the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Mar 14, 2022
From a public meeting given in Detroit on February 6, 2022
Good Afternoon. Today we will be talking about inflation, something that affects everybody in one way or another.
Let me start with a disclosure—In case you did not know, I am not an economist. And I do not have a Ph.D behind my name. But what I can see is how the issue of inflation affects everyone directly.
Almost every time you listen to the news nowadays, some company announces that it is raising prices. Just a few days ago, Starbucks and Amazon Prime both announced price increases (Jeff Bezos, the founder and biggest stockholder of Amazon, has a net worth of 180 billion dollars, so apparently that is not enough money for him.) Even more disappointing, Hershey’s announced price increases on their chocolate bars on Thursday. (That one drove me over the edge.)
I don’t think I am telling anyone in this room shocking news, that inflation is here and inflation is up. Just go to the gas station. We have had higher gas prices in the past, but they were often just temporary. This time the high gas prices have stuck.
According to WWJ radio, gas prices in Michigan are 82 cents a gallon higher than last year at this time. Gasoline prices have always fluctuated a lot. They use any excuse to raise prices—refinery fires. Or a hurricane in the Gulf of Mexico. Or a war in the Middle East. Or a snow storm. These events happen, and prices for gas go up and take a while to come down. But this time it seems different. Prices have gone up and stayed up.
And I am talking about the high gas prices affecting you, but that is assuming you have a car now. You don’t even want to think about buying a car now—new or used. The prices have gone up so much in the past year or so. Used cars are even worse than new cars. According to Edmunds.com, the prices for used cars and trucks went up over 30% last year. That is assuming you can find what you want to buy because the supply is scarce. The average price of a USED vehicle is now $29,000.
And if you do not own or lease a car and depend on public transportation, or train or air travel—this is not reliable. These are all still disrupted after 2 years of the pandemic. The Pandemic being ANOTHER problem that Capitalism cannot solve.
And what about food?—Prices at the grocery stores have gone up. Prices are rising at restaurants too. Everyone has to eat, so everyone is affected by the prices at the grocery stores or restaurants. (I will tell you in a few minutes what the chairman of Kroger’s has to say about inflation and their bottom line.)
And what about the other big requirement for everyone—a place to live. Housing prices, both rental and home ownership, are going up. In some parts of the country by a LOT. Florida, New York, Texas—are among some of the locations that rentals are going up the most.
According to most economists, they believe the higher inflation may be here for a while, so it is not just temporary. According to one prominent economist, the average family spent an extra $4,000 last year to keep up with price increases on food, housing, transportation, and more.
Back to inflation in general—the news media and the economists have excuses for why inflation is rising—the supply chain problems. The computer chip shortage. The ships sitting in Los Angeles harbor waiting to be unloaded. The extra money we were all given in the early days of the pandemic in the form of stimulus checks. All these are reasons given.
Regarding the supply chain issues and lack of workers—Is it truly, like the politicians say, that people don’t want to apply for these jobs? Or is it that wages are too low and management is doing their best to have as few people do the most work?
They tell us everything except the real reason for inflation—which is that companies are raising their prices, so that they can keep their profits up. We are going to come back to that in a minute.
So inflation is real and inflation is here. According to news reports, Consumer Prices have risen at the fastest pace since 1982.
Consumer prices in 2021, from January 1st through the end of November, officially went up 6.8%. Did people see their wages go up this amount? I don’t think so.
The Consumer Price Index that you hear quoted on the news does not necessarily accurately measure inflation. And there are advantages for businesses and the government to undercount inflation. Not just for lower Social Security payments, but, for example, how companies determine raises for their employees. Also—How deductions and exemptions on income tax are calculated. And more.
Inflation does not seem to bother the rich though. In fact just the opposite. Despite the inflation, the stock market has been at record highs over the past couple of years, despite inflation and despite the Covid pandemic.
There are MORE billionaires today than there were before the pandemic hit in early 2020. So SOME people are doing okay.
So who is profiting with the inflation? I’ll give you a hint, it’s not us!
Let’s look at corporate profits—they are at a record high. Two and a half trillion dollars for the most recent quarter, and even higher by some estimates. Corporations are using inflation as an excuse to raise prices and make even more profits. Corporate profits are actually going up faster than the rate of inflation. They are going up faster than they were before the pandemic. So they are profiting from the misery of the pandemic.
Here are some quotes from top executives of big corporations. Here is a statement from the Chief Financial Officer of Kroger’s: “We’ve been very comfortable with our ability to pass on the increase that we have seen at this point. And we would expect that to continue to be the case.”
