UK Wages Surge As Jobs Grow and Strikes Spread

UK wages excluding bonuses rose by 6.6%, in the three months to February, surging past the estimate of a 6.2% rise. Wages including bonuses rose by 5.9% compared to estimates of 5.1%. The average continues to hide significant differences, as the government uses the power of the state to punish state employees as a means of trying to restrain wages and boost profits.

Average wage growth in the private sector was 6.9%, whereas for the state sector only 5.3%. In the finance and business services sector, wage growth was 8.3%. But, averages always hide much bigger differences that tell an important story. For example, we know that bus workers at Abellio, won an 18% pay rise after striking, and Rolls Royce workers won a 16.9% pay rise. Many more such pay increases have been won by workers that do not hit the headlines. Where workers are employed in larger concentrations, and able to organise, they can win substantial pay rises, as the above shows. Where they are employed in small numbers by small firms, its harder to organise, and employers can more easily simply replace workers if they threaten action.

The 6.9% figure, therefore, is likely to hide a wide disparity of actual settlements in the private sector, with workers in larger firms getting bigger pay rises, way in excess of the average, and large numbers of workers in small firms getting pay rises way below the average, or none at all. Given that the Tories are the party of the small business class, and their ideology revolves around its world, its the workers employed by their friends in these small businesses they are talking about when they say that they are getting lower pay rises than state employees are being offered. That is the world they seek to create, and its what Brexit was all about.

But, the reality, here, is also different. Whilst small employers can more easily replace a small number of workers, by the same token, the largely unskilled workers employed can also more easily move their labour-power to some other employer. This is one reason the Quit Rate rose. That is workers, particularly employed in small firms, where they could not organise in unions easily, and leverage higher wages, find it easier to get higher pay simply by looking for another job, and so they quit their existing job, and move to another.

That was a common feature of the 1950's and 60's, and even early 1970's, reflecting a growing relative shortage of labour. The average increase for workers simply shifting employer is 14%, giving an indication of where the average really is for the amount employers are prepared to pay if unions were to press them by stopping the ineffective one day strikes, and engage in an all-out strike, as used to be the case in previous decades. The union leaders are being timid, and tailing their own members, at a time when they should be providing leadership.

After all, its not as though workers are not showing a thirst for joining unions in large numbers once again, as also happened in the 1950's and 60's, nor for those workers being prepared to strike having joined the unions for that purpose. The timid RCN leadership recommended the government's insulting pay offer, but the members overwhelmingly rejected it anyway, demanding more strikes be organised.

We need a new, leadership in the unions that stops tailing their members, and concerning itself with public opinion shaped and manipulated by the Tories and the Tory media, and that starts winning the kind of double digit pay rises that individual workers have been getting for themselves, simply by moving jobs. In fact, we know that where there have been severe labour shortages, for example, for lorry drivers, employers have been prepared to pay 30% higher wages, in leisure and hospitality they paid up to 18% extra as they competed for scarce labour. In the NHS, faced with huge labour shortages, whilst they refuse to give their own workers a decent pay rise, they pay out huge sums, way in excess of their workers wages to private companies and individuals, to provide contract workers, to do the same jobs!

What we have, at the moment, is a shell game, in which the government is trying to con workers into accepting or demanding lower wages by trying to persuade them that other workers are accepting much lower wage rises than they have been offered. The government can most easily do that with its own workers such as health workers, teachers, civil servants and so on, where it controls the purse strings. But, the reality is that workers outside the state sector are already getting these large pay rises, other than those employed in inefficient, low value small firms, and those workers are responding to that, by simply moving to other jobs, preferably with expanding larger companies.

That leaves the state workers with the only other choice of facing down the Tory government by taking strike action, which is what they have been doing. As employment continues to rise, (employment rose by 190,000 in February), and labour shortages grow, that puts workers on a firmer footing to take such action, and demand the wage rises they need to match the high levels of inflation that the policies of conservative social-democracy has created over the last 40 years by continual excess printing of money tokens, to inflate asset prices.

In February, 350,000 days of strike action took place, up by 50% from the 210,00 in January, and that figure has risen further since February. We are back to the kind of days lost to strikes of the Thatcher era, in the early 1980's, but, unlike then, workers are, now, on the front foot. Back then, new technologies introduced by capital to respond to the crisis of overproduction of capital/shortage of labour/squeeze on profits from rising wages, had created a relative surplus population and rising unemployment.  Today, the opposite conditions apply.

