THE past few days have shown a combination of economic illiteracy and downright misrepresentation from politicians and the media.
Take for example the BBC’s headline on Tuesday: “UK wages grow at record rate.” This was rightly ridiculed by hundreds on Twitter (or whatever it is called these days!) with close to 800 users quoting it to correct the misleading message.
It now carries a “community context” disclaimer. As Strike Map pointed out, these supposed wage rises are still below inflation, and therefore, in reality, represent wage cuts.
This is a reality that needs to be repeated constantly. Inflation measures the average rise in prices so, for wages simply to keep pace with prices, they need to be at the level of inflation.
Anything less than inflation, and what you are able to buy with your wages is worth less this year than it was at the same point last year. And if your wage can buy less today than it could this time last year, it’s not a pay rise — it’s a pay cut.
This is right at the heart of the cost-of-living crisis. For far too long, wages have been held below inflation, causing year-on-year pay cuts. As Costas Lapavitsas, James Meadway and Doug Nicholls argue in their short, accessible but authoritative book, The Cost of Living Crisis (And How to Get Out of It), “Wage rises should in truth be above the rate of inflation, to begin to claw back some of the extraordinary losses that workers in the UK have had to endure over the past decade and more.”
Another person who seems incapable of grasping how inflation works is Education Secretary Gillian Keegan, who reportedly told teachers back in June that falling inflation would lead to lower prices, increasing the value of teacher salaries (a claim denied by the government).
Whatever the truth of the matter (and it looks unlikely that inflation will hit the 3 per cent target she predicted at the time), it just goes to show how little inflation is understood. While inflation is greater than zero, prices are rising and the same pay is worth less, year on year.
It is incumbent on us, the labour movement, to do better and to understand the impact and the causes of inflation (see yesterday’s editorial) because it is our responsibility to fight it and to defend working people’s standard of living. That is why the strong message from unions that workers won’t be fooled by falling inflation is welcome.
To fight the effects of inflation, we need to win above-inflation pay rises, and we need the ability to win these year on year.
Long term, this will involve sweeping aside pay review bodies in the public sector and management imposition in the private sector (which effectively amounts to the same thing) and rebuilding national, sectoral collective bargaining.
The Institute of Employment Rights Manifesto for Labour Law and the trade union movement and the Labour Party’s New Deal for Working People set out how this can be achieved. As we head into TUC Congress and Labour Party conference, it is essential that this policy is retained and strengthened, not discarded like far too many promises have been by Keir Starmer’s Labour.
But we cannot just rely on the Labour Party to deliver for us either. Unions need to be able to fight and win pay increases on their own terms, and that means defeating the anti-union laws that the Tories are attempting to force on our class.
The entire trade union movement needs to mobilise around the defence of trade union rights and this needs to be led by a co-ordination across the left, bringing together the most class-conscious and active workplace, branches and unions to lead a fightback.
Unions should support demands for a national demonstration to defend trade union rights and begin to build the solidarity which will defend workers who find themselves on the wrong side of unjust laws.
The time to fight back is now. We must organise the left and rally fighting unions in defence of our rights.
