UNISON Active analysis: Inflation Up Again? That‘ll Be Public Sector Pay Cuts All Round

The inflation figures released by the Bank of England on Tuesday are a grim warning for all public sector workers. UNISONActive still believes that the only figure that counts is that for the retail price index, and the RPI has now hit 5.1 %. This figure is the measure of how much the prices of the goods that we all rely on are increasing- the increase in the price of housing, the price of food, the price of energy, the price of transport, whether in the increased costs for petrol or diesel or the increase in the price of public transport.

Mervyn King is only reporting what we already know. Every weekly shop, every train or bus journey, every electricity bill takes more out of the family wage. We really don’t need the official figures to confirm that.
As prices rise however, the reality of Tory policy kicks in for us.

With every rise in inflation, the public sector pay freeze means that our spending power, the money in our pockets is eroded further and further. Remember the saying “ Income 20 shillings, Expenditure 20 shillings and sixpence, result misery”? Except as public sector workers on a pay freeze as inflation rises, the difference between the wages and expenditure is rising steadily with the result that many in work would previously have qualified for benefits, but then they have been slashed as well. Rising inflation lowers our living standards, and certainly weakens demand in the economy.

In a climate where public services are being slashed and jobs cut, worries about job security are naturally at the top of the political agenda. But alongside the cuts agenda Tory strategy for recovery is to increase profitability by intensifying employment insecurity and suppress wage growth – the further redistribution of the social product from labour to capital over the next 5 years is actually set out in some of the Treasury’s recent projections and will have consequences beyond the public sector. The cuts and the wages freeze are part of the same agenda.

While Barclays Bank has announced the rise in average pay at Barclays Capital from £191,000 to £236,000, http://www.channel4.com/news/barclays-cuts-bonuses-as-profits-rise-to-6-1bn  Channel 4 news reports the “surprising” news that in Southern England, food banks, supplying free food have found that many of those applying are actually in work. The reporter describes how many in employment face bills that outstretch their income, resulting from decreasing hours of employment, loss of overtime or just simply low wages. http://blogs.channel4.com/gary-gibbon-on-politics/britain-in-2011-people-in-work-cant-feed-themselves/14579

As union members, decisions to fight for wage increases lie in our own hands. Both the NJC for England Wales and Northern Ireland and the SJC for Scotland have submitted pay claims. Health members await the results of the pay review. The crucial question we all have to answer is- when does the price of not fighting for a pay rise become too great?