AI, State Services and employment

The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.
from The Communist Manifesto

You are not paying attention if you have avoided contemplating what will change in society as so-called Artificial Intelligence (AI) is deployed. Its already available in simpler form in general digital technologies including web browsers, computer code editors and office computer applications such as MS Teams, Office365 or Google Workplace. Whether you want it or not you're getting it. Resistance is futile?

I’ve got a background in the labour movement as a trade union official for quite a long period of time, and one of the things that I certainly learnt very early on is that no one can stand in the way of technological change

Greg Combet is the chairman of Australia's sovereign wealth fund, the Future Fund, and was secretary of the ACTU from 1999 to 2007

US Capital is leading the way splurging $US billions on buying capacity for AI (One estimate is U$400 billion in the coming year). Data centres are are being built. Projections for power consumption are exploding.  The price of Nvidia shares has increased exponentially and the end of the investment bubble is not yet in sight. Its likely that your super account has grown as a result of the increases in share market valuations.

seven stocks – Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla – have delivered about 40 per cent of the S&P 500’s market capitalisation gains so far this year. They also now account for 35 per cent of the world’s most important sharemarket index, up from 20 per cent at the start of 2023.

So what's all the excitement about and why is there so much enthusiasm?

Machines were, it may be said, the weapon employed by the capitalist to quell the revolt of specialized labor.
Marx, Poverty of Philosophy (1847)

Effectively, capital's enthusiasm for AI is based on its human labour displacing potential. Either existing employees become more productive (organisations will get more output per hour worked) or workers are made redundant. There is also a secondary effect, that the intensity of labour will increase. The velocity of processes  and the quantity of data processed will increase.

In the initial phases of deployment, it will be simpler tasks that are replaced. Chat bots are deployed to respond to customer queries and requests. Call centre staff numbers will be reduced. The sophistication of solutions will be enhanced. Translation tasks will be handled by natural language processing. Data analysis will be automated. Job applications will be sorted and ranked, building applications approved, x-rays diagnosed.

The changes are happening quickly. In the US jobs are being shed in the tech sector. In Australia the ANZ bank has announced 3500 in-house jobs and 1000 contractors are gone. NAB has cut 410 roles.

Jobs once considered secure are in the cross hairs. Some economists call it polarisation and others use the shape of a barbell to provide an image of how the shape of labour will change. Middle order jobs, those between overpaid executive management analyst jobs and front line delivery staff are or will be reduced rapidly.

What is unknown at present is how many jobs will be vulnerable to replacement by AI and how quickly that will happen - estimates vary. Optimists predict that new jobs will be created to replace those that are cut. After all, capital requires workers to work, mass unemployment would affect capital's profits as overall demand declines. No one is suggesting that new jobs will achieve the same rate of pay as those that are lost.

The Dialectic

the historic mode of production, i.e. the form of society, is determined by the development of the productive forces, i.e. the development of technology
Marx - Poverty of Philosophy

For communists, the dilemma is real. Technology offers significant opportunity to enable a society that is more productive, that reduces the requirement for human labour, but the mode of of production in place, capitalism, displaces any benefit for the working class. Should communists oppose the introduction of new technology (as under capitalism it simply increases the rate of exploitation) or accept its deployment and struggle to claim some of the benefits?

The dialectic is even more difficult for unionists as new technology is introduced, jobs will be cut. Do unionists defend existing jobs even as the deployment of technology makes those jobs redundant, or do unionists accept change to defend the jobs that remain and the economic viability of the employing organisation?

This is relevant to the CPSU because a large part of its membership comes from role types that will be affected by the introduction of AI. The state does have the resources to pay for AI and will mirror the social relations of the mode of production of the private sector.

The Public sector is used by Labor as a buffer to address unemployment - it soaks up the reserve army of unemployed at those times when demand for state services increase and private sector jobs are in decline. (e.g. during the COVID pandemic). Employment is used in concert with monetary policy to keep the economy within the guard rails established according to the benchmarks of the OECD, Treasury and Reserve Bank. These benchmarks track public service employment and expenditure against the private sector and GDP growth. A key metric is wage incomes versus profits in relation to GDP. State revenue is largely derived from different forms of taxation and growth of tax revenue is dependent on general economic growth of the private sector. Flexibility in state expenditures is provided for through the use of public debt. Demand in the economy is stimulated by increased state expenditure. The "deficit" is considered to be a key metric of capitalist economic performance.

These benchmarks are used as markers for how well the government of the day is managing the capitalist economy. Whilst the Liberal opposition is ineffective, reactionary media are quite effective in deprecating Labor's management of the state's economy. Even as support for socialist policies has increased, the capitalist mode of production does not yet look vulnerable to replacement.

In Victoria, the state government is facing significant revenue issues as funding the existing deficit provides a limit on the availability of more lending. The current Victorian Labor government has indicated a desire to reduce Public Service numbers to pre COVID levels.  AI is coming.

How will your union respond?

Provision to discuss major change in EBAs, will slow down change, but it do not provide a way to stop it. Unprotected industrial action will lead to financial penalties for unions. Many sites do not have high rates of membership. Opposition to job losses won't be easy, and the rollout of the technology will receive support from many sectors that are not immediately affected. The public will be led to believe that service delivery will be improved, made more efficient and will cost tax payers less.

But it hasn't happened yet. We should do what we can to get on the front foot.

Immediate demands

- Members of the union need to press the union to formalise policy on AI
- The union should engage with the government immediately to establish an agreement on AI implementation
- Redeployment not redundancy
- Voluntary early retirement schemes to be enhanced ( qualification age lowered and remuneration increased)
- Redundancies to include training vouchers for all types of providers (private and TAFE) - 10k pp.

Long Term Demands

- Four day week - 32 hour week as productivity gain. 4x8

References

https://www.afr.com/politics/federal/no-one-can-stand-in-the-way-of-ai-combet-20250909-p5mtk9 - Combet on AI

https://www.abc.net.au/news/2025-02-20/vic-govt-public-sector-job-cuts-spending-review-budget/104958948 - 3000 job cuts

https://www.afr.com/chanticleer/here-s-how-the-ai-bubble-could-pop-20250917-p5mvo0 - AI Bubble

https://www.theage.com.au/national/as-thousands-of-bank-staff-found-out-this-week-the-future-of-work-s-already-here-20250911-p5muel.html Bank sector job losses