2023-05-09 21:34:19
It is no mystery to anyone that the increases hit working-class homes hard and that our wages are not enough to live on. In the last 12 months, the price of bread has risen 28.2%, vegetable oil 60%, flour 58%, Diesel oil 45.2%, sugar 49.9% and as well with many basic necessities. But the phenomenon of constant increases not only affects basic necessities, but also some services, such as rents, loans for access to housing or the cost of education. But these increases are not random, but are the consequence of inflationary processes in the functioning of the capitalist economy and Chile closed 2022 with 12.8% inflation, the highest in 30 years.
Although inflation seems an abstract concept for workers, it is evident when we go to buy our food and we find ourselves paying twice as much, buying half of the products we bought before. Inflation in economics is when there is a generalized and sustained rise in the prices of goods and services over a period of time. This is measured around the variations of the CPI (Consumer Price Index), which represents the level of the cost of living and is calculated on a basic basket of products and services. This index is also used to regulate or readjust rents, salaries, credits, collective locomotion, water and electricity services, etc. Although the causes of inflation are due to multiple factors, our country is no stranger to the global inflationary process, which, as the economist Michael Roberts maintains: “It is the result of a ‘supply shock’: shortage of production and break in the supply chain. supply induced by the COVID pandemic and then by the conflict between Russia and Ukraine”.
Despite the fact that this sounds incomprehensible to us, we know that the consequences of this are paid by the workers, because, specifically, inflation affects wages in general; food prices have doubled and therefore wages are depreciating in relation to the cost of living.
Salaries on the ground, profits in the sky
According to the data provided by the National Institute of Statistics (INE), while the real wages of workers as of January 2023 accumulated 14 months of decline due to this inflationary process, on the other hand, the profits of large businesses continued to increase. The Banking sector obtained exorbitant profits during the year 2022, which rose by 44%, reaching 5.5 billion dollars; and since the Chilean economy is a model of high concentration of wealth, the same owners of the Bank are also owners of the land, of the companies and of the capital. They dominate the markets, distribution, financial assets and the media, and all the profits go to a few hands.
At the same time, the profits of large companies reached 45 billion dollars in 2022. 50% of these profits were concentrated in ten companies, the majority belonging to the large Chilean economic groups, such as Luksic, Matte, Angelini. That is to say, while the workers are increasingly pressured by inflation, the economic groups, the ten families that own everything in Chile, accumulate extraordinary profits.
And why don’t wages go up?
So, if every day it becomes more expensive for workers to live, if our life has become poorer, why don’t wages go up? While the government of Boric and Approved Dignity obey the monetary policies of the Central Bank and the targeted policies of the neoliberal model such as the Family Subsidy for low-income people (who only belong to 60% of the poorest households, not 60% of the population), they are not at all concerned that with the growing inflation our homes are becoming even more precarious and that we need a general increase in wages; Minister Marcel himself has declared that “We must properly balance both the demand for salary readjustment and job care” to face the next negotiation with the Unitary Central of Workers, which in turn proposes an insufficient minimum wage of $500,000 pesos. In times of greater scarcity for the working class, governments and businessmen talk about fiscal responsibility and resort to old myths such as: increasing wages would increase inflation because there is more money in circulation, they even continue to instill the idea that inflation would skyrocket if there is a new withdrawal of the AFPs.
The myth that the increase in the minimum wage would increase inflation stems from the fact that most of the collective agreements negotiated by the workers have the minimum wage as a floor and an increase in this implies an increase in the negotiation of wages in general. but the inflationary phenomenon today is not related to that. This myth is used by big business to keep wages low and increase or at least not decrease their rate of profit. Consequently, they negotiate to raise wages below inflation or raise it as low as possible in order to preserve their profits.
There is also no evidence that inflation is related to AFP withdrawals. In fact, the AFPs financed themselves by selling assets abroad, importing dollars and mitigating their price by reducing inflation; therefore, it is not the cause of this, in addition to the fact that a large part of these withdrawals returned to the banking institutions for payment of debts.
So, how is it explained that while our wages remain so low and lose purchasing power, businessmen continue to increase their profits?
The first response is that employers keep wages low to barely ensure the subsistence of the worker, replenish their strength to produce and ensure the reproduction of labor in order not to reduce their profit levels and thereby increase the exploitation of Workers. For example, of an 8-hour workday, only 3 are for wages and the remaining 5 are for the profits of the capitalists. This is directly related to unemployment and the existence of the so-called “industrial reserve army”, that is, millions of people without work who are willing to work for the least.
The second is that businessmen use collusion, which is when 3 or 4 large monopolies agree to keep prices higher for their own benefit. This is only possible due to the high concentration of ownership in some economic groups. While the FAO (Food and Agriculture Organization of the United Nations) indicates a downward variation of food in the price indices of cereals, vegetable oils and dairy products; In Chile, food prices continue to rise or do not decrease, for example.
The third element that explains why salaries in Chile are so low, regardless of inflation, is the nature of the economy itself. Chile has an economy that exports primary products with low added value (minerals, fish, fruits) and lacks scientific and industrial development. This prevents the creation of jobs with a high degree of qualification. A piece of information that clearly demonstrates this reality is that more than 98% of the jobs recovered after the pandemic are precarious (with a low level of social security, partial, etc.). Median working class wages are worse than 6 years ago. All the indices worsen for women where 3 out of 4 declare themselves breadwinners of the home. The only thing that the worker possesses is his labor power, which he sells as merchandise at the price imposed by the capitalist and if we consider that in our country the majority of workers do not bargain collectively.
While our life situation is getting worse, the leaders of the majority of the unions, federations and trade union centrals, instead of organizing the workers based on their real needs, sit down with the different governments and employers to negotiate the crumbs that fall of their tables. This must end. It is necessary that we prepare an urgent list of demands of the working class based on our real needs, which we discussed in this article.
#Increases #workers #poorer #day #businessmen #richer #day