The statistics and facts reveal a clear trend: over the past 30 years workers are taking a smaller slice of the economic output in society. Conversely, there has been an accelerating increase of the concentration of wealth at the top. Darrall Cozens discussed this growing inequality and presents a motion from the Coventry Trades Council that calls for the leaders of labour movement to organise workers and begin the fight back against low pay, precarious jobs, and the capitalist system that give rise to these.
“There are three kinds of lies: lies, damned lies, and statistics.”
A saying popularised by Mark Twain in “Chapters from My Autobiography”
Despite Twain’s misgivings on the use of statistics to bolster an argument, there is no doubt that whichever ones you use to highlight the growing inequality in the UK and other countries, the picture remains the same. Over the past 30 years a greater share of wealth that is produced by labour is going to the rich and conversely a smaller share to those who produce the wealth.
USA
“Over the past three quarters, America has seen national income rise by $200bn (£130bn), but profits have increased by $280bn while wages have fallen by $90bn.” (Guardian, 29 Mar 2010)
“Between 1979 and 2007, average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household — compared to increases of 25 percent ($11,200 per household) for the middle fifth of households and 16 percent ($2,400 per household) for the bottom fifth.” (Center for Budget and Policy Priorities)
“Income for the top 20 percent has increased since the 1970s while income for the bottom 80 percent declined. In the 1970s the top 1 percent received 8 percent of total income while today they receive 18 percent. During the same period income for the bottom 20 percent had decreased 30 percent.
“In the 1970s the top 0.1 percent of Americans received 2 percent of total income. Today they get 8 percent.
“In 1980 the average CEO made 50 times more money than the average worker while today the average CEO makes almost 300 times more than the average worker.” (The Great Divergence In Pictures: A Visual Guide to Income Inequality.)
“In 2010, the richest 1% in the United States captured an astonishing 93% of that year’s gain in incomes. In the same year, corporate chief executives made, on average, 243 times as much as the median worker (in 1965 the ratio was ten times lower, namely 24:1). Between 1970 and 2010 the Gini coefficient, which measures inequality, rose in the United States from 0.35 to 0.44: an astonishing leap.” (George Monbiot, Guardian, 25 Sept 2012)
Statistics like these led Warren Buffet, the second richest man in America, to say, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
UK
If you think that this picture only applies to the most advanced capitalist country on the planet, the USA, you would be wrong. The UK is not so different and the trend in inequality has been accelerating over the past 30 years.
“The richest 1,000 people in Britain have seen their wealth increase by more than £155bn since the crisis began….” (Seamus Milne, Guardian, 31 October 2012)
“Life has been getting tougher for labour for decades, with the real break coming in the 1980s. Over the past 35 years there has been a marked shift from wages to profits in the UK economy, with labour’s share of national income falling from 59% in 1977 to 53% in 2008 and the share of profits up from 25% to 29% over the same period” (Larry Elliott, Guardian, 3 Dec 2012).
“In Britain, where recovery has been slower, national income has grown by £27bn since the middle of last year; higher profits have accounted for £24bn of the rise. Wages have risen by £2bn.” (Guardian, 29 Mar 2010)
“In April 2011, the top 1% of earners in the UK received an average £61.10 an hour – or £135,666 a year – based on the average number of hours worked by full-time employees in the UK, compared to £28.18 an hour in 1986, a rise of 117% in real terms.
“Over the same 25-year period the lowest-paid 10% of workers saw their wages increase by just 47% to an average of £7.01 an hour, or £15,565 a year. However, the ONS said the introduction of the minimum wage in April 1999 had propped up the pay of the bottom 1% of earners, who experienced a 70% increase to £5.93 an hour over 25 years.” (Office for National Statistics, quoted in Guardian 8 Nov 2012)
Zero Hours
The statistics and facts reveal the trend – over the past 30 years labour, in the form of wages, is taking a smaller slice of national output, of GDP. Conversely, there has been an accelerating increase of the concentration of wealth at the top of society.
This process has gone hand in hand with an erosion of trade union rights and an ever-increasing attack on welfare benefits. After all, those who own and control the wealth in society have to find scapegoats for the economic crisis. If they don’t, people may start to ask who the real culprits are of the mess we are in.
