The last temptation of the knifed

Employers long insisted there was no money for pay rises, that remote working was unfeasible, and flexible conditions could only ever be a hard-earned privilege. Think twice about their current claims

So, it turns out that employers do have money in the kitty to pay their employees more, especially if they have in-demand skill sets. And now they’ve looked into it, many employers have also discovered there’s no real reason that staff need to spend substantial time and money commuting into a central workplace five days a week.

In fact, it turns out that in many cases they don’t have to work five days a week at all – a four-day week will be perfectly sufficient. Also, it’s become apparent that even lower-level employees can be allowed some leeway to structure their work commitments around their personal responsibilities rather than vice versa. Speaking of those at the non-pointy end of the org chart, it has also been revealed that they don’t need to be incentivised to perform by managers who “get results” by screaming abuse at their long-suffering subordinates.

Like a remorseful wife-beater, employers have collectively had a moment of clarity, recognised the error of their ways, and are now absolutely, definitely, unquestionably going to straighten up and fly right.  

How Labour overplayed its hand

Around the turn of the 20th century, left-of-centre political parties dedicated to representing the interests of the working class began to emerge. If that wasn’t enough to put a chill up the spine of captains of industry, in 1917 the Bolsheviks seized power in Russia. Once the Great Depression hit, the more sensible ruling-class types – the blue-blooded FDR being the most obvious example – recognised that if the lower orders weren’t swept a few more crumbs from the table, there was a good chance they would start grabbing at pitchforks and possibly even seizing the means of production.

In the post-WWII boom years, pretty much everybody in the West, and some people in the East, got a lot richer. Sure, there was still conflict between Labour and Capital. But, despite occasional performative protestations to the contrary, neither side really saw it as a no-holds-barred, zero-sum contest. After all, the pie was growing at an unprecedentedly rapid rate. Even if you were only getting around half of it, there was still plenty to go around whether you were on the Labour or Capital side of the dinner table.

The regrettable thing about political movements is that, once they get a head of steam, they almost inevitably end up running off the rails. By the mid-1970s, most working people in Western nations enjoyed a lifestyle their children and especially their grandchildren would only be able to dream about. A few prescient exceptions aside, did the leaders of the industrial and political wings of the Labour movement then stop to ask themselves the following questions:

*Is it sensible to keep pushing for wage rises in an environment where inflation and unemployment are skyrocketing?

*Will we provoke a savage backlash if we keep inconveniencing the public with constant and seemingly interminable gravedigger/rubbish collector/public transport worker/truck driver/teacher/baggage handler/air traffic controller/miner/postal worker strikes?

*If auto workers in countries such as the US, UK and Australia keep pressing for ever more lavish conditions, might not they be rendering American, British and Australian vehicles ever more uncompetitive? And if consumers stop buying American, British and Australian cars, what will that mean for American, British and Australian auto workers?

*If a critical mass of voters come to believe that labour leaders are driving the economy into a ditch and thus weakening the nation, will they want to vote for a right-wing strongman, or strongwoman, to take on the union bosses and get the country heading in the right direction again?

Did they, fuck!

How Capital overplayed its hand

Even younger readers are probably familiar with what happened next. After the election of Thatcher in 1979, Reagan in 1980, Hawke in 1983 and Mulroney and Lange in 1984, the Keynesian settlement was supplanted by neoliberal globalisation.

Free-trade agreements were signed, tariffs abolished and borders made more porous, allowing corporations to engage in labour arbitrage. (That is, outsourcing well-paid jobs, especially in sectors such as manufacturing, from high-wage Western nations to low-wage Asian ones while simultaneously importing lots of non-bolshie immigrants from developing nations to undercut the bargaining power of ‘entitled’ American, British, Canadian, Australian, Kiwi and – to a lesser extent – European employees.) Unions were busted, public-owned enterprises sold off, government spending slashed, welfare states trimmed, industries deregulated and economies financialised.

Given the odium neoliberalism now attracts, it’s worth noting this anti-Labour counter-revolution wasn’t all bad, especially early on. It broke the back of stagflation. It turned around the sense of malaise gripping even traditionally optimistic, younger nations such as the US, Canada, Australia and New Zealand by the late 1970s/early 1980s. It unleashed an enormous amount of entrepreneurial energy. And it resulted in consumers having access to a much wider variety of affordable, high-quality goods from across the globe.