Or here is another one from the Chief Executive Officer of another big company, Colgate-Palmolive Corporation: “What we are very good at is pricing. Whether it’s foreign exchange fluctuation or raw and packing material inflation, we have found ways over time to recover that in our (profit) margin line.”
So they are bragging about it, actually. They are making more money, more profits, at our expense. They are NOT being hurt. Approximately two thirds of the largest publicly traded U.S. companies have reported BIGGER profits in 2021 than they did in 2019, the year before the pandemic.
The reality is that corporations are using the EXCUSE of inflation to raise prices and make even bigger profits! The capitalist class that is profiting from inflation, is the same class that pushes speedup in the work places. It is the same class that tries to make do with as few employees as possible to keep their profit margin up. And the same class that tries to make more permanent workers into temporary workers.
And the capitalist class which the government props up has raided the money from the government for their own benefit, which for example, left the public health system in shambles leaving everyone vulnerable to the Covid pandemic.
A minute ago I mentioned there are MORE billionaires now than there were in early 2020 before the pandemic. In the United States the number went up from 614 to 745 billionaires in that short two-year period. Here are some numbers to explain what that means. I’m not trying to bore you with numbers, but…. For these billionaires, their cumulative wealth has gone up by 70% just since the beginning of the pandemic, even while some people are losing their jobs or their homes or are dying due to the pandemic.
These 745 billionaires, 745 total people, have more wealth than the combined wealth of the bottom 60% of all American households. This 60% of households represents about 200 million people So a record amount of wealth is being concentrated in these few hands of 745 people.
I could keep quoting statistics on this, but it would either make your head swim or make you angry. So I will stop there with the numbers.
In the face of this, the only reasonable answer for us is to make our wages go up every bit as much as prices do, and every bit as fast, immediately.
But that is not what happens. For example, let’s look at Social Security. We are told it gets raised almost every year based on inflation. People may have heard that, right? Well, sort of. Two things to remember—as I said a few minutes ago it is not as if even Social Security goes up based on the REAL rate of inflation. And the second thing to remember is that there is always a lag time. So for example, inflation officially went up by 7% last year. It is not until THIS year that you see the rise in Social Security benefits, and even then it only went up 5.9% instead of 7%. So you are a year behind and not even then catching up with inflation.
If you are working it is the same thing. People have heard about COLA—the Cost of Living Allowance? Very few union contracts even have a Cost of Living Allowance anymore. And even if they did, because for the very reasons I said above with Social Security you would not keep up with the actual rate of inflation, and there would be a year or more lag in catching up. So you are always getting farther behind. (Remember the old saying “The faster I go, the behinder I get”?)
To use a real life example, I am going to use where I work. I am part of the Bargaining Team for our Union, for State of Michigan employees. We have generally negotiated small wage increases for most years. We do not have a Cost of Living allowance, but still we get small increases basically every year.
Late last year we negotiated a 5% raise to go into effect for later this year. This is the biggest one year increase we have gotten since the 1980s. Part of our argument with the employer during bargaining was inflation and we needed a raise bigger than the normal 2 or 3%. Our members were quite happy with the raise and the contract passed by the biggest margin, ever. But looking back now, we are still losing because not only has the raise not gone into effect yet, but when it does it will be less than the official rate of inflation. Like I said, The faster you go, the behinder you get.
As I said earlier, the only reasonable answer is to make our wages go up as much as prices do, and immediately. But this is not something that can be gained at just one company, whether or not there is a union. If Ford, for example, gave an immediate catch-up to inflation, but General Motors did not, Ford would look less attractive to the big banks who pour money into companies to buy their stock. Ford could not compete in the financial markets with General Motors.
So it has to be at every company, every employer, private and government.
And of course we cannot count on them telling us the truth about their pricing, their real profits, and the real rate of inflation.
To get that we need a different kind of bookkeeping, one that depends on working people to know what is going on in all of these companies. We need them to provide the information, we need workers who gather it from all the different places that we work at.
Obviously, to establish something like this would cut into profits. The people who are doing so well today would not like it. In other words, they will not give it to us. The only way we will be able to get something like that is with a massive social struggle. And not just at a few places, but the whole working class.
Some people might say that that does not seem possible. But before people went in the streets to protest the murder of George Floyd in May of 2020, that kind of massive protest did not seem possible either.
The working class has the capacity to do this, as we are the largest class in this society and we make everything run.
So, we are not there right now. But this is what we need to discuss with as many people as possible. This is what the Working Class Party can discuss during the election campaign we will run this year, with as many candidates as there are people ready to be candidates, with all of them saying the same thing—We need wages that keep up with inflation, and we need a mechanism that working people set up to make sure it happens.