Newsletter No. 27
APRIL / MAY 2005
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Older workers — the new cheap labour pool? ‘It’s wrong to think lower potential GDP just reflects falling labour force participation due to population ageing. That’s just one relatively small effect. The real driver is slowing population growth overall, given present fertility and immigration trends’ (‘Age-old problem will not go away’ Australian Financial Review 12.5.05). This comment relates to the Australian government’s talk of the need to increase workforce participation to maximise economic growth potential. It poses the problem in a remarkably similar way to prevailing economic orthodoxy around the world. The recent EU Green Paper on demographic change states ‘ageing could cause potential annual growth in GNP in Europe to fall from 2-2.25 per cent today to 1.25 per cent in 2040, with all that entails for entrepreneurship and initiative in our societies’, before going on to say it will need ‘innovation and increasing productivity’ to get people — especially women, youth & older people — into jobs. Such statements unwittingly show that the real problem — in Australia and globally — is not an ageing population and declining population growth, but the more specific one of the future of an economic mode based on exploitation of growth to feed profit. It also reveals how contradictory a commitment to environmental sustainability is when a system is predicated on an indefinitely expanding population to support an ever-expanding economy. This flies directly in the face of environmental sustainability goals that require stabilization and eventual reduction of world population; and ‘significant and rapid reduction in the energy and raw-material content of every unit of production’ if a projected 8-10 billion people are to have no greater impact than the 1.5 billion who currently use about 80% of the world’s goods (See Our Common Future). Recent efforts to raise workforce participation rates and increase the length of the working life are not principally because of longer life expectations — increases in life expectancy are a very long term trend and most western economies have spent three decades drastically reducing expectations of a long working life, mainly by throwing men out of work in their 40s and 50s and by making the transition to work for young people longer and later. Nor in the Australian government’s case is it consistent, as it drives single mothers into the workforce, but subsidises married mothers to stay at home. The concentration of the work life of the workforce into fewer years, and having it work harder and longer while thus employed, maximizes the gains of productivity to the employer. However, the social wage costs — pensions, other benefits available over a person’s life — still draw on revenue (even when such services and infrastructure are ‘marketised’), so in a ‘rich’ country, maintaining such a high living standards for the ‘masses’, especially beyond their ‘productive’ years, cuts into surplus capital that could be otherwise invested at a higher rate of profit in a more ‘backward’ country. Also, labour’s price is ‘regulated by the expansion and contraction of the industrial reserve army and these correspond to the periodic changes of the industrial cycle’ (Capital I, 25:3, K Marx). Long term growth on one hand and a danger the industrial ‘reserve’ may move beyond employability hastens the need to pull extra layers of the workforce into contention as alternative, cheaper sources of labour. This includes removing any safety nets these reserves may exist on, a trend most obvious in ‘free market’ US, where older people are being driven back into work at lower wages, competing with and under-cutting ‘prime’ age workers. A 2003 report,A New Organisation of Time Over Working Life, reconceptualises time and work arrangements over a ‘life-course’ proposing a ‘reduction in overall working time’ and ‘effective prolongation of working life’ by ensuring ‘people are not worn out (early) by their jobs.’ This report lays out a ‘rational’ course on how to integrate work with other life needs over a life time. It assumes a socio-economy can be organized with ‘quality of life’ rather than profit making at its core. Ironically, its release coincided with European employer interests launching wide ranging offensives against a hundred years of social gains by labour. Interestingly, a critique of the obvious flaw in ‘growth’ theory comes from a right-libertarian US think tank promoting high performance communities. It argues “growth" is not always desirable or possible, so we must reconfigure what we mean by economic development to ‘liberate it from the straitjacket of strict reliance on growth, particularly (of) jobs or population’. Success in economic development is by ‘expanding choices, increasing wealth and creating hope for people and communities’. A ‘high performance community’ is ‘a place where things work’ in public, private and civic sectors, voluntary associations are strong and ‘government responds to and values citizen involvement’. In other words an economy is for people, not the other way round. |