The following pamphlet was written in February 2008 for the End Low Pay campaign in Perth. The author, Michael Suter, is a member of the Socialist Party in Perth. We are glad to publish the text for the first time on line here at socialistpartyaustralia.org.
The wealth in Australia
We have experienced an unprecedented world economic boom over the last ten to fifteen years yet not every one has benefited from this boom.
Big business and their representatives in government tell us â€œYouâ€™ve never had it so goodâ€. However if we look at the real facts and figures we may draw the conclusion that it is the bosses that have never had it so good. It is ordinary working people in Australia who are still battling to earn a decent living wage. Profits are at all time highs whilst wages have been kept low.
We hear a lot of propaganda from employers that under the new Rudd ALP government there is a danger trade unions are going to be running the country. Nothing could be further from the truth. Unfortunately due to the political weakness of the union leaders for the most part trade unionism is in decline. What we have on our hands at the moment is a dictatorship of the employers. Assisted by anti worker legislation employers have been systematically forcing workers into low paid casual jobs.
Australia is the 19th richest country in the world with a trillion dollar economy. The total wealth of the top 200 people is $126 billion. In 2007 we saw the top 200 richest people increase their wealth by 26.7 per cent. There are now 30 individual billionaires in Australia.
James Packer tops the list as Australiaâ€™s wealthiest person with a staggering $7.25 billion, Gina Rinehart, who is the major shareholder in BHP Billiton and Rio Tinto is Australiaâ€™s richest women. Last year her wealth jumped from $1.8 billion to $4 billion, a colossal increase of 222 per cent! Rinehart is expected to earn a further $500 million per year from the new Hope Downs mine in WA.
Top 10 Rich List
RANK NAME WEALTH ($M) INDUSRTY
1. James Packer 7250 Media
2. Frank Lowry 6520 Property
3. Richard Pratt 5400 Manufacturing
4. Gina Rinehart 4000 Resources
5. Andrew Forrest 3890 Resources
6. Kerr Neilson 3530 Finance
7. Harry Triguboff 3000 Property
8. Shi Zhengrong 2870 Technology
9. Kerry Stokes 2710 Media
10. David Haines 2620 Investment
What is clear is that over the past decade we have seen the rich get richer and the poor get poorer, not just in Australia but world wide. Below we outline just a few facts and figures which clearly demonstrate that this increase in wealth is not just affecting working people in Australia but it is also pushing poorer nations further into poverty.
Richest and Poorest Nations Differential
It is now the case that a few hundred millionaires world wide own as much wealth as the poorest 2.5 billion people. 20% of the population in the developed nations consume 86% of the worldâ€™s goods. 0.1% of the worldâ€™s population control 25% of world assets.
The other side of the coin is that half the worlds, nearly 3 billion people live on less than $2 per day. UNICEF says that 30,000 children die each day due to poverty, that is 210,000 each week and nearly 11 million each year. The GDP of the poorest 48 nations, a quarter of the World population is less than that of the 3 wealthiest people combined.
Life expectancy has been reduced in 4 out of 5 groups of countries. Itâ€™s only the richest group which has seen life expectancy increase.
The above facts quite clearly demonstrate how the rich are getting richer and the poor getting poorer, but what is the story in Australia. Are we all benefiting from the boom? In Western Australia we have a significant resources boom but who is actually benefiting?
In the recent Australian Fair Report it states â€œNo progress has been made in the fight against poverty despite falls in unemployment and steady economic growthâ€. One in ten Australians lives below the poverty line ($281 per week per adult) which is 2.2 million people. In 1994 8% of the population lived below the poverty line, in 2002 this had risen to 11.1%.
Who are the disadvantaged?
Aboriginals and Torres Straight Islanders record 17% unemployment. Infant death rates are 3 times higher than other Australians. Life expectancy is 18 years lower than other Australians. Senior Citizens are also really struggling. 47% of single adults over 65 live below the poverty line.
Women have been particularly disadvantaged because they predominantly work in the low paid sectors. Most are employed in retail or hospitality or as cleaners, health care workers or in administration.
The vast majority of jobs that have been created in this boom are part time and casual. 563,500 Australians are unemployed and 800,000 want more work. There has been a drop of 51,000 full time jobs in the last decade. The wage gap between permanent and casual workers has also increased.
See the figures below to see the average wages of some workers in Western Australia in 2006.
Job $ per week
Federal MP 2445
Medical Practitioner 1757
Legal Profession 1520
Truck Drivers 965
Bank Workers 686
Sales assistants 384
The average wage in Western Australia in 2007 was $55, 661 per year or $1070 per week. Obviously the median average would be much lower than this figure.
It was further reported that between 1998 and 2004 the average wage increase was 3.6%, the median wage increase was 2.6% however the bottom 20% of low income earners only received a 1.2% increase whilst the top 10% of income earners received 13%.
All these figures quite clearly demonstrate that the wealth in Australia has not been evenly distributed.
If you look at company CEOâ€™s (Chief Executive Officers) pay again we can see how excessively the bosses have rewarded themselves. The top 100 CEOs last year have increased their own pay by 38%. In 2007 the average salary was $550,000 per year or $10,576 per week. In 1992 the CEO earned 22 times their average worker salary in 2006 that had risen to an astronomical 74 times more than their average worker!