The main weakness is the inadequate nature of the union and labour movement leadership that its timid and tailing way behind the actual working-class. We need a new rank and file leadership, able to organise within the workplace and seize control of the industrial action, using wildcat strikes where appropriate to win against employers, rather than workers being drawn into the long drawn out, bureaucratic processes of arbitration and so on. That new leadership should just, for now, by-pass the existing bureaucratic leaders, and start organising all-out action, forgetting about all the Tory laws demanding lengthy ballots and rigmarole before action can be taken. The rank and file leaders should work across unions to coordinate action, and give solidarity action in support, in defiance of Tory anti-union laws, and we need to begin replacing the current leaders with new leaders forged in the fire of this new rank and file movement.

Who Is The RCN's Statement Aimed At?

As RCN members voted, decisively, against the government's latest derisory pay offer, and the government continues its hard nosed position, the RCN leadership have issued a statement saying that strikes could continue until next Christmas. Who is this statement really aimed at – the government or its own members? What is its real purpose?

Remember, the RCN leadership had recommended that its members accept the pathetic offer made by the government. Even today, Greg Hands appeared on TV to ridiculously claim that the government's offer was fair and reasonable, despite the fact that, even in respect of this year, it represents a huge real terms cut in wages, never mind the year after year cuts in real wages that nurses and other state employees have suffered over the last 13 years. The RCN leadership recommended accepting this pathetic offer, despite the fact that, the average pay rise for non-state workers is over 7%, the average increase in pay for workers just changing employers is 14%, and Rolls Royce workers gained a pay rise of nearly 17%, with London bus workers at Abellio securing an 18% pay rise!

What the statement by the RCN leadership means is that they have no strategy to win a decent pay rise for their members any time soon. The government looking at that statement must conclude the same. They will look at it and think, “We've rode the strikes this far and not paid up, and the longer they go on, the more the ground shifts in our favour, as public pressure will mount, and nurses will simply become demoralised, and want to settle, even with a terrible deal.”

And, that is what the statement is really all about. Having recommended acceptance of a terrible deal, and seen the membership reject it overwhelmingly, the union bureaucrats now need to continue a semblance of putting up a fight whilst demoralising the members so that the next time they take the vote, they will get the result they want. Instead of saying that strikes could last until next Christmas, meaning they would not have secured a decent pay rise for this year, but also for next year, the union should have said that they were intensifying the strikes, so as to have greater effect, so as to force the government to come to the table with a decent offer. The union and the BMA are talking about coordinated action, but that is a bit late in the day, especially as UNISON has voted to accept the deal put to them, which weakens the workers position, unless UNISON members are led to provide solidarity action.

And, here lies the key. The action in the NHS ought to be, and should have been, from the start, coordinated action, and preferably undertaken by one big NHS union, covering all NHS workers. What is required now is not a commitment to drag out the dispute indefinitely, but a commitment to step up its intensity until such time as the government is forced to concede. The strategy adopted, by all the unions, of periodic one day strikes, is rather pathetic, and ineffective. Employers weather a day or two day strike, knowing that they can recover lost production, in the days after the strike is over. As has been known for some time, workers working a four day week, are more productive than those working a five day week, for example. To really hit the employers, and be effective, workers need to go back to the all out strike used in the 1950's, 60's, 70's and 80's, and we need to use that as the basis for building solidarity action from other workers, irrespective of current anti-union laws that forbid it.

Health workers are always in a compromised position, because of the nature of their job, which is why, in the past, other workers have taken strike action on their behalf, as with miners strikes in the 1980's, on behalf of health workers. The TUC could do that today, organising an all-out strike on behalf of health workers, on the basis that our lives and livelihoods depend upon them. But, even in the absence of that, there are other alternatives. There should be an all-out strike by all health workers, to force the government to concede, but we then need to protect the lives and health of other workers.

The best way to do that would, ideally, be via a worker-owned and controlled health and social care system, in which workers pay into their own social insurance scheme, at a rate which they decide upon, as sufficient to provide the health and social care, in each area, that adequately meets their needs. It would operate as a cooperative, and commission the actual health and social care, provided by local hospitals, polyclinics, and social care providers, all themselves run as worker cooperatives by the workers within them.

