Information Digest – February 2024

Jobs, Strikes, Wages. All these things connect. Recent research and information on the inflation scare used to bash workers, why it is a scam, and what to do. 

Also the Job Guarantee, green jobs, Artificial intelligence (another scare). Unions are resisting and winning some of the battles. A look at a great review of many aspects of our Federal Government after 18 months in the Journal of Australian Political Economy.


Real Wages Collapse across Europe due to Inflation Shock

Thilo Janssen, Malte Lübke

With real wages falling by 4.0 % in 2022, workers in the European Union suffered an unprecedented loss in purchasing power. The reason for this was the rapid increase in consumer prices, behind which nominal wage growth fell significantly. Meanwhile, inflation is no longer driven by energy import prices, but by domestic factors. The increased profit margins of companies are a major reason for persistent inflation. In this difficult environment, the trade unions are faced with the challenge of securing real wages – and companies have the responsibility of making their contribution to returning to the path of political stability by reducing excess profits
Unprecedented loss

From the perspective of European workers and their families, the inflation crisis is a disaster. Overall nominal wages still increased by 4.8 percent on average in 2022 and seemed to continue their recovery after the pandemic. But with consumer prices peaking at 11.5 percent in the EU-27 in October 2022, nothing was left of any recovery gains. On the contrary. Due to the inflation shock, workers lost an astonishing amount of purchasing power last year: real wages plunged by 4.0 per cent on average in the EU—an unprecedented loss.

Particularly hard hit were workers in Estonia (9.3 per cent), Greece (8.2 per cent) and the Czech Republic (8.1 per cent). But even in Germany (4.1 per cent) losses were beyond average. Inflation is exacerbating the social divide in the EU, between regions and within EU countries. It could increase absolute poverty by up to 5 per cent.

When prices rise as suddenly and radically as they did last year, workers are in a particularly bad position: consumers have no choice but to pay the prices asked for food and other essential products, while trade unions cannot just renegotiate the price of labour from one day to the next. When negotiated wage growth—counting only wages based directly on a collective agreement—reached 2.8 per cent in the last two quarters of 2022, it did not accelerate inflation at all.

Read the report here.

Read the article here.

2023 In Review: Big Strikes, Bigger Gains

Sonali Kolhatkar Jenny Brown

Strikes and threats of strikes extracted contracts ranging from good to excellent from employers across the country this year. Half a million U.S. workers walked out—machinists, teachers, baristas, nurses, hotel housekeepers, and auto workers—with much of the motion coming from unions led by reformers.

Read the full article here.

The shadow of austerity—and authoritarianism

Esther Lynch

The shock victory of Geert Wilders in the recent Dutch elections has been spoken of in Brussels as if a natural disaster. Some politicians have been clutching their pearls, in complete detachment from its social determinants. But the rise of the far right across Europe is a direct consequence of political decisions taken at European Union level.

The austerity imposed following the financial crisis of 2008 created a ‘doom loop’ of enhanced mistrust in the political system and more extreme voting behaviour, according to recent research. It finds that the far right is the main beneficiary of ‘fiscal consolidation’—a trend whose impact is heightened by a fall in turnout.

The EU’s response to the pandemic showed what was possible when the political will exists. The suspension of the fiscal rules ensured, through investments which saved jobs and companies, that a health crisis did not become a long-lasting economic malaise. We need to build on the Next Generation EU programme, which was an economic and political success, by making the investments required to ensure European companies are at the cutting edge of the green and digital revolutions.

Public investment must be protected by a golden rule, which provides fiscal space for the spending necessary to meet the EU’s own targets under the Green Deal and the European Pillar of Social Rights. Where they are necessary, debt and deficit adjustments need to be made in a sustainable way that does not sacrifice all other economic, social and environmental aims.

Read the full article here.

Labor in Government: A special issue of JAPE

Frank Stilwell

The midpoint of the current federal Labor government’s term of office is a good time to take stock and assess its performance. What has it done in each of the major policy areas? What has not yet been done but needs to be done? What are the possibilities and prospects? More generally, what does the recent experience of Labor in government indicate about the role of the state and policies for reform within modern Australian capitalism?

