Tory Nonsense On Pay

The Tories are talking total nonsense on pay, and, of course, neither the Brexitories of Starmer's Blue Labour, nor the Tory media are challenging them.  The Tories say that of workers try to protect their living standards by matching pay to prices that would cause further price rises.  Nonsense.  Its clearly not wage rises that have caused the higher prices to begin with, but government and Bank of England policies.  The latter put excess liquidity into circulation, the former has increased costs in the economy, first by Brexit, and then by other policies like its support for sanctions against Russian energy and good exports.

By saying that workers should not see their pay rise in line with prices, what they are saying is that workers should have their real wages cut, whilst real profits, and taxes go up!  Take a loaf of bread as a proxy for the economy.  Its price is £1, and divides into £0.50 for materials, energy, and wear and tear of equipment, £0.25 for wages, and £0.25 for profit.  The government obtains 20% (£0.20) as VAT, leaving £0.05 profit after it.  The government also gets 20% in income tax from workers, and in corporation tax, meaning a further £0.05 from wages, and £0.01 on profits.

As a result of inflation, the price of bread rises to £2, in line with rises in prices for other commodities, including its components.  But, the Tories only want wages to rise by half the rate of inflation, at most.  So, we would have materials and so on £1, wages, £0.375, profit £0.675.  So, profits would have risen by more than inflation, in fact, by more than double!  But, tax would also have risen.  VAT would rise to £0.40, and income tax would rise, even though workers' real wages have fallen.  It would rise to £0.075, whilst corporation tax would rise to £0.055.

So, the only people who lose out, if wages do not rise in line with inflation are workers.  Both capitalists and the government gain by more than inflation, from increased profits and taxes.  When the Tories say that, if public sector workers got rises in line with inflation, it would mean an increase of £28 billion in government spending, not only does this mean that they want those workers to pay for the inflation that the government and Bank of England has created, but they also fail to mention that whilst it means this increased spending, that same inflation has meant a huge rise in government tax receipts too, from which to cover those increased wages!

Tories and their representatives are openly lying.  They talk about workers in the private sector having to settle for single digit pay rises, but the facts show the opposite.  We say several months ago that haulage companies were having to increase pay by around 30%, because of a shortage of drivers, and droves of public sector workers were moving to these jobs.   We have seen wages in the leisure and entertainment sector rising by around 18%, because of labour shortages.  Firms having been paying out £1,000 plus signing on bonuses to workers to try to attract them, and the average pay rise for someone moving jobs is around 15%.  There have been hundreds of settlements in the private sector, where employers are free to raise wages to get the workers they need, as they see demand for their products rising, above inflation, many without any threat of industrial action, and others where only a day or so of action led to employers conceding.

Its only in the state sector, or, as with railways, where the state holds a large part of the pure strings, that workers have faced resistance to their pay rising in line with inflation.  Now, as with Biden in the US, facing workers resisting pay cuts with industrial action, the Tories are proposing using the power of the state even more to impose wage cuts on them, by law, and by further undermining the right of workers to withhold the sale of their labour-power.  We can't expect Starmer's Brexitories to put up any opposition to that either, given their own undermining of workers' action to defend themselves, and their own position that they too would oppose workers getting pay rises in line with inflation.

This is not the 1980's, 90's or early 2000's, as the scale of strikes involving millions of workers shows, and nor is it just millions of workers in Britain, but the same is seen across the globe.  This is like the 1960's.  If the Tories try to impose restrictions on workers right to strike and resist, we should respond as workers did back then, by the principle of class solidarity, in the form of an indefinite General Strike.