Once again, the latest US jobs data came in much stronger than estimates, defying the hopes of speculators, and conservative social-democrats, like Larry Summers, who want to see unemployment rise, to put downward pressure on wages, and allow profits to rise further, which would provide space for interest rates to fall, so again boosting asset prices.
Today's, non-farm payrolls came in up 263.000, against an average estimate of 200,000, and "whisper number" of 180,000. The figure was higher than the 260,000 announced last month, but that number was, also, revised upwards today, to 280,000. Anything more than 90,000 a month means that the US is creating more jobs than the average monthly increase in the workforce, so that labour supplies becomes relatively tighter, strengthening the position of labour as against capital, and putting further upward pressure on wages.
Even worse news for the speculators and conservative social-democrats cam in the form of the data on wages. As I have set out previously, the data on average hourly wages do not give the full picture. The fact that around 10 million additional jobs have been created, means that the amount being paid out in wages, in total, and feeding into worker households, is considerably more than the figures for individual hourly wages suggest. On top of that, there have been large amounts paid out in bonuses, and signing on incentives and so on, as firms struggle to recruit workers. Also, data shows that large numbers of workers have simply changed jobs, with the average increase in their wages, from doing so coming in at around 15%.
But, now, it looks like tight labour markets, and increasing confidence of workers, resulting from it, is also passing through into actual stronger increases in individual hourly rates too. The outward symbol of that is the rash of strikes by millions of workers, not just in the US, but in Britain, Europe and the rest of the world. The US data had been estimated to show hourly wages rising by just 0.3% on the month. In fact, they rose 0.6% on the month, not only double the estimate, but higher than the 0.5% of the previous month. Worse still for the speculators was that, for service workers, the increase was 0.8% on the month.
Service industry accounts for 80% of the economy, and so this amounts to a rise of around 10% for the year. The cat is out of the bag, and with households still having strong balance sheets, the current round of Federal Reserve rate hikes, designed to slow consumption, and create a recession, look far more like causing a sharp sell off again in bonds, followed by a further crash in other asset prices, long before any recession undermines the bargaining power of workers.
For two years, western governments could rely on lockdowns to do that job for them, but, like putting a finger in a dyke, once that was removed, it simply resulted in an even greater deluge of liquidity into the economy, resulting in the current inflation, and subsequent demand from workers for compensating pay rises. They can't go back to those lockdowns, and even the Chinese Stalinists, as I have been saying for months will have to abandon them, as now looks likely in the New Year, which will have a further upward driving force on the global economy, compounding the problems of the speculators and social-democrats.
So, Biden and the US Democrats appear to be, instead, taking a leaf out of the Chinese Stalinists book, and rather than using lockdowns to do that job for them, they are instead using other Bonapartist and authoritarian measures against US workers, in a frantic attempt to stop workers protecting themselves. As I reported a couple of months ago, 150,000 US rail workers are set to strike over their pay deal that would even make rail companies in the UK blush. But, as I set out back then, Biden and the Democrats were set to impose this terrible deal on them by law. They have now passed a bill to impose the deal on them, essentially, thereby, denying US rail workers the basic right to strike to defend their pay and conditions.
That ought to be a warning to all those who have been calling for the capitalist state and the government to intervene in pay talks in Britain, as well as to all those calling mindlessly for a General Election to install a reactionary Starmer Blue Labour government. Starmer is significantly to the right of Biden, and the writing is already ion the wall with his expulsions and sacking of Labour MP's even for just standing shoulder to shoulder with workers on picket lines. A reactionary Starmer government would use its position to impose even harsher attacks on British workers.
At the present time, as millions of workers stand up to capital and to the Tories, now is not the time to demobilise that action by calls for elections, but to build on that rising wave of industrial struggle, and give it political direction connecting grass roots activists in LP branches to those struggles across the country, and drawing the newly mobilised and class conscious workers, at the same time, into those LP branches, to fight for a longer-term, political solution to their problems, a solution that will also require kicking out Starmer and his supporters, at all levels of the labour movement, transforming and rebuilding, and rearming it, for the class struggle ahead. The same struggle faces workers and socialists in the US, and across the globe.
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