Workers Lose Out Yet Again

UK workers have either had a pay freeze, pay cut or a very small rise in recent years, as the official chart shows above. As employers complained of hard times, workers had to be grateful for a job - for many that meant taking a pay cut or freeze back in 2009. By August 2010 the average pay increase was just 2%, still over 50% down on August 2008. Notice how the big bank bonuses made a return earlier this year, a further insult to UK workers who are being told they have to pay for the bankers crisis of 2008.




Now look at the UK inflation figures (pictured above) from the same period, you would expect that if workers pay increases slower, then prices for goods would rise slower. Instead we see prices rising at a faster pace, resulting in those workers who were lucky enough to even get a 2% wage increase in 2010 actually losing out. The millions of public sector workers are even worse off, as rising consumer goods would mean they were about 3% poorer. Women fare even worse as the Office of National Statistics show that clothing and footwear has increased 6.4%, a record rise in August and September 2010. The UK rate was 3.1 per cent whereas the EU’s as a whole was 2.0 per cent, meaning that UK shoppers were paying even  more overall than our European neighbours.

The markets and business leaders will be happy with these figures because it keeps workers pay down, resulting in higher profits for the company. This has not been fed back into the labour market - unemployment figures for 2010 prove this. Instead business leaders are paying off any debt while rates are so low, buying back shares and reducing total dividend payouts and many companies now have a cash surplus thanks in part to rising inflation and lower wages.

The UK government announced that Capital Gains Tax would be reduced to 28%, the lowest in Western Europe and the lowest rates ever for UK business. Yet it is ordinary workers who lose out as the markets just look after their own and seek to keep the working class down. Wealth will continue to remain in the hands of the few, instead of being distributed for the needs of society. Only an alternative to this capitalist culture can really make it a fairer world. A Socialist alternative would result in fair wages and a re-distribution of wealth as a planned economy takes shape. For more reading, visit:  http://www.socialistparty.org.uk/

*Both charts are from the UK Office of National Statistics