Presently, news broadcasts carry frequent reports of ballots indicating a growing willingness of unionised workers to take strike action in pursuit of better wage deals. This is reflective of inflation running at double percentage rates, while pay offers remain in single figures.
Since the financial crisis of 2007-8 and the subsequent austerity policies, the real value of wages had stagnated at best or even markedly declined. However, this had been masked to a certain degree by inflation being at reasonably low levels.
The ebbing of the Covid 19 crisis to be replaced with greatly increased international tensions served to raise expectations just as inflation gathered momentum. What this lays bare is that all the pre-lockdown problems not only still exist, but are being exacerbated.
As examples, the NHS and social care continue to have rising funding and recruitment issues as those employed in these sectors, in line with workers generally, continue to see wage levels falling in real terms. At the same time there’s increasing demand leading to individual workloads becoming heavier.
Hardly surprising then that industrial disputes are becoming more commonplace. Crisis for capitalism is integral. As always it is the working class who will be expected to accept the consequences through reducing living standards.
The economics are simple and clear: inflation at 10 percent, wage increase of 5 percent means a pay cut, not a rise. The size of the figure on a wage slip is itself meaningless until it is reckoned against what can be bought with it. In crude terms, can more or less be purchased?
No surprise then that workers are reacting with their most potent means within the limits imposed by capitalism. It is also no shock to hear from a range of commentators condemning this as unreasonable militancy by union members.
The last fruit on the money tree has withered and fallen off, or the financial well has run dry. Pick your preferred metaphor; the message is clear. If workers succeed in ‘inflation busting’ pay rises, to use another common cliché favoured by politicians, it will only worsen the situation.
Meanwhile, those ‘selfish’ strikers will be careless of the suffering they inflict through their actions on their fellow workers. After all, we are – hard-pressed nurses and hedge fund managers alike – in it together.
The media, in its role as necromancer, raises the spectre of the 1970s, the ghost of the winter of discontent is conjured to haunt society. After all, striking workers and rising inflation are the twin demons ever lurking in the shadows.
They were eventually exorcised by Saint Margaret of Grantham and subsequently held at bay by each prime minister, Conservative or Labour, who came after her. They ensured the market place was not possessed by the dark forces of organised workers and capital’s values were enshrined and realised.
One of the prevailing myths is that higher wages are a cause of inflation. This is indeed a wondrous act of prestidigitation, as the outcome precedes the cause. Firstly, prices begin the rise rapidly to the point where wages are being seriously devalued and then, and only then, workers demand higher wages. The impoverishment of workers is therefore somehow caused by workers after they have already become poorer.
One solution some politicians offer to make workers better off is reducing taxation. This is the myth of the state acting as the mugger of the wage earner. Wages, profits, expenditure and investment in all parts of the economy come from a single source, the value created by the workers collectively. The proportion going to each of these factors does change, but the source remains the same.
If there is an increase in taxation, while this might be collected from each worker’s income, the actual source of it is that the worker created value. It may cause an alteration in the distribution of the value, a little more to wages to pay for the taxation, a little less to profit or investment.
This can then be adjusted at some point, taking back from workers the little gained. This might be through reducing services workers use, thus lowering state expenditure and taxation. However, this does not make workers better off, except in the short term at best. Access to required services becomes limited as wages stagnate.
Inflation also, in effect, recoups from the proportion received by workers as the real value of what they earn falls, even if the monetary amount rises. Some workers may feel relatively comfortable financially with seemingly well-paid employment, home ownership and savings.
Should such workers make the mistake of living into old age and infirmity, the value stored in their property and savings will soon be absorbed by the social care charges levied by profit-making care companies.
Socialists, of course, support workers organising to defend their present living standards. But, no matter how successful the action they take, it will not, cannot, be a long-term solution. Most likely, gains made will eventually be taken back. Any graph of wages and salaries will show peaks and troughs, never a consistently ascending line.
Strikes also have a dual nature in regard to other workers not directly involved in the action. On one hand those who, in whatever manner, lend solidarity to those on strike show an enhanced level of class consciousness. An attribute that needs to develop further if socialism is to be achieved.
However, strikes can also become divisive when those inconvenienced, or worse, by strikes become oppositional. The pro-capitalist media uses all its influence to exacerbate such reactions, an ideological prophylactic aimed at preventing the germination of class consciousness.
Industrial action is an inevitable response to the imperative of capitalism to maximise its profits at the expense of the workforce. It is a necessary palliative, but not a solution to the economic precariousness of the wider working class.
There is one present aspect that gives the lie to the return to the 70s myth. Even if the trade union movement was to be successful in achieving inflation matching (or busting) wage rises, that would leave many millions of workers no better off. Membership of unions is half, possibly less than half what it was in the 1970s. Even then not all workers, by any means, were members of unions.
There is plenty enough wealth created by workers throughout the world to fully meet the needs of everyone without any need for strikes. After all, a strike is not all bad for capital as it saves on wages for the duration.
The only true cure for inflation is the abolition of prices through creating a socialist society in which money has no part. The myth of things as they are at present being the only way they could be needs to be countered by an increasing understanding of the potential workers have together to democratically create, worldwide, a commonwealth of co-operation.
Dave Alton
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