New issue of the irregular workers' bulletin put together by users of the website, libcom.org focusing on the 2008 pay dispute over sub-inflation pay offers.
Tea Break 2 - local government strike, July 2008
Inflation: rising prices and the 2% pay ceiling
An analysis of the use of inflation to attack workers' conditions.
If the government were to announce that it was cutting the wages of all workers - public and private sector - there would presumably be uproar. And yet this is exactly what they have done by calling for ‘pay restraint’ and insisting all wage rises are capped at 2%. Make no mistake, a sub-inflation pay ‘rise’ is a pay cut. No amount of statistical trickery changes this simple fact.
The government’s own favoured measure of inflation, the Consumer Price Index (CPI) is currently running around 3.3%. However, this measure excludes mortgage repayments. Does that mean we don’t have to pay them back out of our falling wages? No such luck. The inflation measure that does include these payments is called the Retail Price Index (RPI). It is currently running at around 4.3%. So by the government’s own figures they are imposing a pay cut of over 2%.
However, the official figures don’t tell the whole story. Inflation is calculated by taking the average prices of a ‘typical basket of goods,’ including items from literally bread and butter through to digital radios and flat screen TVs. However, if prices of essentials are rising while prices of gadgets are falling – which they are at the moment, we simply spend more on essentials and less on luxuries, and our standard of living falls even though overall prices may appear quite stable. An attempt by The Telegraph to calculate a ‘Real Cost of Living Index’ (RCLI) taking into account rocketing food and energy costs puts cost of living inflation at 9.5%.
Of course, inflation is already being blamed on ‘greedy’ workers demanding they maintain – or heaven forbid improve! – their standards of living. This is despite the government and unions succeeding in holding down public sector pay claims last year (see Tea Break), and wages in the economy as a whole frequently failing to keep up with inflation over the past decade.
There is an irony here. Gordon Brown built his ‘prudent’ reputation by keeping wages down – and therefore profits up – while the economy grew. But a growing economy requires growing consumption. How are we to consume more if our wages aren’t keeping up? The ‘answer’ was cheap credit for all to plug the gap; essentially a pyramid scheme reliant on rising house prices. The government and employers were having their cake and eating it, while we got geared up to our eyeballs in credit card debt.
But now that the housing market has begun to fall and credit is beginning to dry up, their attempt to cheat at their own game has faltered and they’ve gone on the attack. But not daring to do this openly, they try to hide behind statistics and let inflation do their dirty work. Ultimately however, behind all the talk of the ‘credit crunch’ and rising oil prices, inflation is just the latest means being used to pursue a familiar end – employers always want us to do as much work as possible for as little pay as they can get away with (just consider unpaid overtime, understaffing, increasing workloads...).Therefore the only way to fight the current pay cuts is to fight for our own interests against theirs; regardless of the state of the economy our standard of living is only ever as low as we let them push it or as high as we can win through collective action.
Written for the Tea Break bulletin in July 2008.
Pay: what went wrong in 2007?
Libcom's analysis of what went wrong with the industrial disputes over the rising cost of living in 2007, and how to do things better in 2008.
A 'Summer of Discontent', Gordon Brown preaching pay restraint, union leaders talking about 'co-ordinated strike action', sound familiar? It should, because exactly the same things were being said last year. Despite some brave attempts in 2007, the working class suffered yet another profound defeat, unable to assert its own interests against both the bosses and their own trade unions - who did deals behind closed doors, ignored strike votes and dragged on consultations and negotiations for months.
Just like this year, 2007 started with a 2% cap on public sector pay rises This led to a wave of strikes, which while some were impressive, many were stopped before they even got started and most failed to make any gains on either pay or other issues. To reverse this trend, we need to understand previous failures and learn from them in order not to repeat the same mistakes over and over again.
In Royal Mail, strikes got off to a good start in July, rolling strikes and a work to rule caused a massive backlog, then later sparking wildcat strikes across Scotland and the North of England. As the second wave of official strikes was due to start, they were called off by the CWU leadership, entering 'meaningful negotiations' with Royal Mail management. These 'meaningful negotiations' lasted for weeks, came to no firm conclusion (except that measures would be forced through at a local level where it's easier to divide the workforce), and prepared the stage for a fresh assault on pensions this year. Strikers in Liverpool who had continued with unofficial action were left out on a limb - spending many days without pay as the CWU refused to release details of deals done for fear of a massive negative reaction from elsewhere - with the workforce in most places demobilised by a slow and agonising wait.
There were also strikes by 200,000 civil servants, significant local strikes by health and local government workers in Manchester, Glasgow and Birmingham, and in the public sector, official and unofficial strikes by thousands of workers at Grampian foods, Coca Cola, Heinz and smaller workplaces.
So with hundreds of thousands out on strike, and workers taking their own initiative in some sectors - how come this didn't lead to the 'pay inflation' we were warned about and so desperately need? Let's face it, pay inflation's about the only kind of inflation we don't have at the moment.
First we need to look at what was promised - coordinated strike action between public sector unions, 'prolonged and sustained strike action' on ballot literature. And what we got - strikes cancelled at the slightest hint of a deal, strike votes of 51% being rejected as not enough of a mandate (while this year 54% is a resounding mandate, maybe 3% really does make a big difference!), pay deals of 2.5% over one year being magicked into 5% over two years (or even less) - oh great! Despite all of us facing the same attacks on our wages, on our working conditions, on our weekly shopping bills - we're sliced up into a million separate issues, ballots and campaigns.
So how do we respond to this? Certainly not by appealing to the union leadership or the government! While the right wing press (pretty much all of the press), complains about Labour's close ties to the unions, they fail to mention the unions' close ties to labour - it's a short jump from trade union leader to cushy ministerial position or a fat pay check sitting on a QUANGO, and that's where their interests lie (since their wages go up regardless of whether ours do). Trying to replace leaders or 'democratise' the unions is another old game that was bankrupt even when union membership was a lot higher and a lot more militant - it either burns people out or catapults them into the same positions and compromises they attacked moments before.
What's needed is independent activity outside these structures - co-operation of workers across the boundaries of union, sector and the public/private divide. The bosses are simply continuing a coordinated attack that's been going on for decades - they're quite able to put on a united front when it comes to keeping wages down, hours long and prices high. But they're met with piecemeal resistance by workers divided by artificial boundaries and operating within a framework set entirely by the opposing side. Even a small number of workers can have a big effect if they're able to break out of these restrictions - taking their breaks, leaving on time, organising go-slows, producing leaflets, walking out in defence of colleagues who are being victimised - without waiting for people who've got no interest in our situation except its continuation to give them permission.