Consequently, nominal or money wages might be constant or even rising, and yet real wages, the quantity of wage goods that those money wages are able to buy (workers living standards) might fall, if the value of the standard of prices fell by a greater proportion, causing an inflation of those other commodity prices. In conditions where labour is in short supply, leading to increased competition between firms for it, enabling money wages to rise, which, then, acts to squeeze money profits, the state, via its central bank, can reduce this squeeze on profits, by increasing the currency supply, reducing the value of the standard of prices, so as to cause inflation of commodity prices. This may not prevent the underlying squeeze on profits, but it reduces it, in the short-term, at the risk of creating an inflationary spiral.
At the start of the twentieth century, as Fordist mass production, raised social productivity, and so reduced the unit value of millions of commodities, including wage goods, the opposite situation arises. A nominal wage of £10 per day would, now, buy, say, the equivalent of 120% of the wage goods, it previously bought. That would mean a rise in real wages/living standards. Wages would rise above the value of labour-power. Firms would, then, seek to reduce wages accordingly. However, as Marx notes, workers always resist such direct reductions in money wages. A much simpler method, for capital, is to leave nominal wage rates where they are, but again to devalue the standard of prices/currency, by increasing liquidity, and so causing an inflation of commodity prices.
In such conditions of falling unit values of commodities, resulting from the rise in productivity, the inflation of prices might not manifest as an actual rise in money prices, but only in those money prices not falling. For example, if the rise in productivity led to the unit value of wage goods falling by 20%, a 20% fall in the value of the Pound, brought about by am increase in liquidity, would leave money prices constant. The £10 of wages, would now buy the same quantity of wage goods it previously did, but these wage goods, would, now, constitute a smaller proportion of total commodities produced, as a result of the increased productivity. In other words, nominal wages and real wages would have remained constant, but relative wages would have fallen.
That was what happened at the start of the twentieth century, in the 1920's, and 1930's, and again happened in the 1980's, and 1990's. Conversely, Marx notes that, in 1847, crop failures caused the value of agricultural commodities to rise, as it represented a fall in productivity. If nominal wages remained constant, in such conditions, they would buy fewer wage goods, so that real wages would fall. That is not inflation, as it involves no change in the value of the standard of price/currency, but is simply a consequence of a fall in social productivity, and rise in unit values of some commodities.
The same is the consequence of Brexit, which reduced social productivity in Britain, and raised unit values of commodities, for British workers, thereby, reducing their real wages. The NATO/EU boycott of Russian energy supplies, and sanctions on its exports of grain etc., also caused a reduction in global productivity, and rise in unit values of a large range of commodities, particularly in Europe, which, with constant nominal wages, represented a fall in real wages. For the reasons described above, even with a rise in nominal wages, real wages, and relative wages might fall, if this rise in nominal wages is proportionally less than the rise in unit prices, resulting from either a rise in unit values, due to reduced productivity, or due to an inflation of prices caused by a reduction in the value of the standard of prices/currency, or both.
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