Trumpism vs. Wage Justice

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Hello and welcome. This is David Harvey celebrating the return of the Anti-Capitalist Chronicles, which is a product of politics in motion. We apologize for the delay and this emission, we had originally thought to do it on Halloween, but we had a major equipment malfunction, which made that impossible. So I could not go ahead on that day. I had imagined I would be talking about the hub goblins in the history of capital and celebrating it also because it happened to be also my 89th birthday. And that led me to think that I should reminisce somewhat about the differences between the world today and the world to in which I was growing up and coming to much more clear political convictions. So today, however, we are in a situation where there has been an election and there has been a result which many people found surprising. I didn't actually find it surprising.

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I thought it was very unlikely that somebody who was a woman of color would be elected president of these United States. And while there were moments when it seemed that something rather different could happen, it came together in roughly the way I would've imagined, which then leaves us to some interesting kind of questions about exactly what happened during this election and what we can say about the situation as a result of that. Now, I want to concentrate just on one aspect, and that aspect is one of the issues that was actually dominant in postmortems on who voted for what and why, and that issue was inflation. The question of inflation has been around for some time, of course, and been considerable political concern. It cropped up in the election in a very strident way, in the sense that the evident increase in cost of living, which had occurred over the last few years was very much according to Trump, a product of the Biden administration, and that therefore they should be held accountable for it because he would magically come along and change all of that.

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Well, I think there is something to be said about the question of inflation, and I want to do it however, in a rather different way from the way in which most of the postmortems of the election have been conducted. Most of them concentrate on the different, what the Latinos did, what Latino men did, what black men did, what white women did. And it was kind of a sort of puri of all kinds of identities, which should have been appealed to this way or that way, and which in the end voted for Trump. I want to simplify all of that, and I think the topic of inflation is a very good way to begin to do that. I simplified in the following way. I asked the question, how many people in the United States are trying to get by on less than $30,000 a year if you want to be a bit more generous, let's say $40,000 a year.

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Now, I can't actually give you exact figures or anything of that kind, but in New York City, before Covid came along, there were some data which suggested that 30% of the population of New York City was trying to get by are less than $30,000 a year. And now New York is a high cost market, which means that 30 half of the population of New York City is living in a kind of existential crack as it were, in which somehow the choice between paying the rent and putting food on the table is constantly in jeopardy in the sense that if you do one, you don't have enough left to do the other, and I'm going to deal with the rent question later on, but now I just want to concern myself with what life is like for that 50% of the population that is trying to get by on 30 or $40,000 a year.

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Now, I noticed this is a nice way to do it because I don't have to consider whether the person is black, white woman, transgender, or what. It just simply says, who has enough money to go into the supermarket and to buy the commodities they need to reproduce themselves at a reasonable cost of living. Now, the inflation rate shot up around the Covid period, and we got up as far as eight or 9% at one point. It became very vigorous indeed, and there were all sorts of reasons proposed as to why this was happening. But okay, it happened and it put a lot of stress on all of those people living on less than $40,000 a year. And that stress was something which had to be sort of lived with and worked out, and a lot of people were so stressed that they became homeless or they became reliant on charity in certain ways.

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So this is a very marginalized population, but on the other hand, you're talking about 50% of the population, and you would've thought that politics that address the conditions of 30 or 40% of the population or 50% of the population was something that needed to be thought through very carefully. And therefore, what the Democratic Party should have done is to articulate a program which is somehow or other going to alleviate the stresses that exist in that population. And if you've got 50% of the population on your side, because you've got a program which addresses their wants and needs, and it seems to me that chances of being elected president through United States are increased immeasurably. But however, the Democrats did not do that, and they did not do that. There was a very peculiar situation in which they did not do that because the inflation rate was coming down.

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In other words, if the inflation rate say in 20 21, 22 was up around eight or 9%, it was now coming down and the Federal Reserve was watching it very carefully and we were watching. And so the rate of inflation was coming down. It was coming down to sort of 2% or something of that kind, but it was still there. So 2% is 2% and 2% for somebody who's trying to live on less than $30,000 a year is not insignificant. So the rate was coming down, and most of the commentary that was going on within the media and within the Democratic party too, as far as I could tell, was to say, look, inflation is coming down so you shouldn't really be talking about it too much. It's not the big issue. And if so, it's a historical issue, rather the present issue. Well, it was not a present historical issue.

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It was very much a present issue and a present issue that was not going away because the inflation rate was coming down and everybody in the media and so was saying, so why are people making so much fuss about inflation? The rate coming down, the interest rates coming down, all of that's going on very nicely, very clearly. This is a good situation to be in. And we don't really have to talk through the inflation thing because it's basically coming down. Well, it's not because that population that's trying to live on less than $40,000 a year is actually experiencing inflation in a very particular way. That is, it's experiencing it through the price level. Now, the price level is very different from the rate. If the rate is coming down, the price level can still be going up. It's just going up at a slower rate.

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So the price rate and the price level is the key thing to look at because that is what people experience when they go into the supermarket. They don't go in there and say, oh, the rate of inflation on eggs is this, and the rate of inflation on bread is that they come in and they look at the price level and they have to adjust their purchases in relationship to the price level. So to them, what is happening to the rate is irrelevant. They think about the price level, all of the commentators and the democratic strategists and all the rest of it. We're talking about the rate. Now I've got into an argument in Marxian theory about rate versus mass, and I think that there's a tendency always for people to sort of concentrate on the rate of change rather than talk about the absolute level.

