WAYNE SWAN MP
MEMBER FOR LILLEY
Good Jobs = a Good Society
Reflections on the Harvester Judgement
Tuesday, 11 DECEMBER 2018
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As the incoming president of the ALP there’s nothing better than coming to the state where Labor has been most recently – and most resoundingly – re-endorsed as the undisputed natural party of government.
The way the Morrison Government is going, you soon may not be the only one.
Because the way they’re governing, the Coalition is set for electoral defeat.
We’re living in a bizarre political climate.
Being in parliament house in the last two sitting weeks has felt a bit like being an extra in a zombie movie. The Libs and Nats are generally keeping out of sight in their offices, but occasionally you see them crawling through the corridors, on their hands and knees, bloody bandages dragging behind them, just managing to make it into the House to stave off yet another near defeat on the floor. Each time noticing there is one less among their number.
“Night of the Political Dead” – coming to a ballot box near you! Starring ScoMo as the lurching cadaver searching for a quiet grave. And Peter Dutton as…well… Peter Dutton.
We all know how hard it is to kill off zombies. They just won’t die, no matter how many times they plunge their axes into each other’s backs. So we’ve still got a big job to do in the campaign ahead, and I want to urge you to keep up the utmost pressure until the job is done.
It’s about campaigning hard, until the last polling booth closes in Western Australia on election night.
But it’s about more than that.
It’s about winning the battle of ideas.
If the Coalition is wandering around the parliament like the living dead, it’s not just because they’ve lost their discipline, it’s because their ideas have been rejected by the Australian people.
They’re a laughing stock. And not just on issues like climate change, marriage equality and the treatment of women.
It’s because their economic policies are based on the flawed concept of trickle-down economics which doesn’t work and which people don’t want.
The spotlight now turns to us.
Can we buck the trend since the Global Financial Crisis that has seen parties of the centre-left continually lose? Can we inspire people with our ideas?
As you will have noticed, internationally our movement isn’t in great condition. In Germany, in France, in Italy and in Spain, our sister parties are fighting for their very existence. In America they can’t convincingly defeat someone as obviously unsuited to high office as Donald Trump. It’s so bad that some of our sister parties – some of which have been around for nearly 150 years – may not even survive. In historical terms, it’s happened in the blink of an eye.
How did it happen? How did these once proud, mighty, multi-million-member socialist and socialdemocratic parties collapse so spectacularly?
I believe it’s largely because they lost touch with what’s been happening to the working class. And as a result, populists of the Right have swooped to steal their members. Those parties swallowed the Kool Aid of trickle-down economics. And now they’re paying the price.
We can’t let that happen here. We have to lead the debate on tearing down trickle-down economics and putting forward a strong and credible framework for equality – political, racial, gender and economic.
A little less than a fortnight ago, Dan Andrews proudly called Victorian Labor the most progressive government of the most progressive state in Australia. In doing so, he strongly praised the union movement, acknowledging its pivotal role in creating a better society.
That last bit was important. Because being progressive doesn’t just mean being on the right side of history on all the great social questions of our time. It doesn’t just mean greater legal equality. It means greater economic equality. It means a society where the working class doesn’t miss out.
Over the past few years, I’ve been using my time on the backbench to get involved in the international fight against inequality, working on international committees and in international forums alongside people like Bernie Sanders, Joseph Stiglitz and others to argue for things like:
We blithely assume our society is constantly making progress on these sorts of issues. But it’s not.
Just last week new figures from the Australian Bureau of Statistics revealed that the gaps between top and bottom income earners are widening alarmingly. Since 2003, incomes for those in the bottom 20 percent have gone up 50 percent, while incomes for those in the top 20 percent have gone up 130 percent. Young Australians are especially missing out.
When income inequality widens, social mobility declines, and those with unearned and inherited wealth benefit disproportionately – whether through plum boardroom appointments or access to bigger megaphones in the public debate. And that’s bad for our society and our democracy.
One of the people I’ve come to know well in my travels discussing these issues is the Washington Post columnist, E.J. Dionne.
I love E.J.’s work, which time and again exposes the rottenness at the heart of the Republican party and the lack of policy ambition of their Democratic opponents.
