Winners and Losers from Rising Wages and Falling Ones.

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The three months before June had marked an annual rise of 5.2% in average regular pay, as measured in real terms. A rising tide, to amend the saying, will cause a lot of silly little boats to spin around and capsize. The calamity of these wage increases has inflicted disarray across the soft or bourgeois Left, from Scottish nationalism and Sir Keir Starmer’s Labour party to that most unseaworthy vessel of all, the Remain movement. But are these increases meaningful, progressive, or indeed actually welcome, and how should the Left go about interpreting them?

The recent wage rises are apparently a response to the shortfalls in immigrant labour from that tremendous “reserve army of the unemployed,” the European Union. Low-income workers have certainly benefited from such wage increases to a greater extent than those on bumper salaries. Yet the picture has grown obscurer during the last few months, with some highly visible and highly distressed employers, such as road haulage firms, offering amazing wages, but with earnings flatlining in other areas of the economy.

It is difficult to measure renumeration because what an employer spends on their workforce will rarely include just the wages. Employers might grant free meals and gifts of surplus stock to their workers; they are increasingly offering one-off welcome payments to new employees and rewards, some of them running into hundreds of pounds, for an existing worker to usher a friend through the recruitment process.

I suspect that Modern Monetary Theory (MMT) policy responses to the pandemic might have given the runaway wages some extra legs. The mismatch between the generosity of the furlough scheme and the curtailment of purchasing power during the pandemic will have taken the edge off the hungry, hand-to-mouth workforce that forms the base of the UK’s services sector. It is my own experience that furloughing has given many wage-workers a window to quietly acquire new skills and to thereafter turn traitor on their original, furlough-paying jobs.

The prevailing wisdom within today’s politics is nonetheless that the wage rises are the fruits of Brexit. The Scottish National Party is already a spectacular loser from this. Nicola Sturgeon has been maintaining, albeit ever more wildly, that independence will provide Scotland with a route back to EU membership. Now it looks as though EU membership will require everybody’s wage rises to be reversed, almost as a kind of de-facto, hypothecated income tax for Scottish independence. On this question, Scottish nationalism is seemingly on the side of Scrooge rather than of Santa.

Through its unconditional support for EU membership, the Labour movement has gotten into a similar mess. Many trade unions (including my own) had foolishly condemned Brexit and chosen to complain about it at every given opportunity. This absurdity had reached its apex when one trade unionist, Paul Embery, had actually lost his job for attending a Leave Means Leave rally. Calamitously for these hapless unions, it lately appears that Brexit might have done more to raise wages across the economy than collective bargaining has. Workers who are in trade unions are seeing lower-than-average wage rises.

Much of the Left is presently writhing in existential agony because, contrary to its progressive or revolutionary heritage, it now finds that it is blindly defending the economic status quo, harking back to low wages and nostalgically glorifying the stagnancy of the EU’s corporate capitalism. Where this story gets particularly interesting, however, is in what it is doing to a political party that has the word “Conservative” in its title.

Recently the famous adventurer Boris Johnson was exploring in the jungles of the north of England when he made an incredible discovery. The working class. Nobody had been aware of their existence up until this point. Johnson’s scruffy speech to the Tory party conference last week might have been foremostly characterised by a PR manager’s neurotic box-ticking, with a readiness to credit Margaret Thatcher, environmentalism, homeownership and, inevitably, “our untiring unbeatable unbelievable NHS” as inspirations, however haywire the consequent political product. But it is hard not to notice that there is as much of Tony Benn’s politics gluing together the crazy paving as there is of Margaret Thatcher’s.

In Johnson’s speech, a connection has been finally made at the top of politics between Benn’s Euroscepticism and his broader ambition to enrich and empower the working class. This makes much more sense, politically, than the standard right-wing aspirations for Brexit, as just a means of escaping escalating EU regulations or of transforming the UK into a kind of new Singapore on the Thames. But as Tychy has been arguing for years, it always has done. In being grounded in class consciousness, the left-wing case for Brexit has been always surer and more fluent than the right or even the classically Liberal one. And it has taken a politician as unanchored in ideology as Johnson to hit upon a more natural role for Brexit within our politics.

[Incidentally, Iain Macwhirter also writes in this week’s Herald that “Johnson is cutting an improbable figure as a Tory Tony Benn.” But I have been unable to access this article and so it has no bearing upon my writing. Indeed, in being withheld behind a paywall, it cannot be said to be contributing in any way to public debate.]

Sir Keir Starmer’s guilty secret is that he is probably by now to the right of Johnson on all of the most major political questions. Johnson has some base instinct to kowtow to the proletariat, albeit with this weirdly unselfconfident, evasive phrase “levelling up” in his mouth instead of singing out honestly about “the redistribution of wealth.” Starmer, by contrast, cuts an ever more stranded figure, with no reliable connection to any heartlands anywhere. There is a jovial sense across today’s media that Johnson has robbed Starmer of most of his traditional left-wing baggage and left him standing there looking like a plonker. Starmer must be haunted by the feeling that the whole of contemporary politics has come to be structured almost as a prank at his expense.

There are still obvious problems with where Johnson is drifting. Firstly, this year’s wage rises have not been foreseen or planned as part of any broader economic strategy. It is more that they have simply occurred and that Johnson has pounced on them, in a scramble to weave together some useable new political narrative.

Secondly, the wage rises appear increasingly vulnerable and perhaps even fleeting, once suitable deductions have been made for inflation (or even just the existing costs of housing). Thirdly, they will have not reached areas of the country where the workforce is especially unskilled. Fourthly, it is not yet clear what damage they might be doing within sectors of the economy that can boost productivity through investment and innovation. If you want to establish a robotics factory somewhere on the planet, then the UK’s wage levels are hardly a sweetener. Fifthly, the public sector will be disproportionately weakened by rising wages, in being limited in the extent to which it can compete with the urgency of capitalist investment.

All of these factors might soon add up to some serious economic trouble. Even so, Starmer, Sturgeon and their fellow incompetents have not yet successfully positioned themselves to profit from a devaluation of wages and a dive in living standards. Indeed, Starmer’s stance is in danger of striking most voters as being feckless or, rather, tasteless. He resembles some third cousin who is eternally waiting beside the bedside of the UK economy for it to croak, so that he can come into a spurious, long-promised inheritance.

If the storm of a national emergency does break this winter, with galloping inflation, a collapsing NHS, and food and fuel shortages, then the political upshot might be akin to that of the 2016 referendum. The entire political class, along with the civil service and probably the media, might be viewed as being indiscriminately on the wrong side of the electorate. And this is because nobody within contemporary politics has sufficiently differentiated themselves from a state-capitalist consensus that can no longer react to economic crisis, even on a theoretical level, with any aplomb.  

It is a centre-left idée fixe that the knives of history are bound to turn upon Brexit. In truth, Brexit cannot be straightforwardly disentangled from other problems within the economy, such as the lack of room in the UK’s finances because we have spent all of our money on COVID-19 and the ever more recognisable impact of the country’s chronic neglect of nuclear power. Moreover, there is a distinct hollowness to hating Brexit because the only alternative to an independent democracy – membership of the EU – has dropped so far out of the frame of acceptable politics. It seems more likely that Hillary Clinton could today become the President of the USA than that the UK could contemplate joining the Single Market again.

From the ruins of 2016 the UK had eventually managed, in 2019, to cobble together a Brexiteering government. It remains unclear who or what can emerge in this role this time around.