How Our Govt Help The Rich Get Richer And The Poor Get Poorer


If you feel like things are getting harder and that maybe that’s part of a deliberate government strategy, you’re not alone, writes Jeremy Poxon.

Already this year, Australians have been confronted with a new barrage of statistics, re-confirming that we are indeed living in a starkly unequal society. The richest 1% now own more wealth than the bottom 70% combined. Growth for workers’ wages has slowed to record lows. Our underemployment rate – 8.4% – is now higher than almost anywhere else in the OECD. And we learned recently that homelessness has jumped 14% since the last census.

Such grim figures, and subsequent ‘moral’ appeals by advocates, have seemingly failed to trouble the minds or hearts of those in power. Just last week, government passed a new Welfare “Reform” Package, which will continue dismantling our social safety net, and is ultimately designed to eject more than 80,000 Australians from income support.

At the same time, the Coalition is trying its darndest to gift more tax breaks to the rich.

It’s easy, as some have done, to simply dismiss these actions as non-sensical, “misdirected” or “cruel”; however, in doing this, we risk losing a deeper understanding of why government implements such cut-throat reforms, and how they work to re-enforce structural inequalities in our society.

After all, we should give government its due. These policy positions aren’t irrational or ill-conceived; instead, they’ve been very intelligently designed to manage and discipline low-income populations, while boosting the profits and position of the economic elite.

This is perhaps best exemplified by one of government’s key social policy centrepieces: the increasingly controversial and ineffectual $1 billion Work for the Dole program, which has been dramatically expanded by the Welfare Reform Package.

Work for the Dole is typically composed of low-supervision, menial tasks (such as cleaning or labouring) that, for the most part, don’t lead to secure paid jobs. ANU’s Social Research Centre review found that only 2% of participants they studied had gained employment after “successfully” completing the scheme. Furthermore, according to a report commissioned by the government itself, 64% of sites don’t comply with standard workplace health and safety regulations.

“Rewarded” with a “salary” that’s less than half the minimum wage, Work for the Dole participants also exist under the constant threat of benefits withdrawal if they don’t perform their activities to their job agent or supervisor’s liking.

Essentially, social programs like Work for the Dole help establish a “reserve army” of vulnerable individuals who are willing to work hard for practically no pay, security or basic rights to safety. Work for the Dole isn’t designed to create meaningful careers for people who desperately need them; rather, it creates a back-up reserve of workers, who are utterly compliant to business needs and demands.

Despite the program’s litany of flaws, the newly-formed Department of Jobs and Small Business continues to publicly decree that working for the dole helps the poor and unemployed “develop the skills that employers want” and “show they are ready to start work.”

Here, government strategically recasts the problem of poverty as one of individual responsibility and behavioural deficiency: that the poor’s only barrier to employment, and a decent life, is their own lack of work ethic or “job readiness”.

In putting so much emphasis and blame on the individual, politicians cleverly divert attention away from the fact that their policies are continually, and quite deliberately, failing to provide jobs for the people who desperately need them.

According to new ABS stats released last month, there are currently 2,870,100 job seekers competing for 178,600 jobs – or, 16 job seekers for every position currently available.

That this reserve army of labour is so large, and only continues to grow, helps explain why we find ourselves in the midst of a wage stagnation crisis in an era which has otherwise seen a record-breaking spree of continuous productivity and growth.

Indeed, thanks to government investment in programs like Work for the Dole, businesses are able to churn through ever-growing waiting pools of disadvantaged and desperate job seekers, willing to accept any kind of work no matter how dismal or demeaning. This helps maintain a downward pressure on wages, increases job insecurity, and ultimately allows businesses to hoard more and more of its profits.

Rather than helping disadvantaged citizens, our welfare programs have instead been transmuted into key profit centres for corporations and businesses. As recently pointed out by the CEO of the Council of Small Business Organisations, privatised employment services are making an absolute killing off the back of the disadvantaged and unemployed.

These job agencies are awarded increasingly lucrative contracts to administer, monitor and enforce welfare programs, while businesses which sign up to be approved Work for the Dole sites are gifted a constant supply of virtual slave labour.

It’s staggering how far things have degraded since the halcyon era of full employment, when government guaranteed citizens a decent job, and wages grew steadily alongside productivity.

Sadly, in the late-70s this commitment to full employment was abandoned as “inflationary,” and the rift between between workers’ wages and business profits has grown ever since. Along the way, these unbridled profits for economic elite have been justified under the illusory promise that such money “trickles down”, creating work and opportunity for the masses. Here, abandoning a full employment goal essentially meant abandoning redistributive welfare policies in order to follow the cold, uncaring logics of the market.

Two generations on, politicians now claim that budgets are too “financially constrained” to commit to progressive employment policies; yet, they manage to find enough cash to fund a $7.3 billion employment services industry which disciplines the growing army of unemployed, while redirecting wealth and power upwards.

Sadly, our welfare programs are no longer evaluated as if the elimination of unemployment or homelessness are even attainable goals; instead, they’re explicitly designed to make our growing number of job seekers and insecure workers more manageable and amenable to business interests.

At a time when more and more Australians are plummeting into poverty and precarity, it seems cruel and illogical that government would gut social security and grant more concessions to the rich.

Yet, these decisions continue to be informed by a calculated, often hidden, logic that puts the needs of an elite few before the rest of us. Indeed, what we might label “reckless” or “absurd” policy is actually just neoliberal economics working exactly as it has been designed to.

As difficult as it may be to realise or admit, our government remains a shrewd and sophisticated enemy of the poor.

Jeremy Poxon is an independent journalist and media officer for The Australian Unemployed Workers Union.