But, as noted, political movements can rarely stop short of overcorrection. A few prescient exceptions aside, did any right-wing politicians, think-tankers, corporate donors or economic commentators stop to ask themselves the following questions in the early years of the new Millennium:

*Do we need to pay C-suite types 300 times more than the average worker, rather than the traditional 30X, just to incentivise them? If so, why is it that a CEO will only give 100 per cent if they are earning, say, $7.5 million a year but the little people will happily undertake far more tedious roles for $7.50 an hour?

*If we keep lowering tax rates on plutocrats and big companies, and don’t even insist they pay the (much reduced) tax bill they are supposed to pay, might not ordinary workers – who are still having to hand over around a third of their earnings – grow resentful?

*Could there be a reason, other than simple-minded racism, that most working-class and many middle-class people might object to unprecedentedly large waves of illegal and legal immigrants arriving in their country? Is it remotely conceivable that these deplorable nativists haven’t been entirely convinced by the claims of their social betters that migrants don’t put downward pressure on wages, don’t put increased pressure on social services and infrastructure, and don’t make it even harder to get a foot on the property ladder?   

*If we make it much harder for Generations X, Y and Z to accumulate capital, might they sour on capitalism? If so, will simply pointing to the horrors of the former Soviet Union, which collapsed before many of them were born, be sufficient to inoculate them from the siren song of socialism?

*If the powers-that-be make it unambiguously clear that the game is rigged by, say, deregulating the financial sector then allowing reckless financial institutions to socialise their losses and keep paying their staff eye-watering salaries and bonuses while millions of ordinary people are losing their jobs and homes, might not we provoke a savage populist backlash that could manifest in all kinds of unfortunate ways?

Did they, fuck!     

The Great Labour-Capital reset  

To summarise, the wind was at the back of Labour for the half-century from 1930-1980. I suspect future historians will nominate 2016 (the year of Brexit and Trump) as the end of the neoliberal globalisation era that so benefitted Capital.

(Of course, there were clear warning signs the times were a-changing well before that. After all, a ‘change candidate’ who at least campaigned on the promise of “spreading the wealth around” was elected in the 2008 US presidential election. And when it turned out the wealth was going to continue to be transferred upwards, both the Tea Partiers on the Right and the Occupy Wall Streeters on the Left objected.)

But enough economic history, back to the question of what the labouring classes in first-world nations should do going forward.

First, they should recognise the goal posts have shifted. For the first time in a long time, Labour rather than Capital has the whip hand. Neoliberalism has run its course and deglobalisation is gathering pace. Even the parties of Reagan and Thatcher are now imposing tariffs, promising to stop illegal migration and limit legal migration, talking a big game on reshoring, rethinking their anti-union animus, and marketing themselves as the pro-worker representatives of those who aren’t part of the hated cultural and economic elites.

And it’s not just the political pendulum swing that is putting a thumb on the scales for Labour, it’s also demographic trends.

Most of the boomers have now retired or soon will do. That’s a mixed blessing for the working-age post-Boomer generations, who will no doubt end up heavily subsidising the most fortunate generation in history for the final 20-30 years of their lives. But, on the plus side, it does mean the pool of labour is now shrinking. (Despite the claims of immigration enthusiasts, the falling unemployment rates witnessed during the pandemic era would seem to suggest labour is subject to the same laws of supply and demand as all other factors of production.)  

Across the first world, employers are now desperately urging politicians to turn the immigration spigot back on. But, for a range of practical, political and geopolitical reasons, I also suspect it’s going to be a lot harder for employers in first-world nations to import the workers they want from poorer nations in the coming years.   

That being the case, I suspect there are a lot of people currently working in the gig economy, or (re)entering the workforce, who will start being offered reasonably paid, reasonably secure, reasonably pleasant employee roles by frantic employers in the post-neoliberalism-globalisation-Brexit-Trump-pandemic era.

If you’re a gig-economy worker who wants the steady pay cheque that comes with such a role, I don’t begrudge you returning to wage slavery. But I’d recommend you never forget how ruthlessly Capital pressed home its advantage while it could. So, you might want to have a Plan B in your back pocket, just in case an economic downturn results in the tables turning once more.