But, we don't yet have that so we have to deal with what we do have. That means that workers should occupy existing hospital and healthcare facilities, in the same way that workers at UCS did in the 1970's, and that French workers did in May 1968. They need to establish workers' committees in each facility, so as to exercise workers control over them, deciding how best they can be run to continue to meet the needs of other workers in their communities. They could do that by also working with local Trades Councils/TUC's, who could provide additional support for their strike, All of these different bodies of workers' democracy and self-government, need to cooperate and coordinate their activities, and the best way of doing that is to establish local workers' councils in each area, a bit like existing trades councils, but sitting permanently as a means of taking action, as well as making decisions.

In fact, on this basis, workers in the finance and accounts departments of NHS Trusts and so on, could ensure that NHS workers not only continued to be paid, but were paid the wage rises they are now claiming. Government workers in the Treasury, could give solidarity action by sending money to those NHS Trusts accordingly, rather than that money being used to buy weapons and fight wars across the globe.

No doubt, the state would try to break up such occupations and solidarity action, which is why the local workers' councils would need to organise defence squads to go to any facility, under threat from the police, so as to defend it, and the occupation. The state, as seen at Orgreave during the Miners' Strike, would then step up its attacks using soldiers in police uniforms and so on, which means that the local workers' committees would need to have prepared local workers' militia, adequately armed and ready to resist such attacks, and each such local workers' council would need to connect with every other such council, in a national network of workers' councils.

That is some way down the line from where we are now, but rather than talking about continuing the same old limp periodic strikes for another year, is the kind of message that the unions and workers should be sending to the government about our determination to win, and indeed more than win, but also to begin to create a new type of society, and new relation between workers and capital, and its ultimate agent, the capitalist state.

As a very first step, local trades councils/TUC's, should set up Health Workers Support Committees, as was done with Miners Support Committees in 1984-5. But, they need to go way beyond those committees, which acted mostly to organise fund raising, demonstrations, and mass pickets. We need such committees, today, to be in permanent session, organising support for health workers, not passively, but actively, by encouraging and coordinating strike action by other workers in support of health workers. If they can't strike completely, then we should do so for them.

From there, we should build the confidence and organisation to begin occupying hospitals and other facilities, and running them under local workers control. If the hospital doesn't pay its electricity bill, in order to pay its workers, then power workers should ensure its electric is not cut off, and the same with its other utility bills, and payments to suppliers. It is, in practice, workers who run all of these different businesses, and their socialised capital is our collective property, and yet we allow the law to continue to allow shareholders and their representatives to control them, and run them for the interests of those shareholders. Its time for that to end, and for workers to take control of their collective property, and use it to meet their needs not those of shareholders and speculators.

Jobs, Wages, Sales, Inflation, Profits, Interest Rates and Asset Prices

The data continue to confound the ruling class speculators and their ideologists and media propagandists, as well as frustrating the catastrophists, who had foretold of a post pandemic slump, as the latest instalment of their permanent crisis theory, in which the next recession is always at hand.

The US non-farm payrolls, for last month, as previously noted, soared by more than half a million. But, week after week, the number of US initial jobless claims, also continues to come in at less than 200,000, and often below the estimates too. Indeed, the trend for jobless claims has been steadily downward, rather than upwards, dashing the hopes of the speculators, and those like Larry Summers, who hope that the rate hikes introduced by the Federal Reserve would cause firms to slow down, and start sacking workers, so that pressure on wages and interest rates would abate, so that asset prices could be inflated again.

US wages are also rising at over 5%, which with the increased number of workers, increased number of hours, and all of the liquidity sitting in bank accounts, left over from lockdowns, means that the US consumer is still spending too. The figures for US Retail sales (ex autos), published last week, showed it rising by 2.3%, month on month, in January, and that is the largest increase since March 2021. Retail sales are now back above the trend from before lockdowns.

 

As all of this liquidity continues to flow out into the real economy, its clear that employment is a leading indicator in current conditions, whereas the sentiment indicators, have become increasingly divorced from the real economy. The sentiment indicators, suggesting declining activity, have been repeatedly shown wrong, because those that contribute to them are simply reflecting impressions taken from a doom laden media that has been forecasting recession and slow down for months.

And, the latest US producer prices data, also, shows that with employment rising, wages rising, sales rising, and economic activity increasing, it continues to pass through into the demands for inputs, and now, second or third round effects on producer prices begin to feed through, even before we get the main effects of rising primary product prices, as China comes out of lockdowns, and its economy gets into full swing. US Producer Prices rose by 0.7%, month on month in January, the most in seven months, and nearly double the estimate of 0.4%. Producer prices mostly affects goods inflation, which has been declining in recent months, whilst services inflation continues to increase.

