It’s time to back bigger wage demands
The price of maintaining a life in Britain in 2022 – what gets termed the ‘cost of living’ – is growing day by day.
This phenomenon is not new. Relative to the amount working people have received in wages, benefit payments, and public services in the broadest sense, life has been getting harder for a great many in the UK for at least a decade. What is new, however, is the pace and intensity with which the cost of living is climbing.
Over a decade and more of austerity, those working people who relied on public spending, whether as public sector workers, welfare recipients, or beneficiaries of public services, were told they had no choice. They were to make a sacrifice: their wellbeing, their future security, and in many cases their lives. All this, they were told, for the nation’s ‘financial health’.
This was a lie. But the lie managed to scrape together a fractious political coalition which laid the groundwork for twelve years and more of Tory rule.
Holding together this fractious coalition was no mean feat. In many respects it depended on the mounting supply of cheap consumer credit, and the concurrent expansion of household debt. In this way the UK became one of the most indebted countries in the world – but the debt was heaped onto households. In the absence of counter-cyclical spending to lift the country out of its malaise, or rising wages to fill pockets, this enabled some degree of cheap consumption to survive throughout the 2010s.
The political bargain – slow-to-non-existent wage growth offset by cheap credit – held for a portion of lower-middle class Britons and arguably helped to blunt arguments for higher wages.
Now, however, that unwritten contract between Britain’s political elite and the middle class is becoming unstable.
Most immediately, exogenous shocks have shifted the ground beneath our feet. The vertiginous rise in commodity prices driven by a combination of real shocks and speculative market behaviours is adding greater pressure to household budgets. Middle England’s side of the deal – that if wages don’t rise much then at least things won’t get wildly more expensive – can no longer be upheld.
More insidiously, there may be a kernel of truth at the heart of Rishi Sunak’s worst, most paranoid fears: the state’s response to Covid may have changed much. In reality, UK government policy was stingy at best and downright murderous at worst. When it did spend, it did so in an eye-wateringly stupid and expensive fashion that benefited the powerful while leaving the most oppressed out in the cold. Nonetheless, the public may have emerged from the experience with a different understanding of the state’s role in a time of emergency: a sense that it can and should intervene to shelter people from the very worst.
If this summary is accurate, then demands for higher wages to meet higher living costs could find an increasingly willing audience in the UK. The RPI rate of inflation in the 12 months to March 2022 was 9%, and given how unrepresentative official measures are, the real upward pressure on household expenditures is likely much greater. As more and more people are pulled by the forces of the market into positions of vulnerability, including many who previously considered themselves to be financially secure, this audience will grow larger and broader with each passing week.
Bosses across all sectors, but especially in the public sector and adjacent workplaces, have enjoyed ten years of making lowball offers for pay adjustments. This year they may not have it so easy.
This hypothesis is being borne out, gradually. Many workers are stepping up to the mark and making pay claims that match or exceed official measures of consumer inflation. This is especially the case in segments of the labour market where more specialised workers can leverage their relative scarcity: HGV drivers, for example, continue to make this count by winning super-inflationary pay raises amid fierce competition for their labour. Refuse and waste management workers across the board are engaging in a wave of industrial action, and frequently having success. Rail workers, organised effectively by the strike-ready RMT, are making their own crucial position in the economy count, and aiming to organise and in-house ever greater portions of the transport workforce.
Importantly, however, support for such pay claims may also be growing not only among workers but also the communities around them. Unite’s long-running dispute with Coventry council’s Labour administration is a case in point. Contrary to the managers’ hopes and expectations, public sympathies are with the striking bin workers and their demands for a fair pay settlement. Unite’s polling conducted by Survation, published on Sunday 1st May, testifies to this in resplendent detail.
The apparent conclusion? Pay is political again, and for a greater proportion of the UK’s population than it has been for many years. More people are willing to entertain and fight for bigger raises.
For political parties and attendant gaggles of wags and pundits, meanwhile, there are decisions to be made. Ten years and more of moderate price inflation, combined with a social policy of cutting off wage claims at the knees, have imprinted on many commentators a self-conscious desire to limit the imagination. Even self-described progressives have been caught in this trap: readers will recall Labour’s reticence to support a serious living wage increase before the 2015 general election, before George Osborne co-opted the living wage brand for his own minimum wage policy.
If there was ever an argument for moderation along these lines – something I would not agree to in any case – that argument has surely lost its purchase. The public mood may well have left it behind. The question for progressives especially is whether they will realise this and meet the public desire for greater wage demands across the board; or misjudge the mood, and trip over in their desire to appear ‘moderate’? So far, the picture is mixed.
Everybody loves to watch price inflation. In every wage negotiation workers’ representatives and bosses are wont to take their own measure of the ‘real’ increase in the cost of living. This is, always and everywhere, a political endeavour. For bosses, it is an attempt to lower expectations. For workers, an opportunity to galvanise and raise them. In each case, there is often a desire to index the essentially political claim for a bigger slice of the pie, to a ‘real’, ‘accurate’, or ‘scientific’ measure of what can and should be paid to a worker.
There are groups that have elevated this project into an art form. The Living Wage Foundation, for example, has embarked on a drive to make itself the gold standard for measuring ‘real living costs’. Its calculations are, of course, no less political. After all, the Foundation’s purpose is to make paying their Living Wage and seeking their accreditation desirable from a business-case point of view. In search of this, their calculations are largely concerned with the requirements the average household might have, in order to subsist.
