Afscme Local 444, retired
This is from a comrade in Canada. The best thing we can say in this situation is to reveal the reality and encourage workers to read Marx's pamphlet on this and then discuss it (Wages Price and Profit.) Wages and prices are not organically linked. This is more of the propaganda from the capitalist class and it's very easy to show it. We all know it really, but it is important to express it and counter their propaganda with reality in the union hall, the home and all social settings when it comes up.
A business owner would raise prices whenever they can as it would bring in more revenue. and hopefully profits. They may try increase prices on their pizza because their rent has gone up or their kids college is rising, any number of reasons. But if the market cannot bare this, if the relation between the supply and demand for this commodity (pizza) is in favor of the demand side, in other words, there is more pizza in the market than pizza lovers, then the price rise will not stick and the capitalists in this business would have to eat it, not the pizza, but take a hit in profits and send their kids to a cheaper college, cancel that Bali vacation or whatever. If there is a shortage of pizza suppliers and lots of people demanding pizza, then the price will hold. I think we all realize this.
In other words, it is profits, the capitalists' income that is affected by a rise in prices. They may get more money if they can raise them but if they can't they get less. In the notice above they mention profitability, if prices are raised it's hard for a small business to be profitable it says. So what! When they cut a workers wages or health care, it's harder for a family to feed themselves and live a decent life. Too bad, go get another job. The serial sexual abuser Trump doesn't care about the effects of his policies on working class families, none of them do.
But we do not know the extent of the profits the investors in this corporation are making. We do not know how a raise in the minimum wage from a poverty level to a slightly less poverty level will cut in to a capitalists or investors lifestyle. That is private information in the main. They certainly won't say that if your wages are raised so you don't starve it will mean their kids goes to a state university instead of Harvard, or they'll have to sell their yacht. I was on a picket line a few weeks ago where workers have been for two months, a tremendous sacrifice for something as basic a increased safety. The investors in this corporation doesn't cry for them.
Even with small business, we don't accept that it's OK for a person to own a small business on the basis that the wages paid are so poor that a worker has to work three jobs. Small business should join the movement for higher wages and the workers' movement can help them in their struggle against the insurance companies, medical industry, excessive taxation etc. They are also in the clutches of big capital.
I always had to deal with this argument at work about wages and prices. But look at airlines. Back then I pointed out that in Oakland here, UA prices for a flight to NYC were more expensive than in SFO. The same airline, the same union representing the workers, same wages. The reason was that in SFO the competition for seats was greater, there were more choices, more airlines so UA had to lower prices there, wages were not the issue.
In the 1990's the fast food workers were paid above minimum wage and it was totally market driven. Labor was tight and competition for it among the capitalists in that industry fierce. They were forced to pay more otherwise a fast food worker would go to a competitor. The capitalists don't like this and try best they can to show a united front and stick together, but it's not always possible. The point is, higher wages will affect profits not necessarily prices. During the nineties, this wage rise in relation to the lower paid occurred during a period when profits hit a 40 year high. Despite this favorable environment, the heads of organized labor refused to go on the offensive and make gains or win back gains they had given bosses in order to keep them happy.
A general increase in wages within a capitalist economy, would lead to a shift in capital from one section of production to another. It would mean a decrease in the wealth of the capitalists at the higher end as capital shifted from the production of yachts say, to commodities that workers buy.
The capitalists will use coercion and violence to maintain lower wages. In the case of corporations in Mexico as we have pointed out on this blog recently, they will murder workers trying to organize for a better life. They use their media to terrorize workers with the threat of layoffs and strikes of capital. They won't hire, that's why capital itself has to be taken in to public ownership. It is a collective product and should be owned and allocated collectively. One of the reasons they are after public workers is that extra security and generally more humane workplace the public sector offers. The private sector cannot provide decent jobs and a secure life for working people, it never has, the post World War Two era that was the material basis for the term American Dream was a dream for some, a nightmare for others and has entered the garbage can of history.
Any benefits we have in the workplace, workers fought and died for in the face of the most crude violence from the bosses and their organizations, the Chamber of Commerce, the National Association of Manufacturers, the Business Round Table, their myriad of think tanks and of course the Pinkertons, the police and their two political parties.
The struggle for decent wages, benefits and public services is a good one, particularly as we learn through the struggle for reforms that more has to be done, that society as a whole has to change. The general trend now is downward and if victories occur, and they can in the face of a mass movement, they will be very temporary and the question of which class controls society, controls the workplace and indeed, controls the future, has to be laid on the table.
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