A government at war with living standards

I've blogged before about the project of the political class to attack working conditions and living standards, in some cases with calls for British workers to give up leisure activities and follow the selfless example of Indian proles.

This project has been being referenced more openly by senior politicians. When government figures talk about “winning the global race” in the context of economic recovery, they are essentially talking about two things. First, the ability to attract investment to the UK. This means providing a good “investment environment” to capital – a “flexible” workforce, low wages, etc. And secondly, a “business-friendly” legislative approach for UK businesses: more deregulation, privatisation, and a pliant workforce. Given that this has been the project of capital since the 70s, it does make you wonder when we've had a “business-unfriendly” government.

This theme was centre stage in a bizarre speech David Cameron gave to the bosses' union, the CBI, at the beginning of the week:

You know what the global race means because you’re living it.

And I’m here today to tell you this Government gets it.

We get that the world is breathing down our neck. And we get what British business needs.

Nothing new here, but the bizarre part came later:

When this country was at war in the 40s, Whitehall underwent a revolution.

Normal rules were circumvented. Convention was thrown out. As one historian put it, everything was thrown at the overriding purpose of beating Hitler.

Well, this country is in the economic equivalent of war today - and we need the same spirit.

We need to forget about crossing every ‘t’ and dotting every ‘i’ and we need to throw everything we’ve got at winning in this global race.

On the face of it, this is pretty odd. The economic war footing Britain actually had during the second world war involved a command economy, with a union general secretary becoming minister of labour. Neither of these things are likely to be what Cameron meant.

But the rhetoric of a war footing, and therefore the analogy that opponents of austerity are fifth columnists is likely to become more common. It is part of the ideological cover that is overlaying the most significant attack on working class living standards since WW2.

Living standards are already on the slide. The Office of National Statistics have published figures showing median real wages wages declining since 2007. According to the TUC:

and that is true, but only for the period before the global recession hit. Comparing wages in 2007 and 2011 (with the 2007 wages increased in line with 2011 prices),the median wage fell from £12.97 an hour to £12.62. For someone working a 35 hour week that is £12.25 – £637 a year.

As a proportion of their earnings, the losses have been worst for workers at the bottom of the income distribution. The chart below shows the fall in real wages as a percentage of workers’ 2007 wages, with workers arranged in percentiles (hundredths) from left to right:

Earlier in the year, the Resolution Foundation reported its predictions for deepening inequality, with living standards falling for low- and medium- income families for the rest of the decade. What is even more troubling about this is that the study is premised on very generous and optimistic growth forecasts. The indications from all quarters are that this is highly unlikely.

So, sliding living standards now, sliding living standards for the next eight years. This is the reality, and the political class want to intensify policies which will inevitable exacerbate the situation.

The striking political assumption throughout all this is that there will be no countervailing pressure from the workforce to push up wages. The Winter of Discontent famously stemmed from the Labour Government's attempts to impose a length pay freeze. However, that came at the crest of workers' militancy and union strength in Britain, and at the end of a long period during which trade unions' role in mediating a dangerous workforce was widely accepted. Now, despite strike levels being higher than the previous two decades, the working class is broadly disorganised and fragmented. That doesn't mean that victories are impossible: witness the IWW cleaners' recent success. What is clear is that the working class is in an increasingly dire position, and a class response to these attacks in an urgent necessity