One of my favourite columns by E.J., which I re-read regularly, is one he wrote five years ago on the
50th anniversary of Martin Luther King’s great “I have a Dream” speech in the Washington Mall in 1963. We all know that speech and I’m sure many of us can recite whole paragraphs by heart.
But does anyone here know what the title of the speech was?
Its title was “Jobs and Freedom”.
Yes, JOBS and freedom.
Martin Luther King and the civil rights movement – which had its own off-shoots here in Australia – understood that without basic economic equality, legal equality, racial equality, gender equality is a fiction. Economic equality is vital if these other worthy goals are to have real meaning.
Some may say that despite the great strides made towards legal equality for people of colour in the United States since 1963, they’re still not truly free because the economic equality part of Dr King’s equation hasn’t yet been achieved. It’s an argument voiced often and with good reason by many Indigenous leaders here in Australia.
Dr King was pointing out that in order to succeed, the progressive movement has to be a broad movement. It has to include not just the progressive middle class, but also working people and their unions. It has to talk about jobs – who has them, what they pay and what conditions they come with.
Good jobs are an essential element of freedom. And therefore a central part of any socialdemocratic platform. A central part of any Labor platform.
That’s why I believe that 111 years after it was handed down by Judge H.B. Higgins – considered a radical in his time – the Harvester Judgement is more relevant and politically potent than ever.
Much of the detail of the judgement has now been superseded by progress. Things have changed since 1907. We’re wealthier, we aspire to a higher standard of living, we live longer, our patterns of work have changed, and of course women have made historic progress towards equality in the workplace.
But the central philosophical idea remains: the idea of the living wage as the basis for a decent society. A good job as the basis for personal freedom. Cooperative industrial relations as the basis for social harmony and increasing national prosperity. It still sounds needed.
One might accurately call the living wage the foundational idea of the Australian Labor Party.
And I believe strongly that in the current state of the world economy it’s an idea whose time has come again. Although we enjoy more wealth, we celebrate our diversity, we gain ground in gender equality and we enjoy more freedom than in 1963 or indeed in 1907, a renewed emphasis on the crystallising idea of the living wage may be just what we need.
I’m saying an emphasis on jobs – good jobs – and the rights of working people to gain and sustain decent, dignified employment must remain central to our political message.
And that means we must keep strong links with the trade union movement. Whatever constitutional form it takes, we’d be crazy to loosen our ties to the movement that keeps us grounded.
Unions are the most effective check on inequality that has ever been invented. I’m unapologetic about being on the side of working people and their unions – and recent history demonstrates that when parties of the centre-left move away from their base, they lose.
They adopt insipid and tame economic agendas which fail to provide a clear alternative in the key areas of inclusive growth – and this makes it easier for right-wing populists to use race and gender to divide and defeat us. That’s the big lesson for us.
Our political task is therefore to pursue a platform which combats economic and social inequality and delivers social mobility.
We need to get government, employers, and employees back to the table to seek a better way forward. It has worked in the past and it can work again.
We have to get away from the idea that the private and public sectors are somehow mutually antagonistic.
A stupid and destructive idea has come to dominate our political debates. It’s the idea that taxes and social investment are inherently anti-business. That every dollar that government raises and invests on behalf of the people somehow robs us of our vitality. That pursuing equality makes us collectively poorer.
Business thrives best in a decent society. And a decent society can’t be created through trickle-down economics alone. Smart businesspeople understand this.
We need to change the rules to ensure that our industrial relations system delivers a fairer distribution of productivity gains to working people – by recognising that the trade union movement has a legitimate and essential role in our economy and in our society.
And, most of all, we have to rid our politics of the destructive idea that government and collective action by people are somehow illegitimate. This stupid idea, endlessly advocated by right-wing ideologues, is what has brought America undone. We don’t need it.
Instead, we need to convince people once again that collective power, expressed through their unions, their communities and government, funded by means of progressive taxation, can help us solve our country’s greatest problems.
Our sustained response must raise the bargaining power of the Australian worker, build on a more progressive and growth-friendly tax system and reduce the political clout of the wealthy elite.
This is both an economic challenge and a political struggle.
To overcome this challenge we must build our policy around four key progressive pillars:
You’ve heard me critiquing corporate excess and calling for a progressive taxation system many times, so in the limited time I have I want to say a few things about two things we need to do to put jobs back alongside freedom as our central goal.
