Inflation Crisis Hurts Workers

by Gray Hauff & Milena Germon

With the prices of everyday goods on the rise and wages failing to keep up, working-class people are looking for answers and economic alternatives. Essentials are rising in cost—gas, groceries, and rent, to name a major few—and nobody in power seems to be doing anything to help working people. 

In 2019, the regular gas prices in Boston ranged from $2.35 to $2.84. During the week of April 4th, 2022, the average price for the same gas in New England was $4.09. This is an increase of almost 60% over the past three years, most of which has happened recently. This is a tangible and real increase that many people are having to deal with daily in a country where alternatives like public transportation are minimal and systematically underfunded instead of expanded to help address the climate crisis. Mainstream corporate media has blamed the fuel price increases lately on the imperialist war in Ukraine, covering up for the greed of the fossil fuel companies who are making record profits. It now costs more money for many people to commute to their low-paying jobs while corporate bosses are increasingly requiring in-person attendance. This lowers workers’ real income, frequently forcing people to go without things they need and take multiple jobs to make ends meet.

Food is becoming more expensive. For example, in 2021, the price of poultry went up by 5.1%, fresh fruit by 5.5%, and beef and veal by a whopping 9.3%. People should not have to choose between filling up their car with gas to get to work or getting groceries for the week, but more and more working-class people are being pushed into a corner regarding their finances. Housing costs were unaffordable before the COVID recession—the cost to buy a home has risen a further 20% relative to the overall inflation rate since the onset of the pandemic. College costs have increased by 169% since 1980 but pay for young workers is up by just 19%. At the beginning of the year, 64% of workers in the U.S were living paycheck to paycheck, a situation which has only gotten worse during the current crisis. 

The authors themselves can vouch for these drastic changes. In tourist-oriented Maine for example, rent increases sharply each year without fail thanks to the newest high-end housing and hotel developments that push themselves into working-class neighborhoods. Rent increases arrive alongside steep price hikes for essential everyday goods, while demands for even a temporary increase in minimum wage have been systematically repressed by business. In turn, working-class Mainers are left to move towns, juggle multiple jobs, and drive themselves deeper into debt.

Prices too High, Wages too Low

Capitalists can’t give the majority of the working class a good standard of living. The very profits that the bosses and big corporations rely on come directly from exploiting the working class, by paying us less in wages than the amount of value we produce while working. If workers were actually paid the full value of our labor, then there would be nothing left over for the capitalist—who doesn’t work—to take home at the end of the day. Because profits come from exploiting workers’ labor, it is in the interest of the bosses to pay us minimally while forcing us to work more. But the less workers make, the less money we have to buy the things that are produced under capitalism, so the bosses can’t cash in their products for profits and the whole economic system to fall into crisis. 

The corporate media is clamoring about how the “Great Resignation” is the major driver of today’s inflation. The truth is the exact opposite. Recent wage increases made up for, at best, some of the ground lost to inflation over the past decades. Most of the ground gained was rapidly lost again due to the inflation spike this year. If the federal minimum wage had kept pace with gains in the economy’s productivity over the last 50 years, it would be nearly $26 an hour today. As a stopgap measure to avoid raising wages (and as another means of profit), capitalists have pushed workers to take on vast amounts of personal debt in order to ensure that we can still consume. But this measure only kicks the inevitable crisis down the road. Many families are paying for basics like groceries on credit cards because prices are too high and wages too low.  

Capitalists must find a way to profit from everything if they want to grow their wealth. They monopolize the production and distribution of basic human needs like food, water, housing, healthcare, transportation, and education solely for profit which is both exploitative and extremely inefficient. For-profit healthcare causes millions of people to suffer from preventable illnesses and diseases, which could have been caught and treated early if healthcare was free and accessible. For-profit housing leaves hundreds of thousands of people in the U.S. without shelter, despite the overabundance of housing units in this country. The all-consuming drive for profits under capitalism means that rather than everyone benefiting from the massive productive capacity of the world economy—which produces more than enough goods to meet everyone’s material needs—working people and the planet actually suffer because we earn too little and are forced to produce too much stuff! Workers should not have to pay the price for capitalist profiteering— everyone can afford a good standard of living if we take the economy under democratic control. 

The Independent Socialist Group calls for:

  • Raise the federal minimum wage to $20/hour, tied to the cost of living with no exemptions and no loss of benefits, as a step toward a living wage for all. 
  • For a three-year rent freeze on residential properties and other rent control combined with a massive expansion of high quality public housing. Democratic committees including homeowners and renters should control housing policy. 
  • Price controls: cap the costs of food, shelter, utilities, transportation, healthcare, and other necessities. Remove government subsidies that support corporate profits instead of workers’ basic needs. 
  • Massively expand public housing and transit, and establish universal healthcare by heavily taxing big corporations, the millionaires and billionaires, and drastically cutting military spending. 

Image Credit: rulenumberone2 via Flickr // (CC BY 2.0)