Not only are working people in the U.S. and around the world struggling to keep up with out-of-control inflation, the third major global recession in 15 years appears to be just around the corner. The solutions offered by politicians and economists, such as raising interest rates, curbing wage growth, and cutting public spending, all require the burden of “fixing” the economy to be borne by those least responsible for causing the crisis, and least able to afford it – ordinary working people.
Is it true that our only choices are unmitigated inflation or brutal austerity and belt-tightening? No. This is a lie designed to protect the rich and powerful whose relentless drive to maximize profits at all costs is the real root cause of the instability now threatening the entire global economy.
Rather than passively accept the growing gap between our stagnant wages and skyrocketing costs of living, working people can and must put our own stamp on the processes shaping the economy. By getting organized in our workplaces and communities, we can have the power to win what they want us to believe is impossible: greater stability for ourselves and our neighbors now, mitigating the effects of their crises, while building the forces to fight for a more prosperous future, free from capitalism’s brutal loop of booms and busts.
Contrary to what many economists and politicians claim, wage growth is not a main driver of inflation. In reality, wages in the U.S. haven’t even come close to keeping up with productivity growth for decades. Inflation is a completely predictable result of the breakdown in global supply chains resulting from increased competition and geopolitical tensions between the U.S. and China, combined with “easy money” policies designed to keep financial markets afloat.
When Socialist Alternative began campaigning for a $15/hr minimum wage in Seattle and Minneapolis in 2015, news outlets exploded with dire warnings that such a “dramatic” wage increase would cause an inflationary crisis that would reverse any benefits working people would experience from getting a raise. But despite victories by the “15 Now” campaign in both cities, no such crises emerged. Instead, tens of thousands of low-wage workers were lifted out of poverty, and the upward pressure caused wages to rise for middle-income households as well. Inflation rates stayed consistent with pre-existing trends, but for the first time in a long time, a limit was placed on super-exploitation.
The unionization waves rippling through the service and logistics sectors over the past year show how the power to fight for higher wages on a mass scale can be built. Amazon workers across the country are raising the demand of a $30/hr starting wage as a central motivation of their efforts to form a union. With rent, gas, and grocery bills climbing each month, this demand is sure to resonate with a broad layer of workers. But Amazon has already launched a brutal union-busting campaign, proving that workers will need to be prepared to back up their demands with strike action if they hope to win.
It’s not just the bosses who are out to block workers from using our power to demand higher wages – Congressional Democrats including the Congressional Progressive Caucus and the “Squad” all fell in line behind Biden and voted to break the strike threatened by rail workers when their wage and time-off demands weren’t met by the rail bosses despite record-breaking profits in recent years.
Due to the universal pressure inflation is putting on workers, similar struggles are taking place across the country and in a variety of workplaces. In Minneapolis, bus drivers in the Amalgamated Transit Union (ATU) are demanding that their wages be tied to cost of living increases (COLA), so that future inflation can’t erase whatever raise they manage to win this year.
Members of the Union of Academic Workers (UAW) in the University of California system recently went on strike with the same demand. While they didn’t win their full demand of COLA+1, they were able to get their raises tied to broader price increases which is an important victory.
Historically, when inflationary pressures arise, the Federal bureaucracy comes under pressure to adjust the Consumer Price Index in ways that minimize the actual pain felt by workers. So on top of COLA demands, the unions need to fight for committees of working-class shoppers to create indices that reflect the actual spending patterns of workers. The more workers refuse to accept the status-quo and back up their demands with strike action, the stronger and more confident the working class will be as a whole heading into the next recession.
Control Housing Costs
The rapidly rising cost of housing is a symptom of rampant speculation by wealthy investors, but it’s ordinary renters and homeowners who are forced to swallow the costs. The most immediate way to reduce the burden of this crisis on working people is to stabilize prices by implementing broad, comprehensive rent control. Despite aggressive misinformation campaigns by big developers and their political supporters, rent control has been incredibly effective at stabilizing housing prices for ordinary people as long as it isn’t undermined by gaping loopholes.