This special theme issue of the Journal of Australian Political Economy (JAPE) contains 19 articles that address these concerns.

Find articles here.

Read the full article here.

‘Building back better’ needs green construction

John Hurley

Construction is at the heart of much of the energy transition—in building renewable power plants and related infrastructure and in retrofitting the third or more of Europe’s housing stock that is over half a century old. Labour will be required to improve insulation in the housing stock and to convert heating and cooling systems based on gas or oil to more efficient systems, based on heat-pump or photovoltaic technologies running on electricity. It will also be needed to install electric charging infrastructure, develop new power-generation capacity and extend that of the electricity grid.

Labour shortages are widespread in construction. This is not due to lack of demand but rather to the ageing and non-renewal of the workforce. The sector has been slow to recover from the pandemic and the lifting of restrictions has revealed many former construction workers now employed in other sectors offering better working conditions.

Retraining and reskilling
There may not be enough tradespersons with the specific competences required by the green transition—including plumbers, heating engineers and heat-pump installers. The European Centre for the Development of Vocational Training (Cedefop) estimates that by 2030 the sector would need to provide training for an additional 3-4 million workers to meet the goals of the European Green Deal.

Read the full article here.

Time for a job guarantee in Europe?

Rania Antonopoulos

One of the areas of EU policy failure is long-term unemployment. Over the past decade, the share of the unemployed who have been out of work for more than 12 months has been in the region of 40-55 per cent. The misguided policies pursued during the eurozone crisis led 14 million EU28 citizens into long-term unemployment. Despite the recovery, the extensive efforts and the effective policy interventions now in place, still millions suffer this fate. The private sector is simply unable to generate a sufficient number of jobs for all individuals seeking them: there is no known mechanism in ‘free market’ societies for the demand for labour to match its supply.

Amid the severe depression in Greece in 2013-14, with a 25 per cent drop in gross domestic product and unemployment hitting 27 per cent, Levy Institute colleagues and myself, in collaboration with the General Confederation of Trade Unions of Greece, estimated the impacts on the country of a modest direct job-creation programme, along the lines of a job guarantee. We found significant multiplier effects in output and employment: for every 250 jobs directly created, an additional 100 (mainly skilled) would be created by the private sector elsewhere. As a result, our simulations showed that 59 per cent of the public expenditure required would be recouped through higher tax revenues (income taxes, social-security contributions and value-added tax).

Read the full article here.

Green jobs: from challenge to opportunity

Sara Matthieu

Greening our economies offers a unique opportunity to improve job quality in Europe. Justice for workers should be at the core.

Greening our economies and industries will affect the labour market dramatically. While some jobs will disappear, others will undergo transformation and many new ones will be created.

The lion’s share of the job-creation potential is connected to sustainable activities, such as renewable-energy production, housing renovation, repair, reuse, zero-emission transport and organic farming. These ‘green’ jobs are often more labour-intensive than the activities they replace.

The circular economy can become a major source of local job creation: think of sectors such as repair, refurbishment or recycling facilities. Such anchored green jobs will be difficult to offshore.

A green job, however, goes beyond the concept of a job that contributes to preserving or restoring the environment. Jobs in healthcare, education and childcare should be considered green jobs too, as they will be key to sustaining the rest of the economy on its greening pathway. Moreover, these jobs are indispensable in the light of possible new health threats related to climate change. From this perspective, almost all jobs in all sectors have the potential to be a green job.

How to make all this happen? It will require four elements:
ambitious and timely legislation,
proper funding for a just transition,
strong social conditionality linked to all kinds of public funding
a skilling agenda shaped together with the trade unions.

Read the article here.
The full report by Sara Matthieu is here.

Worldwide strikes, protests—making Amazon pay

Oliver Roethig

The monopoly online retailer has extracted vast rents from workers and citizens who raise their voices globally today.

On Black Friday, three years ago, Amazon warehouse workers and their progressive allies co-ordinated a global protest for the first time in the company’s history, under the banner ‘Make Amazon Pay’. During the pandemic, Amazon—its founder, Jeff Bezos, the richest person in the world—had forced workers to be at the warehouses without protective equipment. But on Black Friday they pushed back with strikes and actions in 15 countries to demand safety and dignity.