Zero-hour contracts have to be seen in the light of this trend, over at least the past 30 years, to drive down labour costs and thereby boost the profitability of British capitalism. What could be better for the capitalist class? Governments of the day pass laws to restrict the ability of organised labour to resist attacks on working class people. Social wages such as public services, which acted as a minimum safety net for workers on low incomes, are also being cut to try and balance the books. So directly in the form of wages being cut or frozen or workers on temporary, flexible contracts such as zero hours, or indirectly in the form of cuts to social and public services, there is a relentless squeeze on labour’s share on national income.
Quite correctly the leaders of the Labour Party and of many of the trade unions fume and fuss about zero-hour contracts, but so far have not come up with a plan of action to combat them. One fact is obvious: there is a direct correlation between the fall in trade union membership, with the concomitant legal curtailing of trade union bargaining power, and the fall in living standards of working class people.
For that reason the fight against Zero-hour contracts must also be accompanied by a massive campaign of organised labour to build trade union membership, whilst explaining that under capitalism, especially one in a state of crisis, there will always be attacks on the working class, as capital and its political spokespeople seek to defend their wealth, power and privileges. Therefore, the only guarantee of a decent life for the overwhelming majority in society is to change the society that we live in – to create a socialist society.
The whole issue of the crisis of capitalism and its relationship to the issue of Zero Hour contracts was discussed at length at the August delegate meeting of Coventry TUC. At the end of the discussion the following motion was passed unanimously.
“Coventry TUC notes with serious concern that well over one million workers are employed on zero-hours contracts, that these are the latest attack on workers’ rights and dignity, and these numbers are rising day by day, and cover a wide variety of industries
These contracts mean that workers:
- Are completely subjugated to the employer who demands total flexibility of working hours and times.
- Do not have access to usual statutory rights in relation to holidays, sick or maternity pay. The only obligation that the employer has is a “duty of care” while workers are on the premises.
- Are excluded from pensions and benefit payments.
- Have to be available for work at very short notice so that even their free or leisure time when not at work is owned and controlled by the employer.
- Can’t work for another employer even though they may not have any work and therefore wages from the employer they are contracted to.
- Can’t sign on to claim dole money even though they may not be receiving wages.
- Can be denied any benefits from the state if they refuse to accept these contracts.
Put simply, zero hours gives workers no guaranteed weekly hours or income so workers are only paid for hours that they do work. With the high level of employment insecurity comes the greater risk of bullying, harassment and stress!
These contracts not only affect the employees concerned but their families and the right to a family life.
The rise of zero-hour contracts is a sign of the real crisis of capitalism which can only survive by increasing the rate of exploitation of the working class. These contracts are a continuation of the trend of the last 30 years which has seen a massive shift in wealth and power to the capitalist class. The share of the GDP going to wages fell from 65% to 53% between 1979 and 2010, and in the same period profits rose from 13% of GDP to 21%. Hand in hand with this redistribution of wealth to the rich we have also witnessed a whole series of laws that have sought to hamstring organised labour to prevent it from defending its hard won gains.
Coventry TUC states that while individual capitalists might benefit from these contracts as labour costs are cut, from the point of view of capitalism as a whole these contracts reduce the purchasing power of workers so that goods and services that are produced cannot be bought back. This leads to periodic crises of overproduction and the destruction of wealth created by the working class.
Coventry TUC states that zero hour contracts are harmful to the interests of the working class and it is the duty and responsibility of the labour movement to campaign against them.
Coventry TUC therefore calls upon:
- The TUC to organise a campaign against these contracts and to recruit workers on these contracts into the trade union movement.
- Coventry City Council and other councils to abolish these contracts and to employ workers on full time or fractional contracts with all the benefits that these imply.
And resolves to:
- To challenge all employers on zero hours and end the exploitation.
- To undertake Freedom of Information requests to establish the level of Zero Hours Contracts in use within Coventry and Warwickshire.
- Identify those workplaces known to be employing people on Zero Hours Contracts and organise dates for picketing.
Coventry TUC pledges to campaign locally against these contracts by producing material aimed at workers on these contracts and the public who use the services provided by these contracts.
Finally, Coventry TUC recognises that any campaign to end zero hour contracts must also include the need to fight to change society as the only guarantee of any kind of decent life in the future for working class people.”
It is now the task of the EC of Coventry TUC to draw up a plan of action based on this motion.
