They call it "pay restraint". posted by Richard Seymour

The coverage of the government's pay cuts across the public sector has pretty uniformly accepted the neoliberal case that it is about controlling inflation. And while public sector workers are 'valued' in a sentimental fashion, the general implication is that union leaders should shut their mouths and accept a period of belt-tightening in order to keep Brown's 'Miracle Gro' economy afloat. The fact that the coppers are now receiving high-priority and largely sympathetic discussion in most of the UK media doesn't alter this general tendency, since the argument is simply reformulated - yes, we must tackle inflation, but the police are a 'special case'. So, there are grumblings about illegal strike action. Now, they're not everyone's cup of tea, but I think we can cut a deal with the coppers. Put it like this: you don't bust up our illegal picket lines, and we won't bust up yours.

Predictably, there is a sizeable hunk of hypocrisy in the arguments about pay cuts. For, average executive pay is roughly 714% of the average wage in the UK. Inflation busting pay rises are the norm for the ruling class (as are bounteous pension pots). It's what they expect after all the hard work we've put in on their behalf. The government has plenty of measures at its disposal for restraining income among the owners: higher-rate income taxes, corporation taxes, windfall taxes, inheritance taxes etc. Yet, these are exactly the taxes that the government either freezes or cuts to ribbons, while driving up taxes on purchases, whose burden is disproportionately borne by the lower income earners. However, Brown's growth-formula prohibits any messing with profits, and therefore he has successfully initiated a dramatic attack on wages across the economy. Neoliberalism is a ruling class solution to an increasingly crisis-ridden capitalist economy: socialise the costs, privatise the profits, reduce welfare provisions, and transfer the burden of any crisis to the working class. And when they get uppity, send the police out to contain them.

Interestingly, recent statistics on child poverty suggest that most children in poverty belong to families with parents in work. This implies that aside from the problem of low benefits (and this government has aggressively sought to reduce the welfare bill further), one of the causes of the problem is low pay. The government's definition of child poverty is based on a simple weekly income amount, and therefore doesn't necessarily take into account the disproportionate impact of inflation for essential goods. It is a definition chosen to make the target of cutting it in half (the 2010 goal) relatively easy, because it means a large number of people are living only somewhat below the designated line, and therefore one can theoretically solve the problem with small-scale redistributive measures - although in fact, the government is going to miss even this target, despite having benefited from relatively stable economic growth. That is simply one index of the failure of reformism in a neoliberal age, in which the government must constantly dilute and fail on even its most limited agenda for progressive change.

Labels: gordon brown, inflation, new labour, pay cuts, rozzers