This spike in producer prices suggests that, what has been said before about waves of inflation, is playing out, as the ground is being set for a new wave of goods price inflation, in coming months.

Meanwhile, for consumer price inflation, the data showed that it remains far higher and stubborn than had been predicted. Estimates were for it to drop to 6.2% year on year, but if fell only from 6.5% to 6.4%, and month on month, it rose by 0.5%, compared to just 0.1% the previous month. And, core inflation appears to be even more sticky.

That is tricky for the Federal Reserve, which had been looking to step down the level at which it was hiking rates, having moved from 75, to 50 basis point hikes in recent months, and down to just 25 basis points in February, with speculators hoping it might have been the last, and even that it might cut rates later this year. That looks impossible, with even thought that it might have to go back to a 50 point hike at the next meeting, and certainly that it will continue hiking for longer, and reach a higher terminal level.

But, even that is still being underpriced. Stock markets have basically gone nowhere in recent weeks, despite the potential for continued higher rates. The speculators continue to hope that firms will lay off workers, wage pressures will be reduced, and so the pressure on profits will be reduced. But, there is no indication of that happening, and the reality is that material conditions have changed fundamentally. In the US, Biden has used the power of the state to impose terrible wage deals on rail workers, and has sought to do the same with dockworkers, but US workers, like workers across the globe have had enough, and sense firmer ground beneath their feet, as economies expand, and relative labour shortages have developed. As firms see sales continuing to grow, especially in service industry, they continue to need additional workers, and are having to pay up to get them.

Those rising wages impose on profits, but, so far, firms have been able to utilise the excess liquidity that central banks have created to simply raise prices. Rising prices of materials and energy has led to a tie-up of capital, which appears to be a slower growth of profits, because a portion of surplus value is used, now, to replace consumed constant capital, at these higher prices, rather than appearing as realised profit, or dividends/interest and so on. With prices rising faster than hourly wages, even as total wages rise, therefore, a part of this tie-up of capital is covered by an increase in the rate of surplus value. But, much as happened in the early 1960's, a comparable period to that we are now in, workers will begin to close that gap, and then go beyond it.

As noted a few weeks ago, Rolls Royce workers in Britain won a 16.9% pay rise, and London bus workers at Abiello, have won an 18% pay rise. The struggle of US dock and rail workers is not over, despite the attempts of Biden and the Democrats to suppress them, and across the US, large numbers of workers are unionising in areas they have previously been unorganised, and are demanding pay rises to compensate for the high levels of inflation. As US workers, like those in other countries win these pay rises, squeezing profits, firms will again, seek to compensate by raising prices, and the central bank will accommodate them by increasing liquidity further, causing inflation to rise in yet another wave.

Only if they temper the increase increase in liquidity, will they be able to prevent a price-wage spiral, but that will mean, as happened in the 1960's, and into the 1970's, that profits will be squeezed. That squeeze on profits, at a time when firms continue to have to accumulate capital as rising demand for wage goods, pushes the economy forward, means that the demand for money-capital rises relative to its supply, pushing interest rates higher. It means that asset prices have much further to fall, despite the current complacency. In fact, already, with 10% inflation, asset prices are already 10% lower, in real terms than their nominal prices suggest. As in the 1960's, and 70's, those asset prices will fall, both as a result of actual falls in nominal terms, via a series of crashes, and steep declines, and as a result of a prolonged fall in real terms, extending over a couple of decades.

Rolls Royce Workers Win 17.6% Pay Rise

Workers at Rolls Royce at Goodwood have won a 17.6% pay rise.  So much for the Tory claims about private sector workers not doing as well as public sector workers like nurses.  So much also for all the doom and gloom stories about impending recession intended to pressure workers into not pursuing pay claims to compensate themselves for Tory induced levels of high inflation.

As in the 1960's and 1970's, when stronger groups of workers broke through the dam of pay restraint that governments were trying to impose on them, and opened the door for other workers to flood through, its necessary to spread the word of all of these victories for workers in raising pay, and to encourage all other workers o follow suit, to join unions and get involved to raise their own pay, conditions and pensions, and to fight also for higher benefits and pensions for all workers.

£1 Million For Four Speeches, But Tories Won't Give Nurses a Pay Rise!

