It was Warren Buffett, one of the richest people on the planet, who broke ranks when in 2006 he declared The New York Times that his class was ascending: “There is class war, okay, but it’s my class, the rich class, that is making the war, and we are winning. In 2011, Buffett declared victory. “My class won”, he exclaims, condemn a tax system which allowed a billionaire like him to pay less taxes than his modestly paid secretary.
Buffett’s declaration of victory reflected the legacy of the neoliberal project: a massive redistribution of wealth from employees to business owners. In the three decades since 1989, the overwhelming source of the stock market gains was generated by what economists describe as a “wage shift.”
Instead of looking to grow the pie, business owners have turned to redistributing it themselves by reducing and removing labor costs. Unions have been gutted, secure jobs have been offshored, outsourced, franchised and uberized, so that a new class of precarious labor has emerged. Before the pandemic crushed the global economy, the share of economic growth enjoyed by employees fell to an all-time low and stayed put.
So that you can read whatever you like about the great resignation in the popular press, it is rare to see any recognition of the Great Redistribution.
What happens after the class war is won? The first indications of two years of economic upheaval from the coronavirus pandemic are here. More of the same – just more extreme. The company’s profit share is at record highs. Many of Australia’s most successful businesses have received a significant share of $ 38 billion in government assistance, despite the fact that he is doing well during the pandemic. Qantas, a frequent recipient of taxpayer largesse, and the the biggest recipient of Jobkeeper in the country, took advantage of the crisis to illegally outsource its ground staff, removing from its operations the union the company hated the most.
Despite repeated allegations of a labor shortage after the lockdown, the Treasury predicts that the decade of wage stagnation will continue for years to come.
French economist Thomas Piketty has long predicted the return of “rentier societies”, based on a simple mathematical formulation. He postulates that if economic growth is modest, the bargaining power of labor is low, and returns to capital high, then it makes more sense to sit on assets and speculate rather than accumulate wealth through work, invention or entrepreneurial risk. His prediction has now materialized.
The rich didn’t need to work during the pandemic. The shutdown of large parts of economic activity due to lockdowns and other restrictions has been accompanied by huge gains in the stock market and a stunning real estate boom. On the other end of the spectrum, young adults without well-off parents can no longer afford to enter the real estate market.