WORLD WORLDWIDE UK News Journal Update - (en) UK, ACG: Inflation Myths: Wage rises don't cause inflation (ca, de, it, pt, tr)[machine translation]

 What is inflation? ---- It's a relative increase in the cost of living-

the cost of goods and services- and in Britain is usually measured by
the Retail Price Index (RPI) and the Consumer Price Index (CPI). These
base their figures on a "basket" of goods and prices of clothes, fuel,
energy etc. The RPI differs from the CPI in including mortgage interest
payments and so takes house prices into account. There are other ways of
measuring inflation like RPIX which leaves out mortgage payments, and
CPIH, which factors in some elements of housing costs including council tax.
All these registers signal the biggest increase in inflation in the UK
since 40 years ago.
But why is it happening?
During a period of growth, bosses compete to invest where they think
they can make a profit.  Capitalists compete to buy the same raw
materials, and so drive their price up. This then impacts on their
profits. To compensate, they raise prices on the goods they produce.
This then impacts on other capitalists, who in turn raise their prices.

So, is inflation caused by wage rises?

Inflation is a weapon of the capitalists to reduce the real value of
wages so as to maintain and increase profits. In fact, there has been a
huge surge in profits. For example, the banking corporation HSBC made a
profit of nearly £17 million in the last six months. They are double
what they were last year. Its CEO Noel Quinn gets £6 million a year,
which could rise to £10 million depending on increasing profits. The oil
and gas corporation BP  saw their profits double last year to £23
billion. Shell saw its profits go up 53% for last year to £68.1 billion.
Sixty per cent of the current rise in inflation is caused by this huge
increase in profits. True, the COVID pandemic had a big effect on the
supply chains, which was further aggravated by shortage of labour and
the war in Ukraine had its effects on energy and food prices, but the
main culprits for inflation were the corporations. It's not just the
banks and the oil giants, it's the supermarkets, Tesco made a profit of
£56.7 billion in 2022, Sainsbury's £327 million, and Asda made £886
million. Manufacturers like Rolls Royce made a profit of £206 million.

The capitalists themselves know that wage rises don't cause inflation.
The Organisation for Economic Co-operation and Development released a
report in June admitting that the main driver of inflation was UK
business and its thirst for massive profits.  Yet Rishi Sunak and the
Governor of the Bank of England, Andrew Bailey, are intent on furthering
the lie that wage rises cause inflation. But wages have remained static
for ten years but inflation has been on the rise. To put it bluntly,
prices are rising because profits are soaring.

The CPI in the UK rose by 2 points in April to 9%, the biggest
month-on-month annual increase since June 1979. At the same time, prices
rose in the USA and the eurozone. The International Monetary Fund made
the prediction that inflation on a world level will go up during this
year and next, twinned with minimal economic growth.

In Britain more and more people are getting themselves into debt to pay
for increasing prices. An additional £1.7 billion of consumer debt was
run up in June, £600 million of which was on credit card spending (Bank
of England monthly money and credit report).

Meanwhile, Bank of England bosses, (Andrew Bailey excepted) awarded
themselves pay rises averaging £4,300 a year, whilst exhorting workers
to refrain from demanding higher wages. One of these fat cats, the Bank
of England's chief economist, Huw Pill, said that people "need to
accept" that they are poorer.

More and more workers are realising that rising inflation is not caused
by higher wages, that it is a lie. Workers must now take effective
action to win wage demands, making sure they start organising at grass
roots level to avoid the sellouts of the union bureaucrats.

https://www.anarchistcommunism.org/2023/08/05/inflation-myths-wage-rises-dont-cause-inflation/
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