A pamphlet by Costas Lapavitsasis Professor of Economics at the School of Oriental and African Studies and convenor at European Research Network on Social and Economic Policy., James Meadway is Director of the Progressive Economy Forum. & Doug Nicholls Doug Nicholls is General Secretary at the General Federation of Trade Unions. . With research assistance by Matteo Giordano.
1. Introduction
The “cost of living crisis” in the UK can be simply summed up: prices, especially of essentials, are too high, and wages, and other working-class incomes are too low. The basic steps to resolving the crisis are simple: prices, especially of essentials, must be brought down, and wages, salaries, benefits, and pensions must be increased.
This pamphlet shows that the big businesses dominating production and distribution make huge profits out of high inflation, while working people lose out. It sets out factual evidence to illustrate that the source of record profits is the fall in real wages as inflation rises. A large part of the income of working people is transferred directly into the profits of big business.
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The pamphlet is the product of close collaboration between the General Federation of Trade Unions (GFTU), the Progressive Economics Forum (PEF), and the European Research Network on Social and Economic Policy (EReNSEP) at the School of Oriental and African Studies, University of London (SOAS). We wanted to produce a tool for education courses, a strong set of arguments to strengthen campaigning by placing the current crisis in a historical context, and to look forward to fresh solutions. Naturally along the way we had to bust the myths spoken daily about inflation, usually by those who benefit most from it.