Fight inflation – for a sliding scale of wages!

12 December 2021

For a 1% increase in wages for every 1% increase in prices

By Jeremy Dewar

Once again, the bosses are using inflation to swindle workers out of their wages. By raising prices, the capitalists pass on higher costs of raw materials and energy to their customers. Across the economy as a whole, this raises the cost of living and so erodes wages – and any increases we can win!

Workers are well aware of such ‘real-terms pay cuts’. Union officials do put forward claims taking inflation into account, but generally underestimate the real rise in the cost of workers’ living. Worse still, they fail to build in protection from future inflation, hoping to strike a compromise with employers.

Recently, in October, the RMT and Unite on ScotRail settled for 2.2%. This was based on the inflation figures in July, but by October this translated into a real pay cut.

There are two problems. 

First, unions take the official inflation figures as the starting point but the Consumer Price Index (4.2% October 2021, up from 3.1% in September) has a built-in bias against workers, mainly because it leaves out housing costs at a time of spiralling rents.  The Retail Price Index (6% and 4.9% respectively) which Unite has started using, does include mortgage payments but not rent rises, so also falls short, particularly for low paid workers. Food, energy, transport, housing, taxes (Council and National Insurance) are all seeing outrageous price hikes, energy by several hundred percent. 

Worse, workers get locked into a deal while bosses are free to hit back with further price rises. In fact, this is what the Bank of England predicts. Over the next 12 months, or longer if unions are foolish enough to sign multi-year deals, any gains will be eroded again.

To combat this, workers need to demand what some call an escalator clause – or what socialists call a sliding scale of wages – so that every rise in the real cost of living leads to a rise in wages. To avoid the swindle of the official inflation rates, unions need to set up price watch committees which can calculate all increases in their members’ actual living costs. Yes, this means keeping our rank-and-file committees active, but in conditions where the attack on our living standards is constant, so must be our vigilance.

Similarly, local committees of delegates from local workplaces, estates, and other community groups can monitor the cost of living and demand employers and the government index the minimum wage, benefits and pensions to inflation.

To win such demands – the only way of stopping inflation robbing our incomes – will take a militant struggle.  Bosses will resist any restrictions on their ability to protect their profits by passing on costs through higher prices, even more so because victory would mean inroads into their control of production, putting elements of it in the hands of workers. 

Winning unions to militant, all-out strikes, despite the anti-union laws, is notoriously difficult. But, when workers are presented with the facts and see a will to win in their leaders, they can and do fight long and courageous battles. Such leadership, however, is usually lacking – the decisive blockage is the union bureaucracy itself.

That is why strike committees, elected by the workers in dispute, whatever their union, are crucial. By linking up nationally, or across sectors, these can fight not only to control the claims but also every aspect of the struggle: picket lines, strike dates, negotiations, welfare, solidarity… 

The vast majority of the well-paid officials hate the prospect of this because it threatens their role in negotiating compromises within capitalism. What workers need, however, is to maintain and improve their living standards, regardless of whether that encroaches on the rights of management to manage, of capital to rule.

In short, the fight for the correct tactics in the strike must also be a fight for control of the unions. A rank and file movement, in the tradition of the Militant Minority Movement of the early 1920s, has to be built.

Revolutionary Marxists call these tactics – price watch committees, sliding scale of wages, rank and file movement – transitional demands. Central to all of them is the fight for workers’ control over wages and conditions and over the union itself.

On their own, they are not an end in themselves. To be really effective, such demands have to be linked to others, because each time the workers gain control over part of production, part of the economy, part of society, the bosses will attempt to claw that control back.  

‘We can’t pay!’ they’ll declare. Workers should answer, ‘Open the books and bank accounts to workers’ inspection.’ If they are indeed ‘bankrupt’, then their remaining assets should go to the workers whose labour created them, not to shareholders who have been living high on the profits for years. When the employers launch swingeing job cuts, workers will have to demand a four-day week with no loss of pay to spread the work around or, more radically, sharing out the work with no loss of pay. And so on.

Workers’ control really represents ‘dual power’ in the workplace – between the workers’ representatives on the one side and the bosses’ management on the other. This is not the so-called ‘co-management’ that exists in Germany or the workers’ representation that was tried in British Leyland in the 1970s. Such agreements just draw workers’ representatives into taking responsibility for the viability of the company. That easily becomes ensuring profitability, ‘more efficient’ production, even jointly unloading redundancies or wage cuts onto the backs of the workforce with the aid of union leaders. 

Workers’ control can start in a few workplaces but will be quickly rolled back if it does not spread throughout industry and society, in the form of workers’ councils.  At that point the question would be posed, who will rule society, the workers or the capitalists? 

Workers’ control is a great step forward, allowing workers to take part in running their workplaces and society, but it is only the first step. It poses the need for complete workers’ management, nationalisation without any compensation to the capitalist parasites, and democratic planning of production for need, not greed. The struggle will either end in revolution or counter-revolution. 

Wage disputes, like all partial struggles, are thus schools for a future revolution, and the rank and file bodies they can throw up at their highest point are the embryo of the new society that can abolish private property for good.

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