Many cities have passed democratic rent control measures only to have them sabotaged by pro-developer politicians. New York City is the classic example cited by opponents of rent control. They claim that the current sky-high housing prices are a result of rent control laws implemented in the 1940’s. However, decades of exemptions and carve-outs have excluded most units from rent control protections. More recently in St. Paul, Minnesota, the Democratic Party undid a popular vote for strong rent control, eventually watering down the policy to be essentially toothless against price gouging from developers. Democratic politicians will fight to weaken any rent control provisions and fill it with loopholes and carve outs. Any housing movement that emerges will have to be prepared to fight for the strongest possible rent control legislation.
As part of a broad struggle for housing reform, workers need to fight for strong tenant protections, including protection against economic eviction. Socialist Alternative campaigned for this demand in Seattle where we have an elected City Councilmember, Kshama Sawant, and after years of grassroots mobilization our movement was able to win six months notice for all rent increases. Additionally, any increases over 10% require the landlord to provide tenants with the equivalent of three months’ rent to assist them in relocating. These measures disincentivize rent-gouging by landlords and make it possible for tenants to find alternative housing if their rent is raised beyond what they can afford. Without such protections, for many working people, rent hikes can result in homelessness.
Another key tenant protection that working people can fight for are caps on utility bills. This is especially important in places where energy usage – and therefore bills – fluctuate a lot due to intense seasonal changes. Particularly harsh winters or heat waves can cause spikes in energy demand, which drive up prices at the precise moment when cutting back on usage can be life-threatening.
This fight is one that can be directed at landlords, requiring that they cover any utility costs beyond the cap through rent reductions, and also at the major utility companies who wrack in unbelievable profits while squeezing working people dry. Beyond capping prices, this points towards the need to take utilities into democratic public ownership so the supply and price of basic necessities like energy and water can be determined by human need, not private greed.
Beyond important tenant protections, we have to also set our sights much higher. Housing is a right, and we need to take most rental property out of the hands of profiteers and into democratic public ownership, allowing prices to be set according to public need rather than profit maximization. This must be combined with the construction of high quality public houwing. These measures would decisively cut across the growing scourge of slumlords, private owners who fail to maintain safe housing conditions for their tenants, usually vulnerable people like single mothers, immigrants, and seniors who can’t afford to live anywhere else.
Free Healthcare, Education, And Social Programs
Decades of neoliberal austerity has left the U.S. working class with extraordinarily starved public services (if they exist at all). The U.S. is the only major country on earth that doesn’t guarantee healthcare as a right, meaning massive chunks of our paychecks wind up going toward medical bills that could otherwise be covered by a universal, public healthcare system.
We need to fight at the local, state, and federal level for major taxes on the rich and corporations to fund a dramatic expansion of public services. This includes fighting for an immediate transition to a Medicare for All healthcare system, funded by taxing the super rich and expropriating the massive wealth of the for-profit health insurance companies. It also includes fully funding public schools, establishing free and universal childcare, instituting generous sick and parental leave, guaranteeing free public college, and expanding and upgrading public transit.
A recent example of the kind of struggle that can win demands like these comes – again – from Seattle where socialist City Councilmember Kshama Sawant led the successful fight to tax Amazon to the tune of $210-240 million a year, creating tens of thousands of green union jobs by building permanently affordable social housing.
Get Organized, Strike Back!
All of these solutions share a common requirement – ordinary working people getting organized to fight for our own interests against the bosses and billionaires. The breaking of the railroad strike is the latest evidence that Democrats as well as Republicans are a key obstacle to workers organizing and fighting for our own interests.
Raising interest rates to drive more people out of work while denying workers the right to fight for higher wages demonstrates that a new independent party based on the power of organized labor and social movements is urgently necessary.
But we don’t need to wait for a new party to start getting organized in our workplaces, schools, and apartment buildings to fight for these demands right now. In fact, this kind of grassroots organizing will need to be the basis for any future party for working people. We need more workers to be unionized and willing to strike for higher wages, more tenants organized and willing to withhold rent to oppose rent hikes, and more students ready to shut down instruction and make bold public demands for free college, free healthcare, and an end to fossil fuel dependence.
None of these steps are easy to take and there is always inherent risk involved in fighting back. But not fighting back means leaving ourselves at the mercy of those already destroying the economy and the planet. This is the real choice for working people: not between inflation or austerity, but between fighting back or accepting powerlessness. Struggles breaking out all over the world today from Britain to Iran to China show that working people will not indefinitely accept helplessness. We will fight back, so let’s make sure we fight to win.