists in agreeing with the lead analysis of Jim Stanford’s Centre for Future Work, that LNP government’s Budget expectation (requirement) for wages growth is not happening and shows no prospect of happening.

Again the usual high quality info from Greg. But this time, the analysis about why and what might be done is quite shallow, even absent.

Greg’s statistical causation focuses on underemployment. There are other deep factors at play than competing statistical tendencies.  But what establishes and further enables underemployment, and what is its connection to unemployment?

Another deep factor in keeping wages low is the Fair Work Act 2009 systemic, repressive scheme of penalties against workers who seek to exercise their SOLIDARITY power to improve their wages or to improve their job security. The Turnbull government’s only major change to Labor’s own version of this anti worker, anti solidarity wage and conditions fixing regime in the FWA is the harsher penalties against construction workers, including their extension to workers and their unions who do work in association with construction.

This is because Labor’s regime for bargaining and national wage fixing is working perfectly well for employers, not workers, as it was designed to do. This is one of the essential planks of neoliberalism, or Labor’s “neolaborism”, that is not going away … yet.

It beggars belief that this government, and arguably an alternative Labor government, will change the FWA so that workers can help solve their weird wages problem in the macro economy.

The other factor in keeping wages low is the union movement’s failure, so far, to develop a significant strategy that will genuinely restore worker’s right to strike and other forms of collective action, that will include rights to deal with international competition on wages etc., include climate change transition as a bargaining issue, and put worker solidarity back into both minimum legal rights and the development of society.

Mixed up in all of this is the “little matter” of profits. The discussion about profits, or its absence, in Australia is pathetic. Not just the volume of profit, but also what profit is, the exploitation of humans and nature upon which it depends, and profit in relation to total investment, that is the combination of investment in machines, hardware, software development, etc and the workers who bring all of that to life through their labour. We cannot understand the significance of the “wages problem” without grappling with profits and investment. Traditionally, Keynesians are not very good at that. So, we turn instead to our potential as union activists to do it properly?

Reflections on the Defeat Suffered by the TN Workers in Volkswagen – donsuth1@gmail.com – Gmail

Reflections on the Defeat Suffered by the TN Workers in Volkswagen – donsuth1@gmail.com – Gmail.

The dominant ideology in the American labour movement is one that looks for partnership and cooperation between employers and workers. They have union membership density at around 8%. The same ideology, although different in detail, pervades the Australian movement. We are now at 18%. Where are we heading? Discuss?

A reasoned debate on casualisation?! Give us a break

The Business Review Today (online) posted this today about casualisation: http://www.brw.com.au/p/leadership/workforce_casualisation_the_discussion_e6DEzUdUr5NFkzQCaEjhOJ 

This was my comment:

I cant believe how naive this is is. How unctuous. How incredibly slow to get in tune, Stephen (Koukoulas) is. Who is this “we” that needs to have a debate / a discussion. “Reasoned”? “Apolitical”? Are you serious? A debate in its “infancy”? Give us all a break! The union movement have been “discussing”, negotiating, dare I say “struggling” against employers and governments to get “causalisation” under some control for 30 years, at least. This struggle is deeply rooted in our whole history going back 200 plus years. Not so long ago, there was the ACTU commissioned report led by Brian Howe, ie “Lives on Hold”. Any chance that you Stephen, apparently an esteemed academic, might actually know about, refer to, acknowledge it. Most bosses love the way the working class is structured these days. I suspect the main reform business wants is the reduction / removal of the casual loading. If they can get away with it, most don’t pay it any way.

Workchoices – “dead, buried, cremated”? No Way!

By Don Sutherland, October 13, 2013 ©

The Workchoices Mark 2 Strategy is now forming

Australia’s employers and their organisations are determined that the new Abbott government move sooner not later to give them as close as absolute control of the employment contract and of each worker’s working day as they can get.
Straight after Australia’s September Federal election the new Abbott Liberal-National Party government declared that Australia was now “open for business”. This government came about because of big business and it exists to serve the needs of business: especially those employers that are the most powerful. This is not to suggest that the Labor governments were not pro-business, but that’s’ another discussion.
The week before last (October 9) the Australian Financial Review (AFR) co-hosted with JP Morgan and Chanticleer a business lunch (tax deductible / avoidable?) that enabled three very prominent and senior business leaders to discuss big business’ agenda for their new Abbott government. They were “eminent director David Crawford”, chairman of Lend Lease and a director of BHP, Heather Ridout, former head of the Australian Industry Group (AiG), and “Asciano chairman and BHP-Billiton director Malcolm Broomhead”. The discussion was then run next day as front page news in the Australian Financial Review (AFR).
The AFR quotes Broomhead:
“We have gone from a banana republic-type analogy to a more southern European type analogy. We now have an inflexible workforce, a high-cost workforce, an ageing population and a welfare mentality we just can’t afford.”
(Comparing Australia to a southern European type economy. Seriously. Make of that what you will.)

