Pandemic amplifies the brittle fault lines in our society

After six gruelling lockdowns and seven stages of grief, there was only one way out – to flee the most locked down city in the world and head to the coast. Bobbing about in the ocean attached to a fibreglass longboard is my preferred form of salvation.

On Saturday morning, I took to the ocean with Dugald, an old friend. The exigencies of the virus meant we had not seen each other for almost two years. Until the pandemic struck, Dugald worked in the live music industry. Like all others in the arts and entertainment industries, his work evaporated along with his income during the pandemic.

Bobbing about in the ocean is my preferred form of salvation.Credit: Glenn Hunt

As our conversation was occasionally interrupted by the need to catch waves, we were joined by the local coastal real estate agent. Like me, he had been lucky enough to continue working. In fact, he had experienced a radically different pandemic – run off his feet with surging demand for coastal property by wealthy city folk seeking a sea change. “I’m selling beach houses for $3 million on Zoom sight unseen”, he explained.

The class divide doesn’t rest during a pandemic; rather crises tend to amplify the brittle fault lines underpinning the systems and institutions that we otherwise prefer to ignore. The under-funded health system. The cruelty of aged care. The dysfunctional labour market. The degradation of the public sector. Above all else, the pandemic has highlighted entrenched inequality.

Our postcodes have determined our experience of the pandemic. Working-class and migrant communities have suffered the worst ravages of coronavirus. Melbourne’s northern and western suburbs have been hit hardest. The residents of its leafier eastern suburbs enjoy higher rates of vaccination and lower rates of infection, illness and death. Meanwhile in Sydney, the police and army enforced stricter restrictions for the residents of its western and south-western suburbs while their eastern suburbs counterparts flocked to the beach.

We have seen the divide in the experiences of those who have not had the luxury of working from home. Being able to self-isolate is a class signifier.

Food delivery cyclists working during lockdown.Credit: James Brickwood

Class war has its own strict etiquette. The first injunction is to deny that it exists. This suits the winners, the top 10 per cent on the income distribution curve. After all, they are hopelessly outnumbered if the rest of the population rise up against their interests – either at the ballot box or with pitchforks.

The second rule is this. If denial doesn’t work, there is always inversion. Periodically, when the growing concentration of wealth is challenged, our richest citizens claim to be victims of a class war driven by the “politics of envy”. These cries of class war are invoked when proposals for progressive tax changes or attempts to wind back policies that disproportionately benefit the wealthiest members of the community are mooted.

It was Warren Buffett, one of the wealthiest people on Earth, who famously broke ranks when in 2006, he told The New York Times that his class was ascendant: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” By 2011, Buffett declared victory. “My class has won”, he exclaimed, condemning a tax system which allowed a billionaire like him to pay less tax than his modestly remunerated secretary.

Buffett’s declaration of victory reflected the legacy of the neoliberal project: a massive redistribution of wealth away from employees in favour of business owners. In the three decades after 1989, the overwhelming source of stockmarket gains was generated by what economists describe as a “transfer from wages”.

Legendary investor Warren Buffett.Credit: AP

Instead of seeking to grow the pie, business owners turned to redistributing it to themselves by cutting and suppressing labour costs. Unions were eviscerated, secure jobs were offshored, outsourced, franchised and Uber-ised so that a new class of insecure labour emerged. Before the pandemic smashed the global economy, the share of economic growth enjoyed by employees sunk to a historic low and stayed put.

While you can read all you like about the Great Resignation in the popular press, it is rare to sight any acknowledgment of the Great Redistribution.

What happens after the class war is won? The early indications from two years of the economic dislocation of the coronavirus pandemic are in. More of the same – just more extreme. Company profit share is charting record heights. Many of Australia’s most successful businesses received a large share of $38 billion in government assistance, despite doing well during the pandemic. Qantas, a frequent beneficiary of taxpayer largesse, and the largest recipient of Jobkeeper in the country, exploited the crisis to illegally outsource its ground staff, expunging from its operations the union that the company most detested.

Notwithstanding repeated claims of a post-lockdown labour shortage, Treasury forecasts 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 posits that if economic growth is modest, the bargaining power of labour is low and the returns on capital high, then it is more logical to sit on assets and speculate rather than accumulate wealth by work, invention or entrepreneurial risk. His prediction has now materialised.

The wealthy didn’t need to work during the pandemic. Shutting down large parts of economic activity due to lockdowns and other restrictions were accompanied by enormous gains on the share market and an eye-watering property boom. At the other end of the spectrum, young adults without wealthy parents can no longer afford to enter the property market.

Josh Bornstein is an employment and industrial relations lawyer and a writer. Twitter @joshbbornstein.