Posted by John, August 23rd, 2009 - under unemployment, Wall Street.

Tags: Bonuses

According to Kevin Rudd’s unFair Work Australia, the economy is doing so badly that low-paid workers need to do without a pay rise this year, despite rising costs of living.

It seems, however, that Wall Street didn’t get the same message.

After slightly decreasing in 2008, corporate fat cat pay cheques have recently started to rise again, showing exactly what the priorities of the rich and powerful are in an economic crisis.

A recent report written for the Wall Street Journal forecast that Goldman Sachs will pay out almost twice as much to its high fliers as it did last year – an estimated $US700,000 per employee, with even more for the top execs.

This would have been sickening even back in 2007 when the economy was going better, although workers’ living standards were not. It’s even more outrageous today, with millions more losing their jobs and facing foreclosures.

Steven Eckhaus, executive-employment lawyer at Katten Muchin Rosenman LLP in New York, told the Wall Street Journal that he is “seeing deals like it’s 2007 again,” and spoke of $US10m+ guaranteed pay deals for corporate parasites.

With payouts like that, there’ll be plenty of money for the filthy rich to put down a deposit on their second corporate jet, buy their children Ferraris, or to hire a chef to cook for the family pet.

In the same country, but for another class, things aren’t looking so rosy. At the very same time that the rich are getting their snouts right back in the trough, working class living standards are in freefall.

Unemployment in the US is now 9.5 per cent of the workforce – and a massive 24 per cent amongst teenagers.

Investment author and analyst Bill Gross is one of many prominent capitalist economists who now predict that unemployment in the US will exceed 10 per cent for a protracted period.

Those with jobs are now working an average of 33 hours per week, which underlies a massive shift toward insecure part-time work that doesn’t pay the bills.

And while for the rich losing a job means the opportunity to spend even more time yachting or snorting cocaine, for workers it is a catastrophe.

Losing a job – or sometimes even losing hours at work – quickly means losing health cover, being unable to pay rent or a mortgage, and often homelessness.

And it’s not just American workers. Ireland has 12 per cent unemployment, Spain has over 18.5 per cent.

The economic crisis really exposes the class divide at the heart of capitalism.

In a society based on exploitation, a crisis isn’t something that affects all layers of society equally.

Those who control the key decisions in society – the capitalist class – will make every effort to use the crisis to cut wages, slash job security, and do anything they can to pass the burden of the crisis onto workers rather than themselves – so they can raise profits and walk away with the enormous payouts they are again starting to give themselves.

Alan Kohler of Business Spectator projected that consumption (by workers) could be “suppressed for a generation, as it was in the 1930s”.

One thing is certain – if workers’ wages are further pushed down, our employers will be laughing all the way to the bank.

This article, by Andrew Cheeseman, first appeared in this month’s Socialist Alternative.