|Inflation is rising and that’s bad news for workers.|
Inflation rose at its fastest recorded rate for at least a quarter of a century last month.
Inflation is the rate at which the cost of goods and services rises year on year. In order to be able to buy the same amount of goods, your salary must increase by at least the same level as inflation.
Where the inflation rate outstrips wage increases, you lose money in real terms. You need to spend a higher proportion of your wages to buy the same goods, so your living costs increase.
Office for National Statistics (ONS) figures showed the CPI measure of inflation jumped by 1.2 percentage points to 3.2 percent—a nine-year high. Jonathan Athow, an ONS national statistician, says August “saw the largest rise in annual inflation month-on-month since the series was introduced almost” 25 years ago.
The British government prefers the CPI rate because it excludes housing costs and therefore minimises price rises. This is important when it comes to issues such as uprating benefits.
Working-class people are already being hit in the pocket with increasing food and transport costs behind the surge. Petrol prices rose to their highest since September 2013.
More bad news is coming.
Gas and electricity bills are set to increase sharply this autumn. VAT tax will rise back to 12.5 per cent for the hospitality sector at the end of this month and food and clothing prices are also expected to jump in the autumn.
The inflation rise comes as the Tories push through Universal Credit benefit cuts and National Insurance Contribution increases.
And the Bank of England warned earlier this summer that CPI inflation could rise to 4 percent by the end of the year.
Rehana Azam, GMB union national secretary, said, “The cost of food, of rent, of basic day-to-day living is the highest it’s been for ten years.
“Yet the government persists with pushing forward a real terms pay cut for public sector workers.
“Their cruel agenda is taking food from the mouths of our carers, our NHS workers, our school staff and our council workers.”
She added, “After the pandemic and a disastrous decade of cuts workers should be rewarded with a proper pay rise—not more slashed wages.
“Any recovery needs pay to not only beat the cost of living but also start restoring what’s been lost over the last ten years.”
Many workers have suffered substantial pay cuts in “real terms” – adjusted for inflation – since the beginning of the financial crash in 2008.
Pat Harrington, General Secretary of Solidarity, commented: “Without union protection workers will be faced with attempts by bosses to give wage increases below the real level of inflation or, worse still, face pay freezes. Effectively instead of a pay rise, they will be getting a pay cut. Only unions can stand against this and unions now represent only 25 percent of the workforce compared to the 45 percent back in the 70s. Union members will not be as hard-hit as other non-unionised workers. That’s just a sad fact. Still, we owe it to our fellow workers to reach out to them and urge them to join a union.”