No one’s job is safe

“I wouldn’t say anyone’s job was safe.” Sometimes politicians tell the unadorned truth.

Kim Carr, Labor’s Minister for Innovation, Industry, Science and Research, did that recently when he warned about forthcoming massive job losses in Australia.

Apart from saying anyone could lose their job, he also told 3AW that “these are difficult times, we are facing acute stresses throughout the Western world as a direct result of a global recession”.

What the Minister says about large job losses looming as a consequence of the global economic crisis is true. No number of stimulus packages is going to change that.

This is not rocket science.

The Australian economy is one of the most open and globally integrated economies in the world. If the rest of the world tanks, so do we.

The rest of the world is tanking.

Australia is a capital importing nation. This means we depend on lender or investor countries (in the past the US and Europe, but increasingly China and the Middle East) to supply us with capital to build up our productive capacity and output.

In turn we sell goods (raw materials and food for example) to the rest of the world.

The Australian newspaper annualised the 2008 Gross Domestic Product fall in major economies on February 25. (This means the newspaper multiplied by four the December quarter 2008 figures.) It is not pretty.

Here is a table based on my re-working of their graph. I have added in Australia based on Wednesday’s GDP figures (-2 per cent on an annualised basis) and Canada (-3.2 per cent). Going forward these are likely to be underestimates for most countries for the year as the recession deepens. We are at the start of the decline, not its end. The rope on the bungee jumper is about to snap.

Table: 2008 Gross Domestic Product fall in major economies on February 25

China’s figure is probably an overestimate. It is certainly about 4 per cent below previous levels so the fall of growth in China has been more precipitous than countries like the US.

The dictatorship has admitted it needs growth of at least 8 per cent to maintain “social stability” (employment). China’s integration into the world economy means its growth will fall rapidly in the coming months.

Last year 20 million Chinese migrant workers lost their jobs and went back to the countryside. This year the figure will be much higher.

Looking at the falling growth figures, what can we say? The US, China, Japan and Germany are the world’s four largest economies, producing about 50 per cent of world GDP. (If someone knows the exact figure let me know.)

Our major trading partners are China, Japan, South Korea, Hong Kong and Taiwan.

Our growth rate is falling more slowly than that of our trading partners. It is likely to join them and accelerate to their levels as their recessions deepen.

Capital investment and lending in Australia is drying up, at the same time trade with our major trading partners is about to collapse (along with prices for our resources.)

Because we are such an open economy our recession will be deeper than many other countries.

The large run down of inventories in the December quarter shows that companies are not producing new stock but drawing on already produced goods. This is ominous.

Conservative estimates are that there will be an extra 300,000 unemployed by June next year. This is 7 per cent unemployment. Taking into account underemployment there are probably 1.5 million unemployed and underemployed in Australia (or 13 per cent of the workforce).

Double digit official unemployment now looks a possibility, and possibly by the end of the year. This is an extra 600,000 on the economic scrap heap.

As Rudd and Turnbull squabble tendentiously over the bones of the economy, it is not only politicians who don’t have a clue what to do. The trade union leadership in Australia has no idea either. What is its response so far to the looming economic catastrophe and jobs massacre?

The best these intellectual giants and class collaborationist pussy cats can come up with is a Buy Australian campaign.

If you don’t have a job that’s pretty useless. And if people spend more money on Australian goods than on comparable foreign goods they can logically only spend their finite income on less goods overall, adding to unemployment here, not lessening it.

China won’t buy our cheap resources if we don’t buy their produced goods.

I have a radical suggestion - what about strikes to defend jobs? What about a 30-hour week without loss of pay? What about a real wage increase to increase aggregate demand (the supposed problem with the economy)?

Come on you lapdogs of capital. Fight for jobs.

Or resign and let a new generation of leaders take over who will lead strikes to defend jobs.

Even more importantly, workers themselves must organise to defend their jobs. They can do that.

The real question is will they?