Tim Gurner’s claim that workers are paid too much and unemployment should rise sound exactly like a caricature from Das Kapital.
Tim Gurner, founder of the real estate company Gurner Group, with an estimated net worth of $584 million, has gone viral after a comment he made at the Financial Review Property Summit in Sydney this week.
The Australian multimillionaire said, “We need to see unemployment rise. Unemployment has to jump 40-50%, in my view. We need to see pain in the economy. We need to remind people that they work for the employer, not the other way around.” This extreme statement reflects the fact that class warfare is very real – and it’s not workers starting it.
He also said that workers have been “paid a lot to do not too much in the last few years,” which is certainly not true. In the Western world, wages have been decoupled from productivity for decades, with the latter soaring while the former has stagnated. Any modest gains made during the Covid-19 pandemic have mostly evaporated.
As the Organization for Economic Cooperation and Development (OECD) said in a July report, “Employment has fully recovered since the COVID-19 crisis and unemployment is at its lowest level since the early 1970s. While nominal hourly wages have risen, to date they have not kept up with inflation, leading to a drop in real wages in almost all OECD countries.”
On the topic of the tightened labor market now known as the ‘Great Resignation,’ there are a number of theories, but two are the most salient. First, the obvious: A lot of people have died from Covid-19 (over a million in the US alone), including many workers. An August 2022 piece by Brookings suggested that as many as 4 million Americans were kept out of the workforce due to ‘long Covid’, i.e., long-term disability brought on by the disease.
Second, and no doubt related, people just got fed up with their dead-end jobs. A Pew Research poll of Americans from March 2022 found, “Majorities of workers who quit a job in 2021 say low pay (63%), no opportunities for advancement (63%) and feeling disrespected at work (57%) were reasons why they quit, according to the Feb. 7-13 survey.” Since employers lobbied against paying for personal protective equipment, maintaining air quality standards, and successfully absolved themselves of any Covid-related liability, it’s no wonder people didn’t want to risk their lives or health for meager pay and long hours.
While these two points mostly refer to the US, the point still applies to virtually every other developed country. The incongruence in power between workers and employers has been so biased in favor of the latter for so long that workers getting a little bit of leverage during the pandemic was an extremely minor, hardly detectable move toward rebalancing the scales. Naturally, the ultra-wealthy see this as an attack because it is against their interests – but they’re the ones launching a perennial class war against workers.
In fact, Gurner’s comments on unemployment draw almost directly from one of the core tenets of Marxism, i.e., the idea of the reserve army of labor. Karl Marx argued (seemingly paradoxically) in ‘Capital: Critique of Political Economy’ that, as capitalism develops, the need to squeeze more labor out of a smaller group of workers, thus creating a redundant group of workers (the reserve army), becomes more imperative. This reserve army of unemployed and underemployed workers will expand or contract depending on the state of the economy and the needs of capital accumulation.
The common idea goes that the more the economy develops, the more jobs are created; everyone benefits from capital accumulation and it trickles down from employers to workers. Marx argues, however, that capital will find new ways to maximize productivity with fewer workers (increase exploitation) and leverage the reserve army of labor (the unemployed) to suppress wage growth. By arguing for increased unemployment to dampen workers’ leverage, Gurner is essentially arguing for exactly what Marx said the capitalists would do in his magnum opus.
Gurner, and other multimillionaires who might be thinking like him but at least have the sense to not say it out loud, should take a step back, breathe, and adapt their line to the 21st Century rather than something out of Charles Dickens’ era. Concepts like the 40-hour work week, the weekend, labor rights, raises, and a livable minimum wage have been standard for about a century. Gurner should remember that the things workers are demanding today, which are rooted in 20th-century social democracy, are not principally designed to help employees – rather, they are designed to save people like him from the wrath of the disaffected working class.
It’s also important to realize that there are people behind unemployment figures; human beings with lives, families, and an experience as lucid as that of Gurner and his friends. To even suggest increasing unemployment as policy is extraordinarily cruel and patently anti-human. Given the fragility of Western democracy today, people in high places who are even conceiving of such things need to remember that it’s only possible to push people so far.