Or, Latho’s Farewell to the Working Class
Robert Reich, Harvard Economist and Clinton’s Labor Secretary, made something of a splash in policy terms with his coinage of the term “symbolic analysts” in his 1992 book The Work of Nations. Reich argued that comparative advantage in the new economy would be driven by innovation flowing from the skills of employees. Of particular importance to value-adding were the ‘new class’ of symbolic analysts who
solve, identify, and broker problems by manipulating symbols. They simplify reality into abstract images that can be rearranged, juggled, experimented with, communicated to other specialists, and then, eventually, transformed back into reality. The manipulations are done with analytic tools, sharpened by experience. The tools may be mathematical algorithms, legal arguments, financial gimmicks, scientific principles, psychological insights about how to persuade or amuse, systems of induction or deduction, or any other set of techniques for doing conceptual puzzles.
Reich’s work made quite an impact on Clinton-era policy, and also on Third Way thinking. It seems Australia has belatedly caught up. So in tune with the contemporary world of work are our politicians, that we should not be surprised that the Howardians have managed finally to unearth a ‘secret’:
Earlier this year, Liberal frontbencher Joe Hockey visited John Howard at Kirribilli to let him on a secret. Hockey told Howard of an evolving dynamic in the Australian workplace. While many stereotypically see small business as a retail outlet in a Westfield mall, Hockey’s department had been working away on the growth of stay-at-home businesses.
Latho’s known about this ‘secret’ for quite some time, at least since 1998’s tome Civilising Global Capital. Having apparently forgotten about the symbolic analysts during the “ease the squeeze” election campaign (when Howard threw a few bones in the form of tax concessions and talk of an “entrepreneurial culture”), he too has belatedly rediscovered the “new middle class … with its army of contractors, franchisees and entrepreneurs”.
It’s not surprising either that this shift in the labour market, and the increasing individualisation of society that is part cause and part effect, are news to politicians. From Higgins J in the Harvester Judgement to Frank Castles’ “Wage-Earners’ Welfare State”, it’s been clear that policy in Australia is based on a normative model of a family with a full time worker as main breadwinner. Politicians, many policy makers and journalists still seem frozen in an imagined world of happy middle class families with hubby doing a 9 to 5 day while the societal sands shift beneath their (elitist?) feet…
This debate is being framed in terms of IR policy, Labor’s economic credibility and the politics of the Labor-Union connection.
Is Latho on to something now, or is his leadership so troubled that Unions will easily put the kybosh on this attempt to rethink policy and electoral appeal? Is Latham’s leadership so weak that this debate will play itself out (as did the mooted appointment of Julia Gillard as Shadow Treasurer) as a proxy fight over his continuing leadership?
Steve Lewis’ column in The Australian says that Joe Hockey’s department identified 800,000 “home-based enterprises”. Lewis goes on to cite the fact that 4.1 million Australians have ABNs.
But what are the true dimensions of this “new middle class”? A first point is that the ABN figures would capture many people who do not make the majority of their income from or spend their majority of the working time on consultancy, journalism, or selling stuff on ebay or at markets, for that matter.
A second important point was made by Tony Healy in a comment at John Quiggin’s place:
Many so-called sub-contractors and “self-employed” are actually casual workers or, in labour market terminology, dependent contractors. These are issues that fall into concern about casualisation and abuse of market power by labour hire firms. The issue is further muddied by the fact that contractor has opposing meanings. In housing, it means a small employer. In IT and business services, it usually means an individual and usually means a dependent contractor or casual worker.
The ABS Forms of Employment series distinguishes between “Owner Managers of Incorporated Enterprises” and “Owner Managers of Unincorporated Enterprises”. The latter category is likely to be the group that we are talking about – incorporated enterprises are likely to be larger scale.
The most recent ABS data (from September 2002) from the Forms of Employment series suggests:
Owner managers of unincorporated enterprises represented 12% of all employed persons. Of the 1,129,400 persons in this group, 21% were in Construction, and 16% were in Agriculture, forestry and fishing. Nearly one-quarter (24%) of this group were Tradespersons and related workers, while 17% were Managers and administrators.
Readers can draw their own conclusions, but this strongly suggests that Tony Healy is dead right. Most people described as “contractors” are not the “new middle class” of symbolic analysts and consultants, but rather the newly outsourced working class of dependent contractors.
Hence the IR connection. Howard’s policy settings seek to maintain the ‘freedom of contract’ of employers by combatting union attempts to bring such contractors within the reach of the IR system, and opposing state legislative moves (in NSW and Queensland) to allow the Commission to prevent outsourcing and contracting out where the remuneration is less than that of award employees.
Mark Latham, in my view, is right to argue that:
“If contractors and franchise-holders are being mistreated by large corporations, we should be just as passionate and determined to defend their interests as when workers and their rights are abused by employers,” he said. “Just as Labor is determined to protect the statutory entitlements of employees, we should defend the rights and entitlements of a new class of economic independents.”
Tony Healy is also correct in pointing to the political salience of the confusion about who we are talking about. Latham’s rhetoric of the “new middle class” and Howard’s “entrepreneurial culture” both give the impression that contractors are Reich’s symbolic analysts – highly skilled professionals who find freedom in not being tied down to an employer. Building on Latham’s ideas in Civilising Global Capital about skills development and the value-adding of innovation would be a very sound move, and should also be tightly articulated to broader debates about knowledge, research, innovation and education at all levels. Taxation policy is also likely to be an important instrument here.
It would be a tragedy, though, if those who are contractors in very weak labour market positions were to be forgotten in all this talk of the funky ‘brand’ of new economy ‘portfolio lives’. The terminology of “economic independents” is also unhelpful in obscuring the real issues, though it may help in securing electoral support in an individualised society where people don’t like to think of themselves as dependent. Incorporating the legal concept of ‘unconscionable contract’ into the laws regulating labour hire is a necessity and likely to have a more immediate impact on the lives and economic positions of dependent contractors and their families than action through the IR system. So is marketing this through a discourse of ‘fairness’ rather than ‘protection from exploitation’.
But what of the politics of Latho’s intervention?
Lenore Taylor, writing in the Fin today (link only for subscribers), says:
Just one day after Mark Latham delivered some brutal truths to the ALP, the trade union movement had some brutal truths for him… On Saturday, union leaders at the Victorian Labor Party conference had a blunt message for Latham: moving away from Labor’s traditional trade union support base could threaten his survival.
This is curious, in a way. In an electorate where the “working class base” has shifted towards the Liberals, where the unions’ constituency is shrinking, and where there is no denying that the ideological whistle of freedom has its appeal, Labor needs to embrace all those groups in a much less unified labour market, rather than choose one or the other. The unions’ response to Latham indicates that this debate is much more about re-asserting power relations within the Labor movement than genuinely rethinking the electoral and policy dimensions of a shifting labour market and diversifying forms of work. Latham has never been particularly enamoured of the union connection, and payback is here. As it is too for his leadership style.
Latham is right on this issue, or at least heading in the right direction, but the internal response to his suggestions demonstrates that he is now caught in the zone where any forward move becomes a potential proxy for disguised attacks on his continued leadership. Simon Crean knows all about this. Mark Latham may not lead Labor into the next election, and it may be better for Labor and for Australian society generally if the ability of the Labor Party to respond to important economic and social changes were not to be destroyed by backward looking and inward focussed wrangling. But is there another alternative?