Attack on living standards intensifies

Share and commodity prices are soaring as speculators endorse the global assault on living standards by corporations and governments.

Raising the VAT rate in Britain to 20% - its highest ever - comes as prices are rising out of control, further undermining the value of wages, salaries, pensions and benefits. The lower your income, the more badly affected you will be.

If the private sector employs any of the hundreds of thousands of workers now on their way out of public sector jobs it’ll be at much lower wages, with poorer working conditions and without pensions.

They’ll be in good company. Workers throughout the world are being forced to work harder for less money, whilst unemployment has soared, according to Wage Policies in Times of Crisis, a new report from the International Labour Organisation.

Since the crisis erupted in 2007 and 2009, the world’s 1.4 billion salaried workers have suffered a decline in wage growth - unlike the stratospheric bonuses enjoyed by traders on the global financial markets.

Across the world, real wage growth slowed from 2.2% in 2007 to 0.8% in 2008 and 0.7% in 2009. But real wages – taking inflation into account – actually fell in 12 of 28 industrialised countries in 2008 including Australia (-0.9%), Germany (-0.4%), Italy (-0.7%), Japan (1.9%), Mexico (-2.6%), S. Korea (-1.5%) and the US (-1.0%).

In 2009, real wages fell further in Germany (-0.4%), Mexico (-5.0%), Japan (-1.9%), and S. Korea (-3.3%), whilst workers in France (-0.8%), the U.K (-0.5%), and Russia (-3.5%), also saw wages fall. Wage cuts hit workers in Hungary, Thailand, the Philippines, Malaysia, Jamaica, Botswana, Bahrain, the West Bank and Gaza. Among the worst affected were those in the Ukraine, where wages fell by 8%.

In the decades leading up to the crash, though wages increased, workers had to work far harder for their money, and received a declining share of the value they added. During the debt-fuelled growth of powerful global corporations from 1980, the share of value added by factory workers that came back to them in wages fell in most countries.

Wage growth lagged far behind productivity increases in most countries of the world, but particularly the industrialised countries. In the US, for example, between 2000 and 2009, labour productivity grew by 13%, whereas real average wages grew by only 2.2%. In Korea, whilst real wage growth was much stronger – at 18.3% between 2000 and 2009 – it was still way below the growth in labour productivity of 27.4%.

With the global economy in recession, the attacks on wages are certain to accelerate as corporations and governments pursue the cause of profit. Computer manufacturer Dell, for example, is moving operations inland in China in search of even cheaper labour.

Price rises are eroding wages even faster. In Britain, food costs have risen 5.5% over the past 12 months, outpacing the overall inflation rate of 3.3%. Wheat prices have just reached record levels, which is forecast to increase the price of a loaf of bread.

Unemployment is soaring, with the jobless total over reaching 210 million worldwide, adding to the pressure on wages. The GMB union today forecast that 200,000 jobs would be culled between now and April as a result of cuts in local authority spending.

With many US states including California, the eighth largest economy in the world, joining much of Europe on the edge of a new financial meltdown, the prospects for a “return to growth” in the capitalist system look remote. What is certain, however, is that the exploitation of working people in every country will increase day by day.

Gerry Gold
Economics editor

Community 'gang-masters' heading your way

Even as local authorities were digesting the destructive impact of the Cameron-Clegg Coalition’s savage assault on their funding, it was revealed that the government is hard at work preparing plans to deal with a sharp downturn in 2011.

These plans will have been given added urgency by the latest uunemployment figures, showing the total without jobs in the UK rose by 35,000 to 2.5 million in the three months to October – the first increase since the spring.

In a surprise for the many economists deluded by self-created dreams of recovery, the private sector failed to create enough jobs to offset those that are starting to be lost in the public sector as the cuts begin to bite.

The jobless rate rose to 7.9 per cent of the workforce, up from 7.7 per cent in the three months to September and taking it close to the 8 per cent peak seen in the first quarter. Unemployment among 16-24 year-olds rose by 28,000 to 943,000, a rate of 19.8 per cent, one in five, and close to the record set last year.

As the latest round of cuts begin to take effect, threatening a further 100,000 jobs in the next few months, research by homeless charity Shelter shows that almost a million households are already in arrears with their rent or mortgage, twice as many as a year ago.

According to Campbell Robb, Shelter’s chief executive: “Every two minutes someone faces the nightmare of losing their home and this research paints a disturbing picture of sharply rising numbers of people who face a daily struggle just to keep a roof over their head.

“We know from the cases we see every day that just one single thing, like a bout of illness, rent increase or drop in income, is all that’s needed to push people into spiral of debt and arrears that can lead to the loss of their home. With tough times ahead and homelessness already on the rise, we’re extremely concerned that this could be the beginning of a surge in the numbers of people losing their homes next year.”

