Members of the National Union of Rail, Maritime and Transport Workers (RMT) are taking strike action over pay, conditions at work, and proposed redundancies. Predictably there has been a mainstream media fest of attacks on the striking union. We are told that many are being inconvenienced including students taking their exams, but what we’re not being told is that we have the highest personal tax in sixty years, the highest inflation in forty years, and a record number of people using foodbanks.
Meanwhile, the government is milking the strike for all it’s worth as a distraction from Boris Johnson’s #PartyGate crisis and the likely by-election losses in Wakefield and Tiverton on Thursday. Grant Shapps, who should be trying to resolve the strike, and could if he chose to, called the strike a stunt and refused to meet the RMT, even invoking the ghost of Harold Wilson to justify doing nothing.
All public sector workers are suffering
It’s not just the striking rail staff who are suffering from the cost of living crisis, all public sector workers are, including teachers and nurses, with some of the latter having to use food banks. Rising rents, fuel costs, energy bills and 9% inflation have produced a cost of living crisis which is hitting millions of workers very hard. So why isn’t the government giving workers a decent pay rise? The government and the Bank of England tell us that raising workers’ pay will push inflation higher but workers’ pay isn’t causing inflation. The main factors are: firstly, the fall in the value of the pound since Brexit has increased the cost of imports including fuel and other imported goods; secondly, energy and fuel costs have increased partly due to the Ukraine crisis but mainly due to profiteering by the fossil fuel companies. The impact of increasing pay will have little effect compared to these factors. As Richard Partington states in the Guardian:
“Despite the warnings of wages fuelling the inflationary fire, there is little sign of a wage-price spiral taking hold. The Bank of England reckons average pay growth across the economy, excluding bonuses, is between 4% and 6%. Although well in excess of pre-Covid rates, that is hardly shooting the lights out. With record job vacancies and unemployment the lowest in five decades – as well as the highest inflation for 40 years, which is heading to 11%, according to the Bank – it is perhaps more surprising wages haven’t spiralled significantly higher already.”
There is no money?
The other old excuse that the government gives us is that it can’t afford to raise public sector pay to meet workers’ needs – the old ‘there is no money’ argument. But this simply isn’t true. If the government were to give all public sector workers a decent pay rise of say 10%, most of that money would be returned to it. The reality is that the public sector pay rise will largely pay for itself. How? Because a significant percentage of that pay rise will be returned to the government through income tax and national insurance and, as the increased wages are spent and that money circulates around the economy, it is taxed further – it’s called the fiscal multiplier. For a fuller explanation of the affordability of public sector, pay rises see Richard J Murphy’s account here. The key point Murphy makes is that we can afford to pay for a decent pay rise for public sector workers without having to raise taxes.
Last October Boris Johnson told the Tory Party conference that Britain was on the path to a high-wage economy under his leadership. Not only is that not true but it’s likely that under his leadership the UK is heading for a recession. So much for levelling up. So, with the government’s mismanagement of the economy and indifference to workers’ struggles to put food on the table, it looks like we are facing a summer of discontent. We should get behind striking workers in the fight for a more equal society and a better economy for all.
*This article was first published in Critical Mass Magazine 0n 21/06/22
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