The government has declared war on workers
Prem Sikka is Professor Emeritus of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords and editor of Left Foot Forward..
In folklore, elected governments are supposed to increase people’s prosperity and happiness, improve their standard of living and protect the vulnerable. But this is not the case in the U.K. where the government has declared war on workers and is using the state apparatus to disenfranchise workers.
The standard of living of the masses is being seriously eroded by an inflation rate of over 14%, the highest in 40 years. Much of the inflation is fueled by corporate profits, particularly by energy companies whose profits have more than doubled. In October 2021, the average annual household energy bill was £1,277, up from £2,500 currently, and is expected to reach £3,000 by April. Food prices are rising at a rate of 13.3%.
In the face of soaring inflation and a worsening cost of living crisis, private sector workers got an average wage increase of 6.6%, while public sector workers’ wages rose by only 2.2. Average real wages for workers are lower than they were in 2008. Millions of people, including teachers, nurses and police officers, rely on food banks and charities to help them through difficult times. Some 16.65 million people live in poverty. Over 800,000 children are hungry.
Low incomes condemn people to poor housing, food and health care, and the National Health Service can’t keep up with demand. In the world’s sixth largest economy, about 500 people die each week because of delays in providing emergency care.
Nurses, doctors, postal workers, railroads, telecommunications, ports and other workers are taking industrial action for higher pay increases, but Prime Minister Rishi Sunak opposes a pay rise for public sector workers, saying it will “fuel inflation.”. No evidence has been provided to support such claims, especially since inflation is driven by profits rather than excessive wages.
To prevent workers from getting higher wages, the government is rushing through legislation that would make it very difficult, if not impossible, for workers to demand higher wages. The bill would require striking workers in the health, education, fire, ambulance, rail and nuclear commissioning sectors to provide a minimum level of service during strikes. If not, workers would lose their jobs and unions would be sued for damages.
This is in addition to the Employment Agencies and Employment Businesses (Amendment) Regulations, 2022, which allow employers to lay off workers and replace them with cheaper temporary staff.
The proposed law violates the UK’s commitments under Article 11 of the European Convention on Human Rights. Under this, workers will effectively be drafted. They will be required to work anti-social hours and weekends, as a refusal would constitute a failure to provide “minimum service”. Some essential workers, such as railroad signal workers, would be hard pressed to strike because their absence would prevent companies from providing minimum service.
The inability to remove work would condemn workers to low wages and poor working conditions, while increasing corporate profits.
In contrast, there are no restrictions on wages at the top. Data from the High Pay Center shows that the median annual salary of FTSE100 CEOs reached £3.41 million. That’s 39% more than the median CEO salary in January 2022.
The typical salary of a FTSE100 CEO is 103 times the median full-time worker’s salary of £33,000, i.e. it takes less than 4 days for the CEO to surpass the average worker’s salary.
Employees and customers have no say in executive pay. No senior minister or politician has called CEO pay inflationary. There are no calls for restraint, even though excessive executive salaries fuel inequalities that deny millions access to good food, housing, education, health care, pensions and the ability to influence government policy through lobbying.
Successive governments have relied on corporate remuneration committees of non-executive directors to oversee and limit undeserved executive pay. In reality, non-executives are friends and stooges of executive directors and rarely bite the hand that feeds them. Too often they are directors of other companies and are loath to set lower benchmarks, which will result in lower pay for them.
There is little or no relationship between executive pay and company performance.
Shareholder votes on executive compensation are generally advisory rather than binding. To prevent the development of effective statutory sanctions, the Investment Association, on behalf of the corporate sector, maintains a public registry that names companies where 20% or more of shareholders vote against executive compensation at annual general meetings. However, naming and shaming has not stopped corporate elites from helping themselves.
Recently, 44% of Kier shareholders voted against the company’s compensation report, but the directors still collected their salaries.
The government has declared war on workers, camouflaged by statements about controlling inflation. All the power of the state is used to discipline and devalue the workforce. No doubt the government hopes that the resulting insecurity will produce compliant and docile workers. Such policies are a recipe for social misery and unrest.
They can’t boost the economy because without good purchasing power, people can’t buy goods and services.