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Nye Bevan wasn’t far off the mark when he said: “No amount of cajolery, and no attempts at ethical or social seduction, can eradicate from my heart a deep burning hatred for the Tory Party. So far as I am concerned they are lower than vermin.”

On Tuesday (January 8), the Conservative and Liberal Democrat coalition took another step in their ideological assault on Britain’s welfare state, capping benefit rises to 1% a year. Having run a shameless, but ultimately successful, misinformation campaign to pitch those in work against the unemployed, the Welfare Reform Bill was passed through parliament against the feeble and unprincipled opposition of the Labour Party.

Despite the spectacle of a front-bench of millionaires, many of whom inherited their wealth, laughing and sneering as the bill passed through parliament, the move will enjoy a certain level of support among working people. Almost everyone has been subjected to a friend or colleague decrying fictional neighbours who live in mansions and drive BMWs, despite never having worked a day in their lives. This false consciousness, which sees low-paid working people direct their ire at the unemployed, is widespread. It’s a convenient distraction for bosses who refuse to pay workers a decent wage. One woman, interviewed by Channel Four news on the night of the vote, complained that she had not seen a pay rise “in years”. “Why should they [the unemployed] get more?” she asked. The fact that she didn’t criticise her boss is indicative of how deeply ingrained this attitude is.

What is rarely mentioned by politicians and media figures is that the vast majority spent of benefits goes to people who are in work. Indeed, more than 60% of people affected by Tuesday’s benefits cut have a job. Research carried out by the British TUC confirmed this and showed that those who tend to complain most about benefits are usually the least informed on the subject. It was found that on average people believe that 41 per cent of the welfare budget goes on benefits to unemployed people. The actual figure is 3 per cent. It also found that benefit fraud amounts to a mere 0.7% of the welfare budget. The £1 billion which the state loses due to benefit fraud is a small matter when compared with the £70 billion which goes missing as a result of rich people evading their taxes.

A vast array of vocabulary now occupies the airwaves in any discussion about welfare. “Cheats”, “scroungers” and “workshy” are among the terms used to dehumanise those who cannot be accommodated by the capitalist system. “Skivers and strivers”, the most recent terms used by the Con-Dem government, are particularly disturbing and insulting.

That a media campaign orchestrated by a gang of millionaires has had such a resonance among working people is more than depressing. Stoking up bitterness among those in work against the unemployed is part of an on-going and deliberate effort by the Conservative Party to divide our class; private sector against public sector; union against non-union; immigrant against native; young against old. The anti-welfare crusade has even instilled a sense of shame among those who legitimately claim benefits. Sarah Teather, one of the few Lib Dem MPs who voted against the bill, said:

“People who come to my constituency office these days for help with some kind of error in their benefits often spend the first few minutes trying to justify their worth. They usually begin by trying to explain their history of working and that they have paid tax. They are desperate to get over the point that they are not like other benefit claimants – they are not a scrounger. It is perhaps a feature of the way in which the term ‘scroungers’ has become so pervasive in social consciousness that even those on benefits do not attempt to debunk the entire category, only to excuse themselves from the label.”

Along with the insistence that some poor people are “deserving” and others “undeserving”, we are expected to believe that the less well-off will only work harder when they are given less money while the wealthy will only work hard if they are given more money. The rich are well aware of the existence and importance of class, despite their claims to the contrary. In attacking wages, social security and working conditions, they are waging a class war against the vast majority. It is no mere coincidence that those who opposed the creation of the welfare state in the first place are now attempting to dismantle it, without even the semblance of a mandate.

The problem is not with the benefits system; the problem is an economic system which consistently fails to provide employment or hope to a significant section of the population. Globally, there is a lot of work which humanity needs to carry out. Investment in alternative energy sources should be a pressing concern, along with an expansion of social housing and improvement of the public transport system. Yet, with all this necessary work needing to be done, the capitalist system has consigned more than 200 million people around the world into enforced idleness.

Our class squabbling amongst each other has given a free pass to those seeking to undo the gains made by the labour movement over the past 60 years. The NHS is being privatised, social security is being decimated and living standards for working people are falling. We all need to realise that attacking the living standards of others, whether unemployed or public sector workers, will not improve our own lot. We need to unite and we need to organise.

This article was published in The Morning Star

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The news that RBS chief Steven Hester has turned down his obscene £1 million bonus has been welcomed by all shades of political opinion. “Banker bashing” has transcended the narrow boundaries of the left and is now part of mainstream discourse, with even millionaire David Cameron spouting populist rhetoric attacking certain behaviour in the City. Mr Hester, however, will have little difficulty getting by on his modest salary of £1.2 million. Perhaps this is the “restraint” that David Cameron is referring to when he harps on about “moral” capitalism.

It might well feel good to attack the activities of “reckless bankers”. However, the problems inherent in the economic system we currently live under run far deeper than that. Certainly, lending huge amounts of money to people who could never afford to pay it back and subsequently selling that debt on to other financial institutions is irresponsible, but this does not address what it is that is wrong at the very core of capitalism.

