1st January 2023
2023 – not such a party for all
However much alcohol they may have consumed the night before, the reality is that for millions of working class people the biggest hangover they will wake up to on New Year’s Day is a financial one. The fact that they are in this situation, together with millions of others, is scant compensation when the bills continue to roll in and the choice between heating and eating is a very real one.
It’s New Year’s Day why the pessimism, surely this is the time for a bit of optimism, a bit of hope, the turning of a new page as we head into 2023?
It is true that for some the prospects in 2023 do seem brighter than for others, certainly if 2022 is anything to go by. Estate agents Knight Frank have just published research looking at the sale of “super prime country houses.” In total 168 homes outside London were sold for more than £5m in the year end to October, the highest number since 2007, the year before the financial crash.
The reason for this? It would appear, according to Knight Frank, that the boom in country mansion sales was as a result of “wealth creation” during and after the Covid pandemic. This, it would seem, led to a rise in the number of “ultra high net worth” (UHNW) individuals, defined as having a fortune of more than $50 million, now at a record 218,200 level.
Investment bank Credit Suisse confirm the Knight Frank findings, stating that the world’s richest people benefitted from “almost an explosion of wealth” during the recovery from the pandemic. Credit Suisse add that the number of people in the UHNW bracket has increased by more than 50% in the past two years.
For Knight Frank and Credit Suisse the concept of wealth creation appears simply to mean that more people got richer, not that they actually did anything to create this wealth, other than to exploit the labour of others. In effect, on the back of the hard work done by millions in shops, factories, offices, schools and hospitals, to keep people safe and the economy functioning throughout the pandemic, those who were already remarkably rich, and extremely safe financially, have lined their pockets even further.
It is possible that some of those benefitting from this boom in wealth for the few work in the banking sector. According to the European Banking Authority there are 3,519 bankers working in Britain who earn more than €1 million (£880,000) a year. This is seven times higher than Germany, which has the second highest number of €1 million a year bankers in Europe.
The government appear not to be concerned about inflation when it comes to the eye watering earnings and pay increases in the banking sector or for those profiting lucratively from the pandemic. For the government inflation only appears to be a threat if wage demands are coming from postal workers, nurses, rail workers, border staff, junior doctors or local government employees.
Of course, this is the economics of setting the rules in order to make sure you win the game, although even many capitalist economists disagree with the assertion that increased wages for low paid workers fuels inflation. Given that these are the workers on whom economic demand depends, as they are the people who go out and buy goods and services, being able to afford to spend on these things is more likely to aid economic recovery than hamper it.
As it stands the headline rate of pay for all workers last year, excluding bonuses, reached 6.1% but when adjusted for inflation pay for all workers fell by 2.7%, underlining the impact of the cost of living crisis for many. According to a recent Which? survey in the run up to Xmas 1.9 million households failed to meet at least one mortgage, rent, loan, credit card or energy payment.
In these circumstances the danger of loan sharks moving in to working class communities becomes significant, as families struggle to meet basic needs and resort to ever more desperate measures to survive. Support from Citizen’s Advice, community organisations and others offering debt counselling can go so far but when there is simply not enough money to make ends meet there is only so much which good advice can achieve.
While the privileged few may enter the New Year in anticipation of turning a bigger profit or making a mansion purchase, for the majority capitalism is not a system working in their favour or in their interests. The trade union struggles for greater pay must be linked to community action to tackle poverty and the recognition that low pay, poverty and the cycle of deprivation are endemic to the capitalist system.
In the short term it is important that struggles for improved pay and conditions are won. However, the wider political struggle to make fundamental changes in the direction of socialism, to meet the needs of the many, not the few must be the most important resolution for the New Year. That is the task facing all those concerned with shaping a system which truly reflects the ideals of peace, democracy and social justice run by, and in the interests of, the working class.
Avanti Populo 