The government’s class war just got a new weapon

A pair of hands counting money representing broadband price rises
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The government just got a new weapon in the armoury of its ongoing class war. It comes in the form of wages. Official figures show that workers’ take-home pay is, for some, now in deflation. And so far, the government has done nothing to address this.

Class war: ongoing

The Canary has been reporting on the government’s ongoing class war. It’s being framed by much of the media and many politicians as a ‘cost of living crisis’. The reality is that the government is failing to enact policies that will protect the poorest people in society – or it is actively putting policies in place that are harmful to them.

For example, the government’s windfall tax put in place measures like £650 grants for families reliant on social security. The Tories and others trumpeted this as supporting the poorest people. However, the most deprived families will still be £300 a year worse off due to spiralling inflation. The government knows this – and yet fails to act further. This is one example of class war.

Now, however, we also know the state of wage growth for UK workers. And the situation is looking dire whilst the government stands idly by.

ONS: wage collapse

The Office for National Statistics (ONS) has released its latest labour market data. It found that year-on-year wage growth, from February to April 2022, was:

  • 6.8% for total pay (including bonuses).
  • 4.2% for regular pay.
  • 8% in the private sector.
  • 1.5% in the public sector.

Finances and business services grew by the most (10.6%). But this was due to bonuses – which, as The Canary previously reported, were through the roof if you were a banker, running into billions of pounds. Meanwhile, the ONS reported that wholesaling, retailing, hotels and restaurants wages grew by 8.4%. However, this was partly because a year earlier, furlough was in place, meaning that wages in these sectors were lower. Therefore, the 8.4% growth is based on the lower starting position from the earlier year.

Overall, though, all of this masks the reality. As the ONS reported, when you take out bonuses and adjust wages in real terms (factoring in inflation), then they actually fell by 2.2% from February to April. This is the biggest three-month decline since 2011 – even more than during the height of the pandemic. In April alone, regular wages fell in real terms by 4.5% – the biggest one-month collapse since records began.

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A spiralling disaster

This is a disaster for many workers – and the situation will only get worse. The ONS figures only run up until April, and use an inflation figure of 6.5%. The Bank of England is saying that inflation will hit 10% this year.

Moreover, what’s not included in wage growth are people who are reliant fully or in part on social security. The government is only giving them a just-over-3% increase in payments this year. Therefore, based on the ONS inflation rate of 6.5%, in April 2022 their real-terms income dropped by around 3.4%. And as for workers, the situation will only get worse.

As always, the government knows all this. And yet, as at every turn in its ongoing class war, it’s failing to act.

Featured image via Frantisek_Krejci – pixabay

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