But the response of any worker to this process could and should be: why should I merely subsist? The darker response of a boss would equally be to question why workers cannot subsist, reproduce and raise the next generation on slightly less. Ultimately, workers and bosses will have differing and often irreconcilable estimations of how much they are entitled to, as workers and owners respectively.
The moment these questions are posed, and pondered, the fiction of an ‘apolitical’ calculation of the living wage melts away.
It is beginning to appear that a growing proportion of the UK’s working people estimate their entitlements – to pay, to financial security and economic reward – more highly than they have for some time.
The task facing progressives is to make a case that engages and inflames these desires, mobilising them in support of our emancipatory political programmes. Underestimating working people’s desires for a real redress in wage levels could turn out to be an unforgivable mistake.
For its part, the Green Party of England and Wales approaches this task from an enviable position. The party has prominently pushed for policies that would alleviate some of the worst increases to household costs, as well as mitigating our impacts on the environment. Proposals for mass, publicly-funded and coordinated home insulation epitomise this approach.
Such policies are vital, not only to address the medium-term factors driving increases in the cost of living such as energy costs, but also to change popular impressions of what is needed to make material improvements to working class living conditions in an era of mounting climate breakdown.
The party has also shown signs of supporting some major pay campaigns. Among these, we find the campaign for a 15% pay claim for NHS workers which stumbled in 2021. Additionally, the party’s Autumn Conference the same year voted overwhelmingly to back the Bakers, Food and Allied Workers Union (BFAWU) campaign for a £15 minimum wage for workers of all ages. These motions seem almost tailor-made for the political economy of Britain in 2022.
Nevertheless, there has been some hesitance to promote these policies. While raising the minimum wage to £15 per hour is wildly popular with the British public, including habitual voters of all major parties, some in the Green Party have preferred to promote the figure of £12 per hour in its stead. The most recent example of this fell, rather unfortunately, on International Workers’ Day.
Leaving to one side procedural questions – regarding what discretion is and is not afforded to Green Party channels, or which policy statement supersedes another – this tendency in external communications is puzzling to say the least. The £12 figure is derived chiefly from the party’s general election manifesto in December 2019. Since that campaign, almost 29 months have passed. In May 2022, we find ourselves in an inflationary environment that is torching working class living standards. Both £12 and £15 are conveniently round figures, made for campaigning; but even if we indulge for one moment the fiction that living wage claims are ‘scientific’ matters for sober calculation, it is difficult to see any case for retaining a lower figure that is worth less and less with every passing week.
Of course, the reality is that these figures are inherently political. The choice of which figure to promote, too, is a political one. It is increasingly reduced to a choice between backing the demands of the most confident, militant unions on the one hand; and selecting a somewhat lower figure in an attempt to appear ‘sensible’, ‘temperate’, or ‘reasonable’.
Ironically, it is almost certain that the Green Party will eagerly support a £15 per hour minimum wage – at least at some point in time. After all, should they persist, rates of consumer price inflation will rapidly make £12 per hour feel less and less significant in the hands of UK workers. Soon the day could arrive when £15 per hour is needed not to improve living standards, but to keep them steady. The question is not if, but when: will the party back £15 now, when it satisfies the public appetite for a real raising of wage levels after decades of stagnation? Or will the party endorse it much later when it represents not so much a raise as a catching-up, bare-minimum adjustment to keep the poorest from absolute penury?
There is growing public desire for serious increases in pay for all, including for workers on and immediate above minimum wage levels. The task is to meet this desire and satisfy it, becoming the vanguard and political representative of this rising tide of feeling. It is not clear, from any vantage point, that sticking with a figure from late 2019 will do the job. This is especially the case when workers, such as striking cleaners on trains across the south of England, are making £15 per hour a signature demand.
There is a substantial risk, too, in dropping £15 now: not only of appearing to overwhelmingly back one thing in front of our conference attendees and trade union comrades, and another thing when questioned by journalists; but also risk of failing to meet, agitate, and inflame the public mood of the moment.
Meanwhile, numerous opponents in their paranoid fear of worker power are already getting to their ideological work, urging tightfisted fiscal restraint and monetary tightening. The most blunt and honest among them have ventured to say out loud what other neoliberals are thinking: the Bank of England is “duty bound” to prompt a recession, loosen the labour market and destroy workers’ bargaining power in a maniacal attempt to reduce inflation. Never mind that the causes of recent inflation are not wage levels – which have hardly been in an upward spiral – but rather supply shocks and other environmental factors. The costs of inflation to asset owners and bondholders must be paid, as before, by workers.
Now, the Bank of England has raised interest rates in a reflex response to the crisis, and predicts recession over the next two years at least. As heterodox economists including former John McDonnell advisor James Meadway have suggested, the Bank of England’s semi-fictive independence since 1997 has led it down a cul-de-sac of rate changes, apparently for lack of other ideas.
These noxious ideas must be addressed head-on, before a destructive mindset is allowed to vandalise our collective wellbeing. Workers do not need to pay for this crisis, all while super-profits are protected. But to win this argument, we need to be prepared to support ambitious wage claims across the economy. The prize we stand to win is not only the means to address this spike in living costs, but also to obtain redress for a generation of wage stagnation, and take back for labour a greater share of what it produces.
Now is the time to embrace bigger wage claims across the lower reaches of the wage distribution, and empower workers to make more of them. There are worse places to start than by promoting one of the most popular policies – the £15 minimum wage – in full voice.
Matthew Hull is chair of the Green Party Trade Union Group
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Image Credit: War On Want – Creative Commons