Nick
G.
Australians have been
outraged by revelations of slave labour conditions, standover tactics and
sexual abuse of s.417 visa holders working in the food production sector.
The ABC’s Four Corners
program made the revelations with the assistance of the National Union of
Workers whose frustration at the failure of politicians to acknowledge and deal
with the rampant exploitation led them to seek the ABC’s support.
For those who missed it,
the program can be watched on iView or read as transcript here: http://www.abc.net.au/4corners/stories/2015/05/04/4227055.htm .
What
is the s.417 visa?
It is a working holiday
visa for people from Belgium, Canada, the Republic of Cyprus, Denmark, Estonia,
Finland, France, Germany, Hong Kong SAR, the Republic of Ireland, Italy, Japan,
the Republic of Korea, Malta, the Netherlands, Norway, Sweden, Taiwan and the
United Kingdom.
It is a one year visa
that requires holders to work at one place of employment for no more than 6
months. It can be extended for a second
year if a person shows that they have had at least three months’ employment during
the first year.
S.417 visa holders
should be paid award wages and the employer should contribute to their
superannuation which may be redeemed by the visa holder (but taxed at a 35%
rate) when they leave the country. They
are not covered by Medicare and are encouraged to have private medical
insurance.
Enter
Labour Hire
Some food production (eg
grapes) is necessarily seasonal and subject to the vagaries of climate. Food producers in this category are dependent
on seasonal labour and don’t generally have a permanent workforce for harvesting
and packaging. Other food stuffs are
grown in temperature- and humidity-controlled glasshouses using hydroponic
techniques and harvest and market their produce all year round. Food producers in this category are not so
reliant on the availability of a transient and temporary workforce.
However, the
reproduction circuits of capital encourage employers to minimise their core
permanent employees and to enlarge the peripherally employed workforce. Labour hire companies exist for the
convenience of producer capitalists to access workers from the periphery.
The expansion of the
periphery grew with the adoption throughout industry of just-in-time production
processes which enabled core capitalists to source raw materials and components
as they were required instead of having to buy bulk quantities that remained
dead capital so long as they were part of an unused inventory. If the capitalist has too much labour power
on stand-by courtesy of permanent employees then that is also dead capital from
his or her viewpoint. Labour supply had
to be as flexible and unpredictable as the supply of material inputs to
production, but reliably available on demand; hence the emergence of labour
hire companies.
The peak body for labour
hire firms, Recruitment and Consulting Services Association, claims that the
labour hire sector represents around half a million Australian workers and is
worth approximately $20 billion as an industry.
Four Corners showed how
some s.417 visa workers were paid as little as $3.95 an hour by labour hire
firms, although the general practice seemed to be for s.417 workers to receive
around $15-$18 an hour when the award is around $25-$26 per hour.
For the food producers,
labour hire employees represent not so much a savings in the base rate of pay
as a savings in total hours of employment, and a savings in entitlements paid
to permanent employees such as various types of paid leave, overtime and
holiday entitlements. The base rate of
pay is paid to the labour hire company which deducts whatever it likes through
fair means or foul from the pay packets of workers.
The
Duopoly cannot deny their responsibility
Food producers are a
disparate group. They range from
small-scale local growers to corporate giants.
D’Vine Ripe, the Adelaide tomato grower featured in the Four Corners
program operates the largest indoor horticultural facility of its type in the
southern hemisphere. It ploughed $65
million into a Stage 2 expansion of its 27-hectare glasshouse facility in 2011
and a further $25 million in 2012. In
June 2014 it was taken over by two Australian capitalist companies, Perfection
Fresh Australia Pty Ltd, owned by the NSW Simonetta family, and the Victor
Smorgon Group based in Victoria.
Regardless of the size
of the food producing companies, all are subject to intense pressure from the
major supermarket duopoly of Woolworths and Coles[1]. Other purchasers also exist, but the duopoly
sets the pace. There have been various
exposures from time to time of the aggressive and bullying tactics imposed on
growers by the duopoly, and farm gate suppliers have been loud in their
complaints. Most of this has fallen on
deaf ears within parliamentary circles.
Yet the shonky labour
hire operators could not exist outside of the symbiotic relationship they have
with the duopoly. The orderliness and
neat presentation of fruit and vegetables by “fresh food people” whose prices
keep going “down, down” is in stark contrast to the social devastation and
dislocation imposed on workers in the periphery from whose labour power the
duopoly profits. It is a global
phenomenon. Robert Biel, author of The Entropy of Capitalism calls it “the
dissipation of responsibility” an important element of which is for the core
firms such as the duopoly to “hook up with criminal elements in the periphery”
(p. 205), evidence of which was most certainly a part of the Four Corners
program.