The chief priority of this exclusive coverage was to promote restoration of Workchoices style laws similar in general and same in intent to those established by the earlier Liberal- National Coalition government, back in 2004. Crawford’s call on Abbott to act soon and not later was linked to the broader “business community”, and specifically the Ai Group’s survey that “found that CEO’s believed that IR reform was the number one priority for the next term of government.”

However, to introduce such laws would mean that Abbott must break a very serious promise to the Australian people that he would not do so.

What is now unfolding is a scheme that would enable the Abbott government to break this direct, repeated promise made in Abbott’s long election campaign and, to minimise the fallout damage that would follow. By last Saturday the AFR reported that both Abbott and Hockey (The Treasurer) had confirmed they wanted “broader change” to Labor’s Fair Work Act like that being put forward by business, but “they are hamstrung by political promises they made before the federal election”, while Abbott was lamenting that “to change the system would be a breach of faith with voters.” Fancy that.

Abbott’s promised “Productivity Commission” review of the Fair Work Act will go ahead (as if that is good news for working people) and then any changes would be presented in the lead up to the 2016 election.

Business will continue to hammer away for a faster rate of change and every opportunity will be found and worked through with the government to make that happen. After all, the government wants to do it.

Why is this big business scheme necessary?

There are 2 main reasons.  First, has to do with Abbott’s own public caution. The depth of public opposition to Workchoices from about late 2004 through to 2007 was so strong that a social movement formed that made it possible for Labor to defeat the Howard government, including PM Howard in his own seat. Remember, after the 2004 election that Howard won, many concluded that he could not be defeated, including in the union movement itself. The “Your Rights @ Work” campaign, as the anti Workchoices campaign became known, did not originate as an ACTU, union leaders’ strategy. Rather it emerged out of the willingness in the middle and membership levels of some unions to find a way to fight back, especially in community-union solidarity groups. It is true that the ACTU did hook onto and embrace the local initiatives and draw them into a national, strongly resourced campaign strategy. Extra parliamentary political activity by masses of people was the key, although this changed after Labor’s election.

When the Abbott government makes its move to create Workchoices Mark 2 (or, “Workchoices by another name”) it is essential for success that there is least scope for such opposition to emerge and if it does so, it is fragmented, marginalised and expressed by union officials, above all not by workers themselves.

Second, the introduction of “Workchoices 2” requires that Abbott does break his clear promise: that he would not change Australia’s industrial relations laws so that Workchoices would be brought back. Workchoices was “dead, cremated, buried.”

The purpose of Abbott’s promise was to prevent Workchoices (strengthened, harsher rights for employers at work against their workers) from becoming an election issue.

To break this promise is every bit as serious as the foundation of Abbott’s long campaign against the Labor government, his attack on PM Gillard’s alleged breach of her serious “promise” in the 2010 election campaign not to introduce a carbon tax. Abbott’s campaign spooked a naïve and flaccid Labor government leadership and allowed Abbott to undermine the credibility of the Gillard government in the broader population – that Gillard and her government were dishonest and calculatingly so.

That is the last thing that Abbott wants for the Workchoices Mark 2 project.
Abbott’s allies in the employer organisations and the mainstream media, acting as champions and cheer leaders of employers as a class, are working out a way for Abbott to give them what they want in workplace and industry law and not suffer the loss of credibility that they inflicted on Gillard and Rudd Labor from 2010 – 2013. They are giving a lot of thought to strategy.

Big Business’ Key Code Words: Productivity and other “weasel words”

The introduction of Workchoices 2 will be very bad for working people. Therefore, there are key code words that deflect from the fundamental purpose of the employers’ campaign. They are “productivity”, “flexibility”, “competitiveness” and the newly emerging “cost structure”.