Yesterday, it was reported that Boris Johnson received £1 million in fees in about a month, just for giving four speeches.  Yet, the Tories won't pay nurses, and other workers enough to ensure that their wages are not savagely cut in real terms, as the inflation the government and Bank of England have created, bites into workers' pay packets.  Of course, Johnson is just the tip of the ice-berg, and a recent easy target for the media to highlight.  In reality, lots of Tories and their supporters pull in much more than that, especially from their ownership of shares.  But, that they now even refuse to talk to the nurses they had everyone clapping for just a few months ago, shows just how brazenly hypocritical they are.

The level of support for striking workers presents a problem for the Tory media, because it can't be too strident in its hostility to workers, because the reality is that strikes are now so extensive that nearly every household in the country has someone living in it who is, has been, or shortly will be on strike.  And, for those that don't, many will have people who have already had pay rises bigger than those being demanded by public sector workers, as private companies compete to get labour, with workers shifting jobs getting an average 14% increase just from doing so.

So, the media tone down their hostility, and leave it to selected vox pops to do the dirty work.  They get individuals who complain they have not had a big pay rise to come on to complain, as though if all other workers put themselves in the same boat that would in any way benefit them.  Then they have people whining about not being able to get to a birthday or Xmas party or some such like, as though that is more important than a nurses kids having the heating on, or food on the table at Xmas, or they have people claiming they are sympathetic, but nurses shouldn't strike because its contrary to professional ethics, and against the interests of patients needing treatment.  Presumably, then they would be quite happy if all nurses to avoid such a conflict with professional ethics simply all left the job to get better paid work elsewhere, so that the NHS would collapse, and no patients would get seen to!

In the past, there has been lots of polls done about people saying that nurses should get paid more than footballers.  Its a pointless exercise because the polls have no power to change anything, and so long as people are prepared to pay upwards of £1,000 for a season ticket, billionaires from across the globe are prepared to turn clubs into their private playthings, and TV companies will pay billions for rights to show matches, footballers will continue to be paid millions, and nurses won't.  But, when looking at the media response to strikes, and the claims about affordability and so on, those kinds of comparisons are useful, about just who gets paid what, and how important the labour they provide is.

The BBC has always been the propaganda arm of the British capitalist class and its state, and continues to be so simply supplemented by the rest of the Tory media.  Its only necessary to look at the range of past BBC and other journalists that were Tory student leaders, and who take up jobs as Tory press spokespeople and so on, to get the lie of the land.  The BBC has always been keen to ensure that in its selection processes, it always ensures that its journalists are safe for capitalism.  That's not too hard given their usual family background, their time spent in the top universities along with the rest of the kids of the ruling class, and the lifestyles they enjoy, subsequently, whilst not that of a billionaire, leaves them comfortable enough to know which side their bread is buttered on, when considering their response to other workers and their pay.

Take one of the BBC's less well-paid, front of screen presenters, Carol Kirkwood, who is one of several Weather presenters.  Although her salary does not appear in the BBC's list of salaries above £150,000, leading to the assumption that she is paid less than that for presenting the weather, her total income is estimated to be around £300,000 a year, with a net worth of around £4 million.  The rest of the income comes from the fact that TV presenters, in the age of mass media, and 24/7 News have been turned into celebrities, who, even back in the day of Angela Rippon on the Morecambe & Wise Show, earn money from appearing in all sorts of roles.

But, especially given the fact that, not only are the BBC's Weather forecasts usually wrong, for much of the country, the job of a weather presenter is basically to stand in front of a green screen, with a button, and read out a script.  Did I really need several such presenters, over the last few days, paid these mega bucks to tell me that it was bloody cold outside, which I could see by looking out of the window?  Is that something we should be happy about paying hundreds of thousands of pounds for, as against claims that we can't pay nurses, or train workers even enough money to live on?

A list of the top BBC presenters salaries is given here.  Some of them, in the last year received pay rises of £100,000, and most received pay rises of around 10%.  The pay rises, in many cases were themselves more than many workers receive in total as wages, and, of course, these are only the figures for what they were paid for those presenting jobs, and not what they obtained from associated activities, appearing on other programmes, writing in journals and so on.

Now, I'm not saying that these workers should get paid less, the result of which would be only that the BBC and other media companies and so on made more profits, that, in the case of listed companies would go to provide even bigger dividends to shareholders the richest of whom already obtain far more than anyone else, but its worth remembering whenever we are told that nurses or train drivers can't be paid a decent wage, or get a pay rise to cover inflation, that the job of a train driver, nurse, teacher or postie is probably far more vital than being told what the weather might possibly do today.  Its certainly worth bearing in mind when listening to discussions about ordinary workers having to strike to get a decent pay rise.