Arresting
the decline in the rate of profit
All capitalists are
beset with a problem first revealed by Karl Marx: the law of the tendency of
the rate of profit to fall. Competition
compels capitalists to reduce the component of capital expended on wages. There are various ways to do this, most
obviously by investing in machinery
and technology and divesting the
number of workers employed. However,
human labour power is the source of surplus value realised at the point of sale
as profit, so there is a tendency for
the amount of surplus value to decline
as fewer workers are employed and as capital is increasingly tied up in fixed
assets. This law applies equally to
Woolworths as it invests in fixed assets related to procurement, storage,
distribution and sale, as it does to D’Vine Ripe and its investment in
super-sized glasshouses, advanced hydroponic equipment, water, seeds and
nutrients.
But the system of
capitalism is more than the sum of its parts.
There is an advantage to capitalism generally as much as there is an
advantage to individual elements such as Woolworths and D’Vine Ripe in reducing
production costs. If food can be
produced more cheaply through precarious employment at the point of production
combined by GM technology and other fixed capital innovations, then the
production (and reproduction) cost of labour available to all capitalists can
be frozen or reduced, or if not reduced, then diverted into new areas on
consumer spending (ie new areas for the realisation of surplus value as
profit).
Briel describes it this
way: “The rate of profit can be
maintained by reducing the cost of living, making it possible to pay lower
monetary wages; thus the argument for repealing the protectionist Corn Laws in
19th century England was that cheap imported food would benefit the
general rate of profit (the interest of landowners being therefore sacrificed
for the sake of industrial capitalists).
At the same time, according to Engels’ law (formulated by mid-19th
century economist Ernst Engel) the poorer a household the higher the proportion
of its income goes on food: if only the price of food could be reduced, poverty
would seem to be reduced, while also leaving a larger slice of income to buy
other goods and thus providing a market for new consumer industries. In this way, the interlinked responses to
pauperisation and to the rate of profit issue resulted in a huge effort to
drive down the cost of food” (p. 119).
Here lies at least in
part some of the explanation for the reluctance of politicians of all capitalist
parties to effectively tackle the sort of exploitation revealed on Four
Corners. The cost of food production and
of food prices are studied meticulously by the Bureau of Statistics, by the
Stock Market and by academia – all privy to this general understanding of the
importance to limiting wages growth of
keeping food prices “down, down”. The
Labor politicians in Victoria and SA who have set up parliamentary enquiries into
labour hire in the wake of Four Corners are typically opportunistic: they have
known about labour hire scams and shonky sub-contracting arrangements across a
range of industries and have done next to nothing to weed out these
practices. Likewise, the federal
government has now announced that it will audit pay-slips of s.417 workers, but
has rejected a cross-jurisdictional approach that would bring together the
relevant government departments as well as state and territory
representatives. It’s a froth and bubble
response and won’t unduly worry criminal elements and stand-over merchants
running labour hire companies.
Finance
capital speculates on market chaos
When we talk about the
interests of the capitalist class as a whole we have to also acknowledge
contradictions between its various sectors.
The food industry has become the plaything of hedge companies and
private equity firms whose financial capital requires market chaos as a
condition of its drive to profit through speculation. The futures and options markets in fact
operate against the interests of
productive capital (industrial capital) by manipulating an increase in food
prices to advantage and therefore works counter to a stable or reduced cost of
living. The great food riots in Mexico,
Egypt and elsewhere in 2008 were attributed to just such a market manipulation
that caused some grain prices to rise by up to ten times their historic
prices. It was not a problem with
supply: the world produced more wheat than ever before in 2008, yet great
masses of the international proletariat were driven into hunger by financial speculation
in food commodity markets. A thorough
explanation of food commodity derivatives is beyond the scope of this article,
although information is easily accessed online for those who wish to look into
the issue themselves. Suffice it say
that in the era of imperialism, and after the neo-liberal stage characterised
by the complete victory of finance capital over the circuits of all capital
(industrial, merchant and so on), there can only ever be a tendency to
impoverish both the peripheral workers and the peripheral consumers, those for
whom “food price rises adversely affect their purchasing power by reducing real
income…and increasing the risk of malnutrition and its consequences”[2].
Defend
the workers; end the system
In the immediate sense
the Four Corners program requires all sections of the working class to unite to
drive out the exploiters of workers in the periphery, to drive out the sexual
predators and thugs who live in this peripheral social environment. It requires united action to bring workers in
the periphery into the core of the workforce where there are acceptable levels
of wages and entitlements, safety and security at work, and good accommodation
and services.
This is the aim of the
National Union of Workers whose national secretary has called for “a new
compact of enforceable, transparent and fair collective workplace protection
for workers…”[3].
In the longer term,
workers who are conscious of and appalled by the exploitation of workers as a systematic feature of capitalism, as
something inherent to capitalism
rather than the product of one or two rogue elements with criminal features,
must put their efforts towards developing the revolutionary movement for
anti-imperialist independence and socialism.
Such a movement exists, although it is small and likely to remain so in
the absence of a real revolutionary situation.
The Communist Party of
Australia (Marxist-Leninist) strives to bring together the advanced
revolutionary element within the working class and by unifying and organising
this element, better position the working class as a whole for the giant
battles ahead.
Understand the
issues….join in and strengthen the movement….make a commitment for a just
future free of exploitation.
Such is our perspective
arising from the expose of slave labour by Four Cormers.
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