Publication of the Localism Bill provides a clearer view of the government’s direction as it cuts revenue for local authorities, abandons services like housing, education, libraries, social care, focuses on channeling declining tax revenues into restoring the profitability of the banking and finance sector.

Whilst community-run enterprises across the country are already filling some of the void left by Post Office and pub closures, the Bill suggests that this can be scaled up to take on libraries, schools and social care. But the reality is that surviving local services will increasingly be passed into the control of for-profit corporations, be staffed by unpaid volunteers or fall apart altogether.

What the Coalition is really envisaging was revealed in the startling results of a consultation with business leaders participating in the Prince of Wales Business in the Community charity. As well as urging the government to eliminate the checks that prevent unsuitable people volunteering, they asked the government to help them promote the idea of “brokers” on the ground in communities to establish connections between companies and voluntary organisations.

Pretty soon, if the Coalition’s friends and sponsors have their way, those in need will have to depend on profitable paid-for services like the already privatised home care. They’ll be staffed by low-paid workers managed by well-paid “brokers” or “connectors” employed by Sainsbury’s, Tesco or even the global financial conglomerate UBS.

It’ll be just a “community” version of the gang masters who organise people-trafficked cheap labour to pick and pack vegetables, but dressed up in the comforting Big Society newspeak.

The Localism Bill expects communities to pick up the pieces as the Coalition destroys the last vestiges of the welfare state to protect the capitalist economy. Expect no opposition from local councillors, especially those in Ed Miliband's party. They plan to make the cuts as instructed.

Communities should seize the initiative and form networks of Peoples’ Assemblies which can take over the resources owned by shareholders and run for profit and turn them into not-for-profit enterprises that will serve local people’s needs. The alternative is a bleak wasteland of broken services and mass unemployment.

Gerry Gold
Economic editor

Student revolt shows state in turmoil

The continuing wave of student protests against increased fees and education cuts is highlighting a deepening crisis within the British state, one that presents opportunities as well as threats.

Plans for more demonstrations, including today’s against the abolition of the education maintenance allowance, show the real concern not only of students but also parents and teachers about how education is increasingly run along business lines.

It has emerged that Metropolitan Police Commissioner Sir Paul Stephenson almost quit over the incident last Thursday when Prince Charles and Camilla’s vehicle came under attack from protesters. The episode made it evident that 3,000 officers failed to seal off streets in central London, once demonstrators had got wise to their kettling tactics.

Stephenson and his ilk are still smarting from being caught off their guard by protesters at Tory party headquarters in Millbank Tower during the protest organised by the National Union of Students last month. In revenge attacks for November, last Thursday’s operations saw massed ranks of police deployed around Parliament Square.

A police cavalry charge was used as a terror tactic. Police used truncheons indiscriminately on defenceless students such as 20-year-old Alfie Meadows, who is recovering from a three-hour brain operation. Officers pulled Jody McIntyre, who suffers from cerebral palsy, from his wheelchair. So far around 180 people have been arrested and the Met is preparing criminal prosecutions against them.

So now Home Secretary Theresa May says she does not exclude the possibility of the police deploying water cannon to curb further student protests. Recent citizen protests in Stuttgart saw serious injuries as a result of their use. That won’t bother the Coalition and no doubt tear gas and para-military riot units won’t be far behind.
Behind the continuing protest movement there is a deeper current of disaffection.

Today’s publication of the British Social Attitudes Survey shows that trust in politicians has reached an all-time low.

This groundswell of distrust indicates that there is a breakdown in the relationship between the state and the mass of the population, especially young people. This is fuelling their evident desire to go beyond and outside the worn-out parliamentary channels of protest and pressure politics.

In doing so they are moving politically ahead the mass of workers who are being held back by the Labour Party and trade union bureaucrats. Young people are not as trapped the those who seek to place a safe cap on things and keep the status quo. They are not hanging around for the feeble stroll around the park being organised by the Trades Union Congress in over three months time.

But today local councils up and down the country are being told how much to cut - how many jobs and services are to disappear, leaving a trail of devastation and misery. Most councillors – whatever their political affiliation – will be voting through the cuts. Ordinary people, not only public service workers, will now be drawn into a wider movement.

So the urgent issue is to continue to explore and develop new political forms outside and beyond local government, the conservative trade union leadership and parliament.

Last Friday a student meeting at the London School of Economics, called to discuss the way forward in the battle against education cuts, proposed that assemblies should embrace not only the national student movement, but also those fighting against the cuts more widely.

And the momentum for building People's Asssemblies took a step forward at the “Liberation beyond resistance” meeting in London on Saturday. There was a wide-ranging discussion on the nature and purpose of People's Assemblies and many proposals made for concrete actions in 2011. Assemblies have the potential to challenge the state for power itself in order to create a truly democratic society, in terms of politics and the control of resources. They are the way to go in 2011.

Corinna Lotz
A World to Win secretary