The laws these groups are looking for would re-establish, in the name of “productivity”, “flexibility”, “competitiveness”, the power of employers to pursue individual bargaining instead of inside of collective bargaining, especially collective bargaining in which union membership and representation is diminished or removed. They want as close as absolute control of the employment contract and working day as they can get.

This language is coded because the primary and dominant reason for existence for all employers, no matter their size and reach is profits and profitability.

However, “profits and profitability” are rarely mentioned in the “business messaging” that dominates mainstream media: for some reason the champions of business are very coy about discussing their fundamental motive in public.

We are invited to put aside that business’ reason for existence is profit-making, and that continued profit-making is dependent upon the exploitation of the workforce during their days at work, and then reinforced by pro-business taxation changes, the removal of environmental regulations that get in the way of profiteering, and so on.

Thus, the new laws would maintain and strengthen the capacity of employers, already accepted in Labor’s Fair Work Act, to breach negotiated and approved collective agreements. This is now facilitated through the Fair Work Act’s penal powers of the 21st century that make any industrial action by workers outside of the enterprise bargaining process “unprotected industrial action”.

A whole generation of younger workers, in the formative years of their working lives, facing a future of precarious work, will be constrained from learning about collective strength, solidarity behaviour and how it can be applied against the expectations, demands and formidable powers of employers to control their lives.

The employer strategy is forming. They do not wish to wait for the new Senate that starts in the middle of 2014.

Workers’ Counter Power: A New “Your Rights at Work” Type Campaign?

This is a class war in which there is a defining, central, battle of ideas, especially whether the majority will consent to or be comfortable with the powers of employers to exercise greater control over the lives of workers, starting at work. Or, on the other hand, ideas that enable the majority to challenge the logic of profit making for private gain as the primary and dominant reason for economic activity.

This battle must include the restoration of profits and profitability in union discussions, bargaining activity, dispute handling, and union education.

On the workers’ side there is, at the moment, a vacuum, as though we are locked into waiting for something more definite to unfold. So far there is no visible sign that union leaders are engaging in a discussion that might develop a social movement, how to re-build that put to sleep in 2008. There might be a discussion going on behind the scenes. It seems as though the preferred focus has been on Labor’s leadership ballot. The absence of leadership does not necessarily mean that it should not or will not happen.
What is most needed very soon is the development of a strategy for the labour movement that learns how to defy the big business agenda and its Abbott government, and to build an alternative for the majority of Australians. That strategy is best developed from the bottom up, preferably with open-minded union leaders going to their members to discuss ideas for both strategy and policy.

This should include intensified, constant, systematic worker education programs around economics and its inter-connections with politics. There is a working class economics for the twenty-first century that can strengthen the confidence of workers in pursuing their battles and building their solidarity.

We do not have to be dominated by what passes as “objective” and “expert” economic commentary in the mainstream media. We can grapple with and understand that the connection between “productivity” and profitability is the extra exploitation of workers, and that is wrong.

A strategy that entertains engagement and cooperation with the government and with big business would signal defeat. The strategy should defend what there is that is positive from the recent years but not be bogged in it either. It should build upwards from the “campaign” against precarious work that shows much promise and link simultaneously to a greening of the economy against climate change. “Open for business” means that there will be all sorts of mergers and acquisitions, relocations of capital, that will make job security thinner for thousands of workers.

The union movement’s relationship with the ALP must continue to be scrutinised, critically analysed for its limitations and its possibilities and how they interact. More independence is what most workers are looking for but, clearer independence from the ALP can still mean support when it is on the right track. It is just likely that kind of support, from a more independent stance, will be more effective any way.

Defiance is also really necessary but should not be mindless: it needs encouragement and cultivation over time and, in such form, can help to re-grow the union movement. There is a direct relationship between union membership losses and the denial of workers’ rights to industrial action after an enterprise agreement has been negotiated. Taking “unprotected industrial action” is very serious but is an act of defiance against an anti-worker law. It must be entered into carefully and thoughtfully, with as much planning as possible. But prior planning will not always be possible.

Above all, the strategy must take the union movement, and its latent potential in at least half of those who are not members, away from fragmented industrial and social actions to whole of movement mobilisation. We have done this before when it has been really necessary, it is necessary again, and we can do it again.