The first is to recommit to sustained full employment as the foundation of a decent and productive society.
And the second is strengthening the minimum wage and moving towards a more generous living wage.
Australia should embrace fiscal policy - that is, demand management - as the first means of eliminating spare capacity and achieving full employment.
This is not a recipe simply to expand the expenditure side of the budget. It is entirely consistent with budget repair, especially if it focuses on restoring fairness and efficiency to the tax and expenditure systems.
Australia in 2018 has a headline rate of unemployment of 5.1%, reflecting the 650,000 Australians looking for work and willing to start immediately.
These numbers conceal a huge shortfall of working hours in Australia – particularly for those in casual and insecure work. Another 1.1 million working Australians are underemployed and would happily work more hours.
Altogether, too many Australians are what economists call ‘labour market slack’ –a pool of unemployed and underemployed workers that weakens the bargaining power of labour.
Internationally and nationally there is strong advocacy for a universal jobs guarantee. I share its objective - a job for every willing worker. That’s why believe it’s important that in addition to expansionary fiscal and monetary policy, trade and industrial policies, we need active labour market and skills policies to fill opportunities.
That means more active job creation in the public and community sector and active labour market programs.
Achieving full employment is often posed as a challenge when we consider the new wave of technological change which is ushering in a fourth industrial revolution.
But in this era of economic and technological uncertainty, it’s worth remembering the reflections of one of Martin Luther King’s contemporaries, who said in 1962:
“We believe that if men have the talent to invent new machines that put men out of work, they have the talent to put those men back to work.”
The quote, of course, is John F. Kennedy’s, foreshadowing a decade that gave us the space race, the first satellites, the long-distance telephone calls, and the first computer programming languages.
It should motivate us to be no less bold than Kennedy, or Franklin Roosevelt, or Martin Luther King – or in Australia, than John Curtin or Ben Chifley or Ted Theodore. These men saw the transformative power of full employment for working people. And they championed a dynamic public sector to deliver it.
Today our challenge as a labour movement remains the same.
Over the last hundred years a relatively generous minimum wage by international standards has been the income floor for many Australian workers.
While median incomes have grown strongly over a 30-year period to 2013, our minimum wage has stalled, falling from two-thirds of the average wage to a little over half. This year’s 3.5% national minimum wage increase boosted the minimum wage to 54% of the median wage, despite howls of protest from the Liberals and some of their business backers.
Since the election of the Turnbull and Abbott Governments, real wage growth has fallen dramatically – barely more than 1% growth over five years.
So clearly we need to boost our minimum wage and we need to restore the bargaining power of workers more generally.
It’s no coincidence that both union membership and workers’ share of income are at their lowest levels in the last 60 years.
And in recent times everyone from the Reserve Bank Governor, to Scott Morrison, to the head of the Business Council are pleading for a wage rise to simply materialise – as if the only thing that historically marginalised and underemployed workers have been lacking is the gumption to ask their bosses for higher wages.
Of course, what is needed is a fundamental rewriting of the rules that underpin this structural trend and a resetting of the minimum wage over time to a dignified level that aligns with historical norms.
This would deliver an adequate living wage and would help to underpin wage growth more broadly. And it would arrest and start to reverse the rapid decline in labour’s share of total GDP.
Friends, I began my remarks by talking about elections – and I’ll conclude in the same way.
Our party today is well placed for the next election because it is unified and it is disciplined.
That hasn’t just come from measures we took to end leadership challenges at the end of our last period in government. They’ve helped. But on their own they would never be enough.
It’s come about because we have adopted a set of progressive economic policies that the entire labour movement and millions of its voters agree with.
Have a look at them. Our economic team has assembled a program that is unashamedly Labor. Not trickle-down, but economically progressive.
The era of trickle-down is over. The era of repairing our social fabric and advancing economic equality in new ways has begun.
This project will look different to the past. It will involve us talking about women and the young and cultural difference. It won’t be backward, it will be progressive. But at its heart will be the same idea that H.B Higgins had in 1907: that good jobs produce a good society. As Martin Luther King put it, it will be about Jobs and freedom. JOBS and freedom.