Inflation down? So are wages - and they need to catch up!
Inflation fell from 4% in January, to 3.4% in February. It's still not down to the promised 2%, but nevertheless, Chancellor Jeremy Hunt and the Bank of England are patting themselves vigorously on the back, boasting that it's at its lowest level in over 2 years.
Hunt is so relieved that he even mentioned that the general election might be called in October... Perhaps he thinks that by then the state of the economy will be okay enough to save some Tory seats...
Food inflation is "just 5%", compared to 19.2% in March 2023. But this means that the cost of food has risen by nearly 25% since last year! And the working class knows it; supermarkets have continued to increase their prices. And it's not just food: water rates, mobile phone costs, broadband, insurance, energy... everything is (still) going up... Of course, it's a fact of capitalist life that year on year, the prices of almost all goods rise. Which is why workers need pay rises every year - and at least in proportion to cost-of-living increases.
But instead of getting these automatic pay rises, the working class is told that when inflation is "down", wage rises should go "down" too! On cue, the Bank of England board has announced that "stubborn growth in services' prices and wages", will push up inflation! If true, it should also admit that this is an insane system, which dictates that wages must always fall behind the cost of living!
In fact those 2- or 3-year pay deals negotiated last year on the basis that inflation would have fallen to 2% by now, mean precisely that. Worse, they mean cuts in real pay for the coming period - as if making ends meet was not difficult enough!
The independent watchdog, the so-called "Office for Budget Responsibility"(!) agrees: it says that real household (disposable!) incomes are still behind pre-pandemic peaks and won't recover until 2025-26... But will they ever?
Not so for MPs', incomes, of course. Last Friday they awarded themselves a 5.5% increase - a "good" 2.5% above inflation. From April, their basic pay will go up from £86,584 to £91,346! And they get all their expenses on top!
Sunak, on the other hand, gets a salary as PM on top of his MP's "wage", which gives him £139,477 - to add to his £1.8m income from dividends etc... But that's just chicken feed alongside his wife's assets (her billionaire father owns India's Infosys) - which mean they have £529m to share!
For good reason, therefore, strikes over pay continue - and there are more on the cards. Ford workers, for instance, were offered a below-inflation pay rise last November (2.5%) for the first time in their history! They've just voted for industrial action. And train drivers are still striking after a below-inflation offer last April. Right across the working class board, there is plenty of catching up to do! And why not organise to strike together?