Britain: boom for the rich; declining living standards for the rest

The filthy rich are continuing to take an increasing share of the national cake. So worried are some commentators at this state of affairs that they are dubbing it the "Downton Abbey economy".

bankers-drinking-champagneA chasm exists between the privileged elite at top of society and those that live on the bottom. “Inequality has emerged as a major issue in the US and beyond”, warns Lawrence Summers, a former US Treasury secretary. “Family incomes have not risen as fast as productivity”, meaning the working class is producing more but getting less.

The share of income going to the top one per cent has increased sharply. A rising share of output is going to profits, while real wages are stagnating or being driven down.

“The cumulative effect of all these developments is that the US (and Britain) may well be on the way to becoming a Downton Abbey economy”, he says. The Upstairs, Downstairs world simply reflects the growing class divide within society.

We are told that we are in a recovery but all we can feel is austerity. We are told that some sectors, like the car industry are actually booming. In fact, UK car production has topped 1.5m in 2013, the highest share since 2007. But this is only one side of the story.

Producing is booming but with fewer workers employed. 87,000 workers were employed in the car industry last year, compared with 92,000 in 2007, well short of the 123,000 figure for 2004.

In other words, this is a “boom” at the expense of the workers who are now working longer and harder for less money. While the highest-paid directors at the six largest UK carmakers have seen salary rises of 34%, real wages for the lowest paid 30% of workers have fallen by 7.5% since 2009, according to the Financial Times analysis (17/2/14).

Total annual pay at UK car plants today stands at £3.6bn – more than £1bn LOWER than in 2004. But car production has increased by nearly 50%, with one new car built every 20 seconds! As a result, carmakers such as Jaguar Land Rover are racking up profits, while workers suffer from overwork and increased stress.

“Everybody is taking advantage of weak regulation to hire lower paid, less permanent workers,” stated Roger Maddison, automotive national officer at UNITE. “There is work to be done until the full benefits of this UK car resurgence trickle down to everyone who is contributing.”

Unfortunately, the union leaders, including UNITE, are responsible for these “concessions”. They gave in to the bosses blackmail that workers should make cuts in pay and conditions to keep their jobs. As a result, car workers at Vauxhall’s in Ellesmere Port have had their pay frozen for four out of five years. New workers are hired as lower-paid temporary staff, receiving 70% of standard salary for their first four years, while pensions will also be less.

“We’re prepared to make difficult choices… but carmakers do need to give something back now the situation is brighter”, says Maddison. But the unions should never have agreed to wage cuts and worsening conditions in the first place.

Why should workers pay for the crisis they did not make? As soon as the union leaders went cap in hand to offer concessions on wages and conditions, the bosses took full advantage of the situation to mercilessly squeeze the labour force. Now they are raking in big profits.

It is about time the trade unions got off their knees and started fighting back. No amount of pleading with the bosses will do any good. What is required is a determined fight back, not a “trickle down”.

At the end of the day, it is capitalism and the rule of big business that causes the class divide. While capitalism continues to exist, the rich will get rich at the expense of the rest of society. They are driven by one thing alone – the maximisation of profits, and to hell with everything else. This is the dog-eat-dog society we live in. It is the Downton Abbey vision of society writ large and no sticking plasters will disguise this fact.

The fight for better pay and conditions should be linked with the struggle to change society in order to put an end to this nightmare. On the basis of capitalist crisis, we face a future of austerity, wage cuts and worsening conditions. At the same time, the rich continue to get richer at our expense.

No amount of tinkering with capitalism will solve our problems. The system has to be done away with root and branch. Only by taking the commanding heights of the economy out of the hands of the rich and powerful parasites can we control and plan our own lives. This means nationalising the 150 major monopolies, banks and insurance companies that dominate the economy and placing them under democratic workers’ control and management. Only then can we use the full resources of society, including robotics, to slash the working week, abolish unemployment, and dramatically increase living standards for all.

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