Economic downturn and the destruction of jobs

By Joe Montero

Reports on businesses shedding workers because of the damage caused by the shutdown is becoming more frequent. The list is growing. Some will shut their doors. Others will run at a reduced capacity. And it is going to get worse.

Most of those affected are small and medium sized businesses. It also means that the number of unemployed, and therefore, those experiencing severe financial hardship will continue to grow. The problem is much bigger than the Australian government has so far been prepared to admit.

Photo by Stefan Postles/AAP: Unemployed lines outside Centrelink are now part of the Australian scene

The government’s response should be to both provide appropriate help for small and medium sized businesses, and at the same time, ensuring that everyone has enough to get by from week to week.

For a start, JobKeeper must be continued and the temporary rise in what the unemployed getting through the lockdown made permanent.

There is another side to the big picture. Some of the biggest corporation are manipulating the situation for far less legitimate reasons. They have the monopoly power to take advantage of the current economic turbulence to their advantage.

Being as big as they are, most do not face the threat of going out of business. Just a manageable loss of some of their bottom line. They should be expected to shoulder a reasonable burden.

But they seek to use the opportunity to redraw the share of national income in their direction, primarily by increasing the exploitation of their workforce. This means increasing the pace of work by employing fewer and replacing labour with new technology.

Another side of this is, to use the difficult job market to force through a new industrial relations environment, which sets the scene for less real union involvement and a shift to more extensive use of individual contracts.

As jobs go, the number of unemployed goes up with it. Poverty in Australia rises.

Using the economic climate, they are pressuring the government to hand billions of dollars to them, to be used to pay off shareholders, instead of maintaining jobs.

This is not what Australia needs to get the economy back on its feet, out of longer running stagnation, and towards a better future.

The actions of these corporations might increase their individual bottom lines for a while. They will also further undermine the economy, damaging the hand that feeds them, and causing misery for millions.

Here are some of the corporations involved in doing this.

Qantas: More than 6,000 workers to be sacked.

Woolworths: Has announced the automation of its warehouses will eliminate about 700 jobs in Sydney and Melbourne.

News Corp: Will  cut jobs from 1,300 to 375, as it moves its community and regional newspapers to digital only.

Westfarmers: Will close many of its Target outlets. Some will be converted to the Kmart brand. In all between 1,000 and 1,300 jobs will go.

Myer: Will sack 90 from its head office.

PwC: will cut 400 jobs from its services for business.

Deloitte: Will cut 700 jobs.

KPMG: It’s 8000 workers had already agreed to a pay cut of 20 percent for 4 months since May. Now 200 are going to get the chop.

CBG Resources: Workers were told at a mass meeting earlier this month that 70 jobs at the CBG Resources’ Rasp Mine at Broken Hill would be cut.

Qantas is the biggest offender

This emerging flood of job losses of this type is wrong and should be outlawed. This is not necessary. A public policy to safeguard existing jobs and create new ones is needed.

The corporations involved are more than capable of weathering the shock. They should not be permitted to take advantage at the expense of others.

It is about the use of monopoly power to take advantage of an opportunity to cut costs at the expense of others.

If history is a good judge, these corporations will not use this cost cutting to undermine weaker competitors and extend their market share,and not to generate more economic activity and therefore future jobs.

This is an abuse of monopoly power to profiteer from the hardship of others. If government fails to act to stop this abuse, it falls on others to step in and do something about it. A strong community response is a critical part of the answer.

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