Today, Amazon workers in Germany, the United Kingdom, Spain, Italy and the United States are making their demand to Make Amazon Pay even louder, with a new wave of strikes. It is a display of the collective power they have built, together with supporters in their workplaces, on the streets and in parliaments.

Read the full article here.

Albanese Government can find money for infrastructure

Steven Hail

In some cases, the abandoned infrastructure projects had limited social benefits and considerable social costs; in others, they would have involved competing for materials, equipment, and skills currently in short supply, putting upward pressure on costs and the general price level. It might just be that they did not reflect the Government’s nation-building priorities. It certainly was not because the Government could not find the money.

To listen to much of the narrative, you would have been misled. Serious people in suits implied there was not enough money in the federal coffers to pay for the spending. The AFR View appeared to claim that the ability of the Government to invest depends on being able to borrow large sums at low interest rates, and that such borrowing drives interest rates up, because the government must compete for private-sector savings to pay for its plans.

This is incorrect: it is an example of a very persistent fallacy called “loanable funds theory” which was refuted by John Maynard Keynes nearly a century ago. It requires challenging, not with reference to current fiscal balance or debt to GDP ratio, but on the basis that it misrepresents how modern monetary systems work.

Read the full article here.

Psychosocial risks to workers’ well-being: Lessons from the COVID-19 pandemic

Research Report by Lise Szekér et al

During the last stages of the COVID-19 pandemic, work organisation was characterised by high levels of work intensity for at least one in three employees, meaning they were working at high speed, to tight deadlines or in their free time. This combination of challenging factors contributes to work–life interference and a deterioration in workers’ health in general.

Specific policies aimed at eradicating psychosocial risks at source are necessary and, as part of this, improving job quality can play an important role. Organisational resources such as managerial support, participation and training can help to mitigate the consequences of psychosocial risks for workers’ health. However, these resources do not entirely remove the negative consequences.

Despite no increase in levels of reporting of violence and harassment and discrimination, these issues have a greater negative impact on the health and well-being of workers compared with any other individual stressor.

Mid- to low-skilled workers tend to report higher exposure to aspects of work organisation that are detrimental to health than high-skilled workers. This is particularly evident among health workers and transport workers.

Social dialogue has an essential role to play in helping to work towards common minimum standards for psychosocial risks at EU level by specifically addressing issues such as work intensity, unsocial working hours, job insecurity, violence and harassment, and emerging risks coming from digitalisation. This is especially important as the prevalence of psychosocial risks varies across Member States, as does the implementation of measures and regulations.

Read the full article here.

Union Democracy Stands Up

Barry Eidlin

Last year the Teamsters and the UAW both won historic contract victories. Those wins were made possible by government anti-corruption efforts and, more importantly, by decades of organizing by members to make their unions more militant and democratic.

With the Big Three contracts now behind them, the new UAW leadership faces the deeper challenge of changing the culture of patronage and loyalty-first politics that gripped the union. So far, the approach has been to look outwards, building off the momentum of the Stand-Up Strike with a bold plan to organize all thirteen non-union U.S.-based automakers. This responds to the core existential threat facing the union, as union density in the auto industry has plummeted from 60% to 16% in the past four decades, even as auto employment has remained stable. But it also creates a project that can unite the union, galvanizing support among constituencies that might not have supported Fain and Members United. For the Teamsters, the next step after settling their major contract at UPS is tackling their own existential threat: Amazon. The strategy there is less public than the UAW’s approach, quietly building organizing committees in key warehouses, while also pursuing a more public campaign to get Amazon drivers properly classified as Amazon employees, not independent contractors. Perhaps even more than the UPS contract, this will be the defining test of O’Brien’s leadership.

The challenges that both the UAW and IBT now face are daunting. But they have been daunting for a long time. The difference is that there are now viable paths to taking those challenges head-on. While the media headlines may focus on Fain and O’Brien’s new militant leadership, that leadership would not be possible without decades of patient rank-and-file organizing to set the stage. Whether they succeed in putting their unions on a more permanent path towards revitalization is still uncertain, but if they do, it could finally mark a turning point for the broader labor movement after decades of decline.

