THE fastest fall in real pay on record explodes Establishment lies about a “wage-price spiral.”
It shines a spotlight on a crisis driven by corporate profit which is set to ruin millions.
Even in the 1970s, the period most economists point to when arguing that pay rises drive inflation, this was far from true. The communist industrial organiser Bert Ramelson demonstrated in pamphlets and articles in this newspaper back then that world commodity prices had a far greater effect on the inflation rate, which could be brought down by price controls without lowering workers’ living standards.
The 1970s are a much-mystified decade, cast by Thatcher and her political heirs as an era of stagnation and out-of-control trade unions stifling economic growth, ending in the “winter of discontent” from which Thatcherism saved us.
Written out of the story are the savage spending cuts imposed by a Labour government at the behest of the International Monetary Fund, which — through an effort to force wages down well below inflation — brought that government down.
The whole narrative exists simply to justify the savage attacks on trade union rights by Thatcher and subsequent governments and the huge transfer of public assets into private hands they have enabled.
It’s a lie. Economic growth under Thatcher was lower than under the Labour governments of Harold Wilson and James Callaghan, and has continued to slow down since.
What has grown sharply since the 1970s is the share of Britain’s output taken in profit rather than paid in wages.
This “great wages grab,” as it was once described by the TUC, has been accompanied by increasingly unequal wages as well — with the share taken by the highest paid increasing year on year.
Employers claiming today that we need to keep pay down to rein in rocketing inflation had a different excuse for the same con trick yesterday.
Real pay lost ground throughout the lost decade of austerity imposed by the Conservatives (and their Liberal Democrat sidekicks) from 2010.
By 2013 two-thirds of children in poverty had a parent in work. By 2019 the figure was three-quarters. Work was criminally underpaid well before the current crisis.
The human consequences are all around us. Teachers have sounded the alarm for years over underfed, inadequately clothed schoolkids. Homelessness rose 165 per cent between 2010 and 2019.
Employers have seized on worker desperation to impose insecure contracts and chip away at rights we thought we’d won for good to holiday and sick pay, as the so-called “gig economy” has expanded from the fringes to dominate major professions.
So the “cost-of-living crisis” is not some new product of post-pandemic demand outstripping supply, or the consequence of Russia’s war in Ukraine.
It is a crisis of profiteering which sees the share of wealth stolen by a tiny elite swell with each passing month.
A billionaires’ bonanza where FTSE profit margins are up over 70 per cent in the last two years alone; where one in three households is projected to be in fuel poverty in four months’ time while the Sunday Times Rich List can brag about the current “golden era for the super-rich.”
The answer is to fight back. And workers are doing so.
The 13 per cent raise won by Unite check-in staff at BA is just the latest in a string of wins showing workers who use their industrial muscle can beat the trends.
Protests are mushrooming. The People’s Assembly is rallying for an autumn offensive including protests at the Conservative Party conference in October and a national demo on November 5. Even Labour’s right-wing leader is beginning to fear the public mood.
We are not just being robbed by energy price hikes this winter. We have been robbed for years and our country is poorer and more insecure for it.
It’s time for a reckoning.
