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Class and COVID-19



The issue of class, economic inequality, has for some time been conspicuously absent in contemporary political debate. In the wake of COVID-19, which will greatly exacerbate income and wealth disparities, such inattention must be addressed.

Main image: Sydney skyline (Andrew Merry/Getty Images)

There are many reasons that class as an issue has been pushed to one side, but the most immediate is that it does not suit the interests of corporations. This can be seen in the cynical manipulation of identity politics. Consider the actions of Amazon. The company has donated money to the Black Lives Matter campaign, enthusing that it stands 'in solidarity with our Black employees, customers, and partners, and are committed to helping build a country and a world where everyone can live with dignity and free from fear.'

At the same time the company sacked an African American employee after he organised a staff walkout demanding better coronavirus protections. Then it advertised to hire ‘intelligence analysts’ (spies) to track activists and union organisers within its own, predominately African-American, work force. Meanwhile, the personal wealth of Jeff Bezos almost doubled to over $US200 billion during the pandemic.

The corporate-funded war against organised labour has been going on for decades in Australia and America, with most of the successes going to corporations — not surprisingly, considering they had the money to fund think tanks, political campaigns, lobbying and all the other techniques to manipulate politics and the public mind.

In America, there is a close correlation between organised labour and income equality. In 1980 over 50 per cent of the population was a union member and the middle class’s share of income was also over half. Now, union membership and the income share are both just over 10 per cent: the correlation is exact.

America is facing a K shaped recovery after the virus, which heralds even greater income inequality and predatory behaviour by employers. The worth of America’s richest 400 people has risen by $US3.2 trillion, up $US240 billion since the pandemic started. At the same time, lower class employment is soaring, with the layoffs hitting black workers hardest.


'The method of subjugating the lower classes, financialisation, is new, but the pattern is old.'


In Australia, there has also been a sharp decline in organised labour, with only about 15 per cent of workers being unionised. That means protections and representation are weak, especially for younger workers, who face gloomy prospects in the wake of the economic shut downs. But the picture is different. For one thing, the unions still have influence in one of the major political parties, the Australian Labor Party, unlike America where corporate sponsorship of both political parties is the dominant influence.

The burgeoning of compulsory superannuation also meant that as the unions became less effective at representing workers, they became skilled at accumulating and managed workers’ savings. In effect, they shifted from the labour side of the equation to the capital side.

The sustained and effective attack on organised labour is not the only reason behind the growing class divide. It is true that some of the ‘blue collar’ jobs disappeared because of globalisation, jobs being relocated in cheaper countries, but they are also going because of technological advances that replaced people with machines. Those same technological efficiencies mean that inequality, at least in a material sense, is not what it was in previous epochs. As Stephen Pinker notes in Enlightenment Now, poor people tend to wear the same sneakers and jeans as rich people, a stark contrast to, say, the Great Depression in the 1930s.

Class divides are rather defined purely by where a person sits in the financial matrix: struggling to get enough income, being burdened with debt, or being subject to ‘interest rate apartheid’. The method of subjugating the lower classes, financialisation, is new, but the pattern is old. As Thomas Pikkety has pointed out the greed of elites and the inequality that we are now witnessing represents a reversion to the mean. The only successful counters in the past have been either mass violence or increases in progressive taxation.

If the problems associated with inequality will get worse because of the coronavirus fallout, inequality should not be the sole focus (after all, the best place to find complete equality is the cemetery). What the coronavirus response has exposed is that focusing on just one thing, rather than considering the whole system, is dangerously simplistic. It is true that neoliberals and their corporate paymasters focus on just one thing: consumer prices, as if that is all that matters. It is also true that those at the other end of the political spectrum focus too heavily on just one thing. What is missing is an understanding of the whole.



David JamesDavid James is the managing editor of businessadvantagepng.com. He has a PhD in English literature and is author of the musical comedy The Bard Bites Back, which is about Shakespeare's ghost.

Main image: Sydney skyline (Andrew Merry/Getty Images)


Topic tags: David James, COVID-19, economics, class



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Existing comments

Your article about class divide in Australia limited itself to "financialization" as an explanation. I'd like to hear more about such factors as language, cultural and ethnic "ghettoisation" and the way housing and acccomodation are managed and funded, especially for the recently arrived.

Kay Matthiesson | 17 September 2020  

Labour unions “shifted from the labour side of the equation to the capital side.” It was the Brexit/Trump victories that exposed the new societal gap between the elitist/ globalists (multinationals, banks, media, and political class) and the middle-class/localists. Globalists predicated economic collapse if Brexit/Trump succeeded. The opposite happened. The US had its lowest unemployment in 50 years, and Black and Hispanic unemployment was the lowest in history. Amazon’s Jeff Bezos has used his Washington Post to relentlessly attack Trump and his middle-class supporters. COVID has been a boon to Bezos who has vastly increased his wealth. COVID has also been used by radical administrations to increase lockdowns and destroy middle-class businesses. In Nashville, the major and health department decreed the low COVID numbers linked to restaurants and bars “not for public consumption” while placing severe restrictions on these venues. LA County Public Health Director Barbara Ferrer said schools would remain closed “until we are done with the elections.” Hundreds of big businesses support BLM whose riots destroy small businesses, many owned by Blacks and Hispanics. But this means more business for the likes of Amazon, and more people dependent on the big governments loved by the political Left.

Ross Howard | 18 September 2020  

The question of why unions have declined so much in Australia is an important question and has many answers of course. In my observations there are a number of important responses, the first is that in the past work places were very large with many workers in one place , factory, store room etc. Most workers were of English speaking backgrounds, wages and working conditions were low and dangerous. Workers were not highly educated. The modern work place is much smaller with fewer workers, many workers come from diverse cultural backgrounds and many do not speak English well. Many workers never hear of the history of the union movement in Australia. One institution in Australia with a wide range of cultures as members is the Catholic church, which also has a deep understanding of the need for unions. The development of a Christian Worker movement would be a logical outcome within an organisation such as this. I would be happy to be involved in such an initiative., having been a union member all of my life and a life member of my previous union.

Kevin Vaughan | 18 September 2020  

Class doesn't matter if you've got it!

john frawley | 21 September 2020  

Not quite so funny, John Frawley! David James seems to strike the right note with this polished jewel of an essay. A close relative of mine - creative, hard-working, and employed for most of her young life in the gig economy - has been offered a very large bank loan, which she will struggle in future years to pay off, given the insecure nature of her employment. Unfortunately, she and her equally brilliant but vulnerably employed partner have been induced by the bank into believing that the loans market, post-Covid, now favours long-term renters with unstable employment and who in an earlier era would never have been considered for a mortgage. The carrot on offer is that there will always be work in the gig economy and that fortune favours those brave enough to become risk-takers. This unscrupulous shift of loans policy in a era when conservative borrowers have reined in their spending places the young in positions of double jeopardy. Not only will the gig economy never guarantee them stable long-term employment, they will now become hostages to the mortgage market in ways that prudence and the ethics of lending would never have permitted to happen in pre-Covid times.

Michael FURTADO | 26 September 2020