August 2014        

Demand grows for a living wage


The economic crisis that went global after Lehman Brothers collapsed in 2008 is not over, but the free-market system appears, for the time being at least, to have stabilised. Output is increasing while unemployment is falling in Britain, the United States, and even Spain. The euro has survived, and the global bourse is still rewarding those degenerates who manipulate world markets.
     There is nothing new in recognising the cyclical nature of market-driven economies; yet this phenomenon should remind us once again that we cannot wait passively for capitalism to oblige socialism and self-destruct.
     Many of the left-inspired initiatives launched in the wake of the 2008 crisis, while well intentioned, have withered away. Failure was usually due to the fact that these efforts concentrated either on making a moral criticism of the system or attempting to defend a single social issue. It would be churlish to criticise the many dedicated activists who campaigned against these injustices; but ultimately we have to calculate the effectiveness of their actions rather than the aspirations they entertained.
     All too often the left found itself on the back foot, trying to defend old achievements while rarely having the opportunity to advance fresh demands.
     Supported by its own powerful media and a plethora of right-wing ideologues masquerading as academics or civil servants, the masters of neo-liberalism were and are surrounded by a protective propaganda buffer. Their well-oiled publicity machines skilfully dismiss criticism, ostensibly offering a rationale for the harshest of cut-backs and the iniquitous division of wealth. While the layer of misinformation was and is far from being impenetrable, it nevertheless creates an effective barrier to all but the best-crafted critique and adequately supported actions.
     However, just as capitalism appears to be in the process of weathering its latest storm and regaining a certain superficial composure, signs are emerging that at its heart there is a deep-running lack of confidence among some of its most esteemed theoreticians. Central to their concern is the obvious fact that recovery is built upon reducing earnings and income for working people while simultaneously cutting back on the public services and goods often identified by trade unionists as the citizens’ social wage. The difficulty these economists see lies not necessarily in the misery resulting from such policies: what worries them is that a lack of purchasing power is leading to static or falling consumption, leaving the global economy gripped in a non-expansionary or stagnant trough.
     For some time now influential figures from the Keynesian school of economics, such as Paul Krugman and Joseph Stiglitz, have been critical of the fiscal policies being followed by OECD countries. They were considered “old-school,” and were tolerated somewhat indulgently.
     More recently, though, other pro-market economists have added their voices to the list of sceptics, and they are less easily dismissed. Even if we haven’t read it, most of us are aware of the latest work of the French economist Thomas Piketty, Capital in the Twenty-First Century. He caused a stir by undermining capitalism’s claim of an inherent effectiveness of markets to generate wealth equally across the board.
     Other prominent free-market economists are now adding their voices to a growing clamour to rethink the seemingly unshakable position held by economic movers and shakers since the beginning of the Thatcher-Reagan era. The British economist David Blanchflower, a former member of the Bank of England’s influential Monetary Policy Committee, wrote scathingly in the Independent (London) of British government policy. In his article he described the calamitous drop in living standards and real income levels experienced by a majority of Britain’s working people.¹ This has happened without pause since the present coalition government came into office, and this in spite of a growth in GDP and falling rates of unemployment.
     The Blanchflower article struck a chord when he identified a drop in real wages, which in many cases takes workers’ pay below the cost of living. Of course this issue is not confined to Britain. Labour’s share of income has been falling throughout the OECD countries (including Ireland) for several decades, but the impact was disguised until the economic crash of 2008.² Not any longer, though; and one positive outcome has been an increasing demand for adopting and implementing a living-wage policy.
     In Ireland the call for just such a policy not only has the powerful endorsement of the ICTU and its largest trade unions, SIPTU and Unite, but is supported by a number of well-regarded pressure groups advocating social justice. A report in the Irish Times on 4 July announced the launch of a living-wage campaign, mentioning that “one in six people living in poverty in Ireland has a job, a group often called the working poor.”³
     Achieving a living wage—as distinct from a minimum wage, which often becomes the maximum—is not an end in itself, no matter how welcome it would be for working people. Forcing capital to pay workers an acceptable income does not alter the fundamental property relationships that socialism understands to be essential.
     What the struggle for a living wage does do, nevertheless, is offer workers an opportunity to push back and regain some ground lost over the past years of retreat. In this instance there is not only support for the campaign from the union movement and agencies within civic society but there is the real advantage that capitalism’s ideologues are divided on the issue. In other words, momentum in this case favours workers.
     It is essential to ensure that the campaign does not become restricted or capped. A living wage is an ever-changing target and not a fixed figure. Nor should it be viewed as merely an amount in the pay packet: also included in the demand must be an acceptance of an inviolable social-wage element, guaranteeing all the communal and collective goods that a civilised society must provide, such as a home, health care, education, and daily amenities.
     It has to be recognised, of course, that there is no single panacea that will carry the day for working people. Campaigning in support of a living wage is just one step towards the eventual goal of a socialist society, but if properly supported it can nevertheless become an important step.
[TMK]

1. David Blanchflower, “You won’t hear the Chancellor boasting about the biggest drop in living standards since the war,” Independent (London), 20 July 2014.
2. See “Labour pains: All around the world, labour is losing out to capital,” Economist, 2 November 2013.
3. Carl O’Brien, “Campaigners call for ‘living wage’ of €11.45 an hour,” Irish Times, 4 July 2014.

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