Today more than one in ten workers can’t find enough paid labour to live a decent life. And that’s only workers actively looking for a job or for more hours of employment. It doesn’t count those who have given up on finding a job, even though they want one, and survive thanks to friends, family or a measly government payment that isn’t an unemployment benefit.
In September the seasonally adjusted unemployment rate was 4.7 percent; underemployment was 6.3 percent. According to the Australian Bureau of Statistics, you’re not unemployed if you worked even an hour in the survey fortnight.
To get the Jobseeker Payment or Youth Allowance the un- and underemployed have to follow the Albanese government’s savage eligibility rules, inherited from its Liberal predecessors. If you earn more than a pitiful $75 a week, your payment starts to go down. You must follow the instructions of Workforce Australia and, if you’ve been directed to one, of an outsourced “employment services provider” agency, which profits from government funding.
That may mean applying for a certain number of jobs every “reporting period”, doing training they tell you to do, however meaningless courses about writing job applications or behaviour during an interview might be; or perform “work for the dole”, that would normally be done for much higher award wages. You have to “accept any offer of suitable paid work”, defined by the provider, whether the type of work or its location actually suits you or not.
If you’re single, without kids, the dole is currently a princely $413 a week. Certainly in Sydney, you’d be very lucky if less than half of that went on renting a room. And if you’re young, that’s unfortunate: unemployed aged 21 or younger are penalised and get less money than those over 21. Apparently young people don’t need as much shelter, food, clothing, etc. as older people.
Both the unemployment and underemployment rates are rising.
Unemployment is not a bug in capitalism, but a feature. The threat of un- and underemployment – descending into what Marx called “the industrial reserve army”—disciplines workers fearful of losing their jobs. The higher the level of unemployment, other things being equal, the less likely they are to take risks by fighting to defend or improve their pay and conditions.
The extent of the reserve army of labour changes in the course of economic cycles: lower during booms, higher in slumps.
Many central banks, like the Reserve Bank of Australia, are bumping up interest rates to slow their countries’ economies down. Their goal is not increased unemployment; that’s a side effect. Their main target is the rate of inflation. High inflation—lack of stability in the purchasing power of money—makes calculations by capitalists about their activities and especially investments more difficult. In legislation, the RBA has two goals: “price stability and the maintenance of full employment”. It says that “[t]hese two objectives usually work together”. In practice, the bank favours sacrificing jobs to keep a lid on inflation.
But today, high oil prices, due to the USA’s and Israel’s war on Iran, is the main driver of inflation. The RBA isn’t bumping up interest rates to discipline workers, although that’s a side-effect. Governor Michelle Bullock said at the end of September that “There is no wage price spiral going on in Australia. Rises in wages are not driving … cost pressures”.
In fact, it is workers who are mainly affected by inflation. Greg Jericho, in the Guardian, has illustrated how workers’ real pay has been falling since 2021, compared with the Consumer Price Index by 7 percent; compared with the more appropriate Employee Living Cost Index, by more than 12 percent.
The hostility of most union officials to leading their members in serious struggles to defend, let alone restore or improve their living standards, is mainly to blame.
In his 1972 report Poverty in Australia, Ronald Henderson, appointed by the Liberal government of Billy McMahon, calculated a poverty line, marking an “austere” standard of living below which people were in poverty. The Melbourne Institute of Economic Research frequently updates it. JobSeeker has consistently been below this line. Today that unemployment benefit is less than half the Henderson poverty line. Using 50, let alone 60 percent of median household income, common alternative international measures of poverty, the situation of people on JobSeeker is even worse.
Consequently, people on unemployment benefits are much more prone to illness and death. In 2022, the government’s own Australian Institute of Health and Welfare calculated that the death rate of people on unemployment benefits was five times higher than of those who weren’t on an unemployment, parenting or carer payment, or Disability Support Pension. The mortality rate of the unemployed fell dramatically during the COVID crisis, when Scott Morrison’s Liberal government made temporarily higher payments available, to avoid a revolt prompted by the sudden increase in unemployment by almost half to 7.5 percent.
In 1993, during the last severe recession in Australia, unemployment climbed to 10.9 percent. Recurrent economic crises are built into capitalism. Whether the next one is triggered by over-zealous action by the Reserve Bank, the collapse of the AI investment bubble or something else, the number of people living in poverty will skyrocket again, and a repeat of Morrison’s “generosity” to them, by a Labor, Liberal or One Nation government, is exceptionally unlikely.