Read the full article here.

AI and the Future of Work

Robert Ovetz

The 149-day-long writers Guild of America (WGA) strike by 11,500 Hollywood screenwriters is one of the most important strikes in decades because it tamed the Hollywood corporate beast. Along with the 160,000 members of SAG-AFTRA, the actors’ union still on strike after nearly three months, the writers’ strike was perhaps the largest strike explicitly directed at the threat of artificial intelligence (AI) to human workers.

The threat of AI to human labor is hardly a new concern to scholars of work and capitalism. Nearly 40 years ago, French socialist philosopher André Gorz’s book Paths to Paradise foresaw the AI apocalypse and warned of two possible outcomes. In one possible future, productivity-increasing technology like AI would neuter working-class struggle by segmenting the working class into a small number of “elite waged workers” alongside a superfluous “mass of unemployed and precarious casual workers.”

Gorz’s other possible future celebrated the abolition of work and the redistribution of wealth. This is a possibility because, Gorz wrote, “in the fully automated factory, the quantity of living labor drops towards zero, and so does purchasing power distributed as wages. Automation abolishes workers: equally, it abolishes potential buyers.” Without buyers and workers, Gorz foresaw a world in which work was abolished and replaced by democratic control over the economy and a society moving us past capitalism.

But Gorz wasn’t very optimistic about the socialist possibility. He thought the dystopian future of automated capitalism was more likely. Rising productivity would allow a small group of workers to live in comfort as the great mass of global society suffered as superfluous humans, at best able to hope for occasional, precarious waged work. Without a powerful working class able to force firms to redistribute profits, Gorz was terrified of the use of automation to abolish work.

Leaving the decisions to AI corporations will make dystopia increasingly likely, especially as it continues to be used in policing and war, making some of Hollywood’s supposedly futuristic films seem frighteningly realistic.

Read the full article here.

Tech Workers and Gig Workers Need Each Other

Cory Doctorow

Capitalists hate capitalism. Faced with a choice of retaining their workers by paying them a fair wage and treating them well, or by saddling them with noncompetes that make it impossible to work for anyone else in the same field, and obligations to repay tens of thousands of dollars for “training” if they quit, bosses will take the latter every time. Go meta, baby.

Same for competition. Faced with the choice of competing to win the most customers with the best products, or merging so that customers have nowhere else to go, even the bitterest of rivals find it remarkably easy to intermarry. Think: Facebook-Instagram. Disney-Fox. Microsoft-Activision:

Enshittification has complex underlying dynamics and a reliable procession of stages, but the effect is quite straightforward: things are enshittified when they become worse for the people who use them and the suppliers who makes them, but nevertheless, the users keep using and the suppliers keep supplying.
There are four forces that stand in the way of enshittification, and as each of these forces grows weaker, enshittification proliferates.

Doctorow sets these out and shows what is being done by workers, and what else can be done by workers, to strike back. Industry unionism, in a sense, as per the CIO of the 30s and examples earlier

Read the full article here.

It can be hard to challenge workplace discrimination but the government’s new bill should make it easier

Alysia Blackham

Alex Gutierrez was the first person to win an age discrimination case in court in the roughly 20 years the federal Age Discrimination Act 2004 has existed and his situation explains why. You can win in court but still be hugely out of pocket for your costs and your employer’s costs. Few people take the risk.

That problem will be largely eliminated under a new government bill before the federal parliament. The bill would introduce a modified “equal access” cost protection provision for discrimination claims.

The perils of costs were shown by Gutierrez’s case. In Gutierrez v MUR Shipping Australia Pty Limited, despite winning his claim of age discrimination, Gutierrez had to appeal in order to escape punishing legal costs.

Fortunately, Gutierrez had his appeal upheld; his damages were increased to $232,215, so he was no longer liable for the other side’s costs, and he had his appeal costs paid. But not every claim under the current law will be so lucky.

The Bill has been referred to the Senate Legal and Constitutional Affairs Legislation Committee; Report due 09/02/2024.

Read the article here.

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