For those who say workers in Western Australia are doing very well and are having a fair go we should point out that the highest paid workers in WA, the miners are only averaging $85,550 per year and only received a 7.6% wage increase. Yet Gina Rhineheart a mine owner increased her wealth by 222% in one year. Andrew Forrest a major shareholder in Fortescue Metal, which mines iron ore, has seen his fortune rise by 85% in one year from $810m to $3.85 billion. This is a staggering $8.4 million per day. The differentials continue to widen as more and more wealth is being created.
Recently in Perth we saw hospital workers (cleaners and auxiliary workers) take industrial action asking for an 11% pay rise. McGinty a Labor Minister said â€œThis is a ridiculous wage demandâ€.
We would say it was very reasonable considering these workers were only earning between $300 and $400 per week. In fact it was McGinty who was being ridiculous to think people can live on such low pay in Perth today.
The rising cost of living
Rents in Perth are now averaging $300 per week, and we have seen rents rise about 33% over the last 18 months. This along side the constant rise in interest rates has meant that any wage increases have been more than swallowed up by the rise in the cost of living. Petrol prices, rent prices and basic food prices have all been increasing at a higher rate than our wages leaving those in low paid jobs even worse off.
New mortgages in WA are now averaging $300,000 due to speculation in real estate. The median house price is $460,000. It is very hard to find any houses for less than $350,000 in any suburb throughout Perth. Repayments on a $300,000 loan would be about $2,000 per month or $461 per week. That means someone on average earnings would be paying 43% of their wages on their housing loan!
It used to be quite common that people would pay off their mortgages early by increasing their regular payments or by using their savings, however with the dramatic increase in the size of loans this is now almost impossible.
Inequality in Australia
With such high property prices, the dream of home ownership for Australian workers is becoming a thing of the past. Low paid workers or even average paid workers will not be able to afford the cheapest of homes. The banks are now encouraging 100% mortgages, introducing special mortgages to allow parents to help their children by using equity in the parentâ€™s homes and changing the rules to allow multi ownership loans.
The finance capitalists are laughing all the way to the bank as they increase the debt that ordinary working class people face. No wonder we see some of the biggest salaries given to the Bank bosses. Alan Moss CEO of Macquarie Bank received $33 million in 2007. We should remind ourselves the average bank worker in WA is paid a paltry $686 per week.
The recent housing crisis in the US should be a warning to everyone that the world economic boom has reached its limit. It is certain that US will go into recession. When this takes place, China as a major exporter to the US, will also be affected. This will have a flow on effect to Australia and in particular it will affect the Western Australian mining boom.
Workers in WA need to make sure they are protected now with decent pay levels which match the wealth they have created, and have organisations that are able to defend their employment rights should the world move into recession.
The gap between rich and poor in Australia was made worse with the introduction of John Howardâ€™s Work Choices legislation. These industrial relations laws helped bosses push workers onto individual contracts that cut take home pay and conditions. The laws also led to more job insecurity by making it easier to sack workers unfairly.
A recent study in NSW found the introduction of Work Choices led to workers in fast food outlets loosing 21.3% of their pay. Bakery workers lost 24.5% of their pay and retail and hospitality workers lost 30% of their pay.
Quite clearly the recent Federal Election showed that Work Choices was deeply unpopular and that the Howard government had become out of touch with reality. Most people voted against Howard on the basis that Work Choices was seen as unfair.
While the new Rudd ALP government has said they will scrap Work Choices they are in effect implementing â€˜Work Choices Liteâ€™.
The Rudd ALP government has no intentions of improving the living standards of working class people. Rudd has already stated that his government will be â€˜fiscally conservativeâ€™ and has warned workers that it will not tolerate wages increases unless supported by increased productivity.
It seems that Rudd thinks it is totally acceptable for bosses to make massive amounts of profits and for workers wages to be kept low. According to Rudd it is hard working Australian families that should bear the brunt of any economic downturn and not the employers.
The Socialist Partyâ€™s End Low Pay campaign demands:
A living wage for all. The immediate introduction of a $16 per hour minimum wage as a step towards a national minimum wage of $20 per hour.
A 35 hour week without any loss in pay. This will share out available work and provide workers with much needed leisure time.
Equal pay for equal work. For an end all discrimination on the basis of age, gender and nationality.
That all casual workers should have the option to be made permanent after six months.
That Work Choices be scrapped in its entirety. Trade unions should fight for decent wages, conditions and industrial relations laws.
The restoration of all democratic rights including the right to strike, the right to organise and the right to trade union representation without any restrictions.
The End Low Pay campaign encourages all workers to work with us to rebuild the trade unions into fighting and democratic organisations. We believe it is only through collective organisation at the work place level that wages and conditions can be improved.
We can not rely on greedy employers to share out the wealth that we create. The last ten years have shown the bosses have gorged themselves at our expense and refused to share out the spoils of the boom. We first need to understand the situation, secondly we need to rebuild the trade unions as the best weapons for improving our wages and conditions.
It is both collective organisation and collective action that will force employers to improve the pay and conditions of ordinary workers. Only by workers fighting through their trade union and community organisations will we see an end to the scandal of low pay.