IT is not a good look. When Parliament’s richest man, Rishi Sunak, tells us to hold our nerve and stick with the plan, he is really saying that the decade and more of wage cuts is the new reality. And we have to like it or lump it.
The rich do not live like us. Price inflation in the day-to-day living costs for working people on basic incomes is far greater because a much bigger portion of the household budget is spent on basic goods.
According to the Institute for Fiscal Studies, there is a differential cost-of-living increase of 11 per cent for the poorest households compared to 4 per cent for the wealthiest.
Sunak knows that corporate profits in Britain were up to £159,494 million in the first quarter of 2023. This is up from £154,087m in the last quarter of 2022. He knows this because the Office for National Statistics says so.
There are none better positioned to know that vastly inflated profits are driving inflation than the people who are the most prominent beneficiaries of these processes.
Most workers long ago put two and two together. They compared their falling wages with rising profits and concluded there is a relationship between the two. If this is true of Bertholt Brecht’s famous “worker who reads” it is equally true of every worker whose reading material is limited to their pay slip.
The government and the Bank of England are on a single-track economic strategy to cut incomes and boost profits, especially bank profits, as their quack cure for inflation.
Hence the interest rate rises and the outlines of what is looking like a further government wage-cutting strategy based around repudiating the recommendations of pay review bodies in public services.
Traditionally, pay review bodies are an emanation of “class cuddle” politics grounded in the idea that there is something of a “fair wage” that reasonable people can determine by reasoned argument.
Teachers know this is nonsense since the original pay review recommendation has been raised several points on several occasions since they began their rolling strike action.
Today, the TUC was spot on when it said that British inflation is not being driven by public servants and that the government’s strategy risks permanent economic harm, including damaging recruitment and retention of staff in vital public services.
The TUC is particularly insistent that ministers should publish the recommendations of all the pay review bodies and “urgently get round the table with education unions to resolve the ongoing pay dispute.”
This points to a permanent problem with the pay battle in public services.
To maintain a minimal level of social cohesion and sustain the illusion that a fair wage policy can exist outside of a socialist economy, public-sector pay under the profit system has to maintain a relationship with the value of labour in the economy as a whole and reflect the levels of skill training involved.
But such is the depth of the crisis induced by, among other factors, the government’s own policies that ministers must — to police wage demands generally — disregard the recommendations of pay review bodies.
Workers and their unions know full well that if the government gets away with its pay-cutting strategy the economic crisis will deepen and working people will be in a worse-off position in the immediate future when a new pay round commences.
It is a never-ending battle without any possibility of a truce because even if workers and their unions cease fighting, the boss class and its government won’t.