One glaring absence in most public debates about the economy is the key issue of what actually caused the current crisis. It’s almost taboo to highlight the fact that wages in general have been stagnating since 1980. With the advent of Thatcherism/Reaganism, the assault on organised labour became ever more intense. The defeat of the British miners and American air traffic controllers in the 1980s marked the beginning of the decline of the trade union movement in the two countries. This was mirrored across the world, not least here in Ireland. These anti-union assaults heralded the birth of the most modern form of capitalism; neo-liberalism.

Trade union membership in the UK peaked in 1979, with just over 12 million members. This number has fallen year on year since the beginning of Margaret Thatcher’s deliberate destruction of the British manufacturing industry. Today, just over 6 million UK workers are unionised. The picture in Ireland shows a similar trend. Irish trade union membership peaked in 1980, claiming 62% of the country’s workforce. In 2010, just before the Troika’s “bailout”, less than 25% of Irish workers were in a union. Young people, especially, are less likely to even know what a union is, let alone join one.

The effect decreasing union membership has had on society was entirely predictable; wages fell in real terms and working conditions deteriorated. Last week, a TUC report revealed a number of startling findings. The main one was this; had wages grown at the same rate that the economy was growing over the past three decades, workers in the UK would be collectively earning £60 billion more than they are earning today. The TUC’s Touchstone Blog has a very useful tool on its site called the ‘Incomes Tracker’, which all workers might want to have a look at. It helps put this great robbery into perspective. Say you are earning £21,000 per year. Had your wage risen at the same rate the economy was growing (and remember, workers create all wealth in any economy) you would be taking home a handsome annual salary of more than £32,000. Or, if you are taking home a modest wage of £14,000; you would actually be on a wage of £24,000 had your wages grown in line with the wider economy.

When the economy was growing, the rich were increasing their income accordingly. However, those who were actually working and producing things to make the economy grow received nothing extra for their labour. Despite becoming more productive, workers’ income stayed the same. In many cases, wages actually decreased in real terms. In the US, this reached extraordinary levels. Between 1979 and 2007, the richest 1% of Americans increased their income by 275%. In contrast, the bottom 20% increased their income over the same period by a mere 20%. While some union activists were preaching class war, the ruling class were busy practicing it.

And don’t think for a minute that the pain is now being shared out proportionally just because there is a recession; far from it. Last year the income of the directors of the top 100 companies in the UK increased by 43%. The thousand richest people in the UK fared even better. According to the Times Rich List the total wealth owned by this group of people has increased by 53% since 2009. They now own a combined wealth of more than £400 billion.

It’s increasingly likely that this deep inequality will lead to social catastrophe. There has been only one other period in modern history when inequality was as great as it is now; the decade immediately before the Great Depression.

The race to attack the incomes of workers highlights the sheer irrationality of capitalism. When wages are repressed, demand collapses, as the working class as a whole are unable to buy back to goods it collectively produces. This leads to millions of useful products rotting unsold in warehouses and factories. This is known as a crisis of overproduction. The solution of the capitalist class to overcome this problem is an inherently unstable one; pumping out credit. Instead of raising the income of those who create the products they want to sell, the capitalist class encourage workers to obtain credit cards and stack up mountains of personal debt. Rather than actually overcoming it, the best capitalism can offer is the postponement of a crisis. With personal, commercial and public debt all spiralling upwards over the past three decades, it was only a matter of time before this system collapsed.

However, things are likely to get worse. A lot worse. The internationally coordinated attacks on wages and working conditions, coupled with the destruction of the old social democratic welfare states, will cause consumer demand to collapse. This will lead to a vicious cycle of ever more job losses and company closures, which will collapse demand still further. Even Mervyn King, the Governor of the Bank Of England, has warned of the coming depression being worse than the 1930s. The coming years will see thousands defaulting on personal debts. House repossessions will become more common as people struggle to meet ruinous mortgage payments. The Euro is also on the verge of collapse, with some countries veering towards default. The fact is, the crisis of 2008 was merely a forerunner of a larger crisis about to come.

Tumultuous historical periods such as the current one often witness great calamity. In times like these, the stupidity of those in power should not be underestimated. Just look at the political response to the crisis. Almost all commentators are calling on governments to “get the economy growing again”, regardless of the impact perpetual growth will have on this planet’s fragile environment. We also hear politicians urging the banks to “start lending again” without questioning why we need to run an economy built upon colossal amounts of debt. And the best our geniuses in Stormont can come up with is a proposal to reduce corporation tax.

Despite the frantic efforts of the world’s leaders, no solution will be found to this crisis within the current economic structures. A radical reorganisation of society is the very least that is required to guarantee a decent standard of living for every human being on this planet. Anything less will bring us back to the conditions of the 1930s.