A Working Class Alternative To Labour
A Prices and Wages Commission
To prevent the proposed wage rises being clawed back by industry as price rises, (which is what happened in the
1960s and 70s) there would have to be a prices commission powerful enough to impose fines on firms making
inflationary price rises. This system is used very successfully in Austria for example (Austria has one of the best
records on the eradication of poverty in Europe).
Without something like this it is hard to see how Labour, for example, intend to defend wage rises against inflationary
responses from capital.
Rent caps domestic and retail (This policy was written in 2013 and the book containing it was purchased by the
House of Commons Library in the February 2014. It was also sent to several Labour MPs)
To stop the higher minimum wage being passed on as inflation, it is not just prices that have to be regulated but rents
also. If this were not done landlords, those who own retail premises, might be tempted to try to take back money by
simply putting up rents. For this reason there could be a cap of around 3% per year for rent increases.
This would have two effects; one would be to prevent inflation linked to the new minimum wage, but it would also
serve to build in a steady and controlled growth in the rental market, and help prevent the property value explosion
that was the ruin of the global economy. Along with other measures described here, it would build an idea of an
acceptable level of profit in our society (a radical idea which could be eventually expanded to govern all trade and
growth). It would allow for steady economic growth across the board, rather than growth in the value of property, and
growth of existing wealth. In other words, it would mean that growth would have to come from manufactures that add
things to the nation's wealth, rather than from writing bigger and bigger price tags above existing buildings, and
calling that "value". That process adds nothing to most people's real wealth, it merely results in us all paying what is
in effect vast rents to the banks for property we think we own. It makes the banks richer, and everyone else poorer.
Rent control of retail outlets would revolutionise the situation for small retailers, They are often bled for high rents by
property owners, which is one of the reasons why high street shops are dying (the other being Business Rates, dealt
with above). This phenomenon is typical of the way money in our society drifts upwards, towards the banks or large
This control of retail and domestic rents would be a vital part of a working class government's policies aimed at moving
money downwards in the economy and preventing the polarising effects we have seen in recent decades.
Labour have similar plans to cap residential rents only. They stop short of affecting the vital commercial rental market,
the very one that makes it impossible for any one except large owners to make money in our society. In that way it is a
typical Labour policy in that it seeks to ameliorate poverty rather than get rid of it. Their plan is however a lot better
than nothing, and would benefit the poor so long as the 3 year contract aspect doesn't result in empty properties.
The Agriculture Sector - Another example of the Trickle-Up economy.
There are 200,000 low paid jobs in agriculture.
In fact farming is just another sector where the large corporations have the upper hand and benefit from the low labour
costs in that industry. Agriculture is not labour intensive; only 1.5% of the workforce are in agriculture, producing
60% of what we eat; the rest is imported.
Small farmers are unable to make ends meet because of the big stores pushing the prices of their produce down.
Of the 400,000 people working in agriculture, 200,000 are on low wages. The profit from their labour goes not to the
small farmers (because they are not making any significant profits) but to the large conglomerates who own the land, or
to supermarkets who make profits on the sale.
Because the balance in agriculture has gone so far in favour of the large owners already it would be appropriate to
give small farmers a partial exemption from the minimum wage of £9.30, to provide a lever in their favour in
competition with the larger concerns. The rate might be something like £8.00, and it should be based on turnover.
(They can't be helped through tax relief as they are exempt from Business Rates already, and make too little profit to
pay much income tax or business tax).
A price commission should protect small farmers from the buying power of the big retailers, to stop the
downwards pressure on prices.
Farmers, unlike other producers, should be entitled to pass on the wage rises to their customers, who are mainly the
This would mean inflation in food prices. However, the low labour intensity of the agriculture industry would mean
that price rises would be marginal. Labour costs represent roughly 10% of production costs in agriculture, so an
increase in labour costs brought about by the minimum wage being raised from £6 to £9, i.e. 50%, would be a 50%
rise in 10% of the cost, i.e. a net rise of 5%. Food prices would go up by 5%. The working classes' pay would have been
increased by 50%, and so they would still have 45% more purchasing power than now. The middle classes who spend a
smaller proportion of their total expenditure on food, would notice the 5% in food prices increase even less.
Note; land ownership is Britain is one of the most polarised in Europe
Across the whole of Europe 50% of land is owned by 3% of farms (Source:Transnational Institute). And widespread
buying up of land by conglomerates is forcing ordinary people off the land. In Britain it is estimated that 70% of the
land is owned by 1% of the population (Source: UK Land Directory).
The trend is world-wide, as China and Russia and the west land-grab in Africa, Europe-wide as the conglomerates do
the same here, and Britain-wide as Britain has a high degree of land ownership concentration.
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