John Falzon | Corporate greed has created a cost-of-profits crisis

December 12, 2022

We used to call it a cost-of-living crisis.

Now, though, it is increasingly being called out for what it really is, a cost-of-profits crisis.

As a society, we are paying the unacceptably high price of allowing free reign to those companies that raked in the pandemic profits and now continue to rake in the profits made possible by increased global demand for energy resources.

Here’s a little Christmas wish then.

It’s time we threw off the misleading notion markets find a “natural” equilibrium between wages, prices and profits while governments should only passively look on.

It’s time we reconsidered the acceptability of obscene profits being untouchable while wages, income support payments and social spending are treated as if they are barely movable.

We are paying the price of the cost-of-profits crisis literally, with inflated prices for essential goods such as gas and electricity, and the goods and services that are in turn affected by these price (read “profit”) increases. Which is why the federal government’s recent energy intervention is a welcome first step.

Woodside chief executive Meg O’Neill reacted to this with the assertion “the market is working.” It is working well for profiteers. But not for the rest of us.

We are paying the price of the cost-of-profits crisis through lower wages in real terms. This has been systematically achieved via: repression of unions; restriction of collective bargaining; significant impairment of the right to withdraw labour; public sector pay caps, casualisation; precarisation; sham contracting; and plain old wage theft.

Why was it so desperately necessary for capital to suppress wages? Was it because productivity had lagged behind wages growth? No; quite the opposite, the latest paper from the Australian Bureau of Statistics shows.

Was it because the lazy way to increase profits is to force workers to sell their labour power for increasingly lower rates? Bingo! As the Senate Report on the Secure Jobs, Better Pay bill observed, taking one example:

“Qantas’ assertion that it cannot afford to fairly bargain with its splintered workforce should be viewed in the context of its estimated $1.2 billion half-yearly profit, its recently announced $400 million share buyback, and its recently announced $4 million annual bonus for its chief executive officer, Mr Alan Joyce, which suggests Qantas may have the financial capacity to end its deliberate wage-suppression tactics.”

John Falzon

The Courier 21/12/22