The independent think tank, the Resolution Foundation, has just published a new report, Who Gains from Growth?, which reveals the alarming extent to which living standards for low and middle-income households will tumble by 2020 – even if the economy improves – while the rich get steadily richer. The report makes the case well for tackling the growing polarisation between the richer and poorer halves of the country through better vocational training, subsidised childcare and a living wage. These are all worthwhile objectives.
But as long as capital is free to relocate jobs to countries where wages are lower, the spoils of growth go largely to top earners and the Government favour finance over manufacturing, then these remedies can only have a limited effect.
As Marx pointed out, the production of surplus value underpins capital accumulation, and the immiseration of the working class necessarily follows. With the end of the post-war boom – when wages rose steadily, but which can now be seen as the temporary blip it was always going to be – this process can be witnessed in the steady reduction in the share of GDP going to wages over the last 30 years in the US and Britain as a rising proportion goes to profits. The adoption by Labour of policy to introduce a more progressive tax system, develop a proper industrial strategy and, who knows, even re-introduce capital controls, would be a significant step in the right direction. Of course, this would require radical decisions, but perhaps we can see the People’s Charter become a rallying call across the movement!