Workers will suffer as inflation rises to the highest level in three decades. Workers will be left out of pocket if they don’t secure above-inflation wage rises.
The retail prices index (RPI) measure of inflation reached 7.1 percent last month, the highest level in 30 years. It was six percent in October.
Disruption to supply chains and increasing fuel prices have inflated the cost of living, according to the Office of National Statistics (ONS) on Wednesday.
Prices rose across the board for essential items, and services such as transport, food, energy, housing costs and clothing are all going up.
Petrol prices stand at the highest ever recorded, averaging 145.8p per litre. Used car prices have also gone up 31.3 percent since April.
Current estimates by the Centre for Economics and Business Research suggest that costs for the typical family will jump by £1,700 in 2022.
Less than a six percent rise means a pay cut.
The banks and bosses favoured measure of inflation, customer price index (CPI), records the cost of 700 items but excludes housing-related costs, unlike RPI.
They use this figure to deny workers a wage that reflects the actual cost of inflation.
CPI currently stands at 5.1 percent.
High inflation has real-life consequences, and it hits the poor hardest. Workers on a set wage contract will have to cut spending, as their money won’t go as far.
Those claiming benefits will also suffer as most benefits have not kept up with the inflation rate.
Inflation continues to rise faster than pay. This means most workers will face a real-terms pay cut.
The labour market report outlined that basic pay growth slumped to just 4.3 percent per year from August to October.
During the last ONS inflation report, Unite union general secretary Sharon Graham said, “Workers’ wages will have to at least match the inflation rate because otherwise, they will be facing a calamitous drop in their standard of living.”
Sharon Graham has now renewed Unite’s pledge to barter for an above-inflation pay rise saying, “Today’s figures mean our members must fight for wage rises above the current rate of inflation, as measured by the RPI.”
Pat Harrington, General Secretary of Solidarity, said: “all unions must fight for wage increases that keep pace with inflation.”
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