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But the absolute level was still going up even though the rate was coming down so that instead of the price level increasing by 8%, it was still increasing by something like 2% or 3% or something of that kind. So there is the situation, but the background to this situation is one which should have alerted us to a different way of talking about this inflation problem. Yeah, there's all those people with insufficient income to be able to adequately supply themselves with housing and healthcare and food and all the rest of it. They haven't got the resources to do that. So one of the problems, which means that inflation is a problem is the practice is that the wage rate is the problem, and here you have a situation where you really need to think about what's happened to the wage rate. We have lived in a world of wage repression, wage repression, which began in the 1980s and has continued to this day.

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In other words, wages have gone down relatively speaking in very important ways. And you can see that in the way in which the minimum wage has been treated historically since the 1980s, it's scarcity moved. And it takes a lot of consideration now to actually try to get it increased to $15 an hour. I mean, this is considered a very minister level, but look, we've had wage repression. People's wages have come down lower and lower. And one of the reasons that inflation is so hard is because the wage level is so low. I, for example, have a reasonable income. I have a reasonable steady income and I can deal with inflation. Okay? Because yeah, okay, things cost more. I can adjust here, there and ever. I don't go out to restaurants so much anymore because restaurants are becoming infinitely increasing in their prices. So I can handle it because I have a sufficient income.

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The problem for all that 50% of the population that is living on the edge is that the wage rate has not risen for them and their wages are insufficient so that any movement of prices, and if the prices are going up even a shadow a little bit, it has a big impact upon them because their wage rate is so low. And we get a good sign of this just recently, there have been two wage settlements that the unions have fought for, and the first were the United Auto Workers, and I can't remember exactly what it was, but they ended up with an increase of something like 25% or 29%, something like that. In other words, there was an admission there that negotiation, and in the final agreement that the wages had to go up by 29% or 25%. And then just more recently, the Boeing machinists, what happened with them, they negotiated and negotiated and negotiated and rejected and account, and then they came up with an increase of 40%.

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So what that's saying is that the reasonable wage, which was achieved in some elements of society in the 1960s and early 1970s in the United States, a reasonable wage would mean that we should increase the minimum wage by something like 40% like the machinists did, or 25% like the auto workers did. And that would mean that the minimum wage, which would really be okay, and invulnerable if you like, to the attack of inflation, the minimum wage should be increased by something like 40 or 50%, which means that minimum wage should go from what it is now, which I can't exactly remember, but we certainly go much higher than 15%, $15 an hour. It should go up to something like 28 or $29 an hour and a living wage as opposed to a minimum wage, which is the wage which would really, really required to support a family of four at a reasonable standard of living.

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The living wage should probably go up to something like $40 an hour now. So the problem about inflation was not really a problem about inflation. What it was really measuring was the vast number of people in this country who've suffered from wage repression over the last 40 or 50 years, and therefore what the Democrats should have done is to come out and said they wanted to deal with this wage repression. They wanted to reverse it. They wanted to do it in such a way as to alleviate all of that stress that is sitting there because of these rising prices, which were affecting what people were about. So this is the situation they should have been in, but they didn't do it, and they didn't know how to do it, and they didn't want to do it because at that point, they were being accused of being socialist and communist and all the rest of it, the typical kind of rhetoric of the right wing.

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So they got so nervous about it that they didn't want to touch the wage. And it was interesting that the kind of people who do talk about this, the social democratic wing of the Democratic Party like Bernie Sanders and Elizabeth Warren, the interesting thing was I didn't see them invited to go on the campaign trail. A OC was very quiet. I suspect that the Democratic party quietly mentioned to those people that they should take a backseat and not say anything very much because they would almost certainly Bernie Sanders would've said, we need a decent minimum wage. And that is part of the answer to this question of inflation, because inflation comes and goes, and there are inflations which are connected to wage rate increases. The inflation that we saw in this country over the last 10 years has not been connected to a wage. It's not a wage price spiral.

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It has a lot to do with all kinds of other things like conjun in the commodity chain, all kinds of things of that kind. And there probably was some inflationary impact of the sorts of programs that Biden put into place, but nowhere near explaining everything. So yeah, you could likely to see inflation to some degree occurring. And if it does, then the best way the society can deal with that and the impacts of that on population are to actually make sure that everybody has a wage rate, which is protection against impacts of any bump in inflation which occurs. But the Democrats didn't want to do that, and nobody wanted to really talk about that. But to me, it seemed obvious that this was something that needed to be done and it needs to be done.

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And I think the fact that many of those people who are trying to live on less than $40,000 a year, many of them probably voted for Trump because he would say, I'm going to deal with inflation. Everything's going to be okay. I'll look after you. I'll be big daddy for you, and all of that. So Trump managed to persuade them. The Democrats never articulated a program which was to that 50% of the population that is living on the edge, and that is what should be done. And it's democratic and its tradition at least was a little bit social democratic. And there are people within the Democratic party who are articulating some ideas about this, but they were silenced. They were put to one side, they were out of the picture, and Harris went out of her way to say she was just a pro capitalist and a small business and all the rest of it and hoped that that would work.

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Well, it didn't work. And I think that one of the reasons then that we are in the pickle we now are is because the failure of the Democratic party to actually come up with an answer to the question of what is the wage rate going to be in the future is are we going to continue with this wage repression? And that wage repression, by the way, has some macroeconomic consequences. One of the macroeconomic consequences is that the share of wages in national income has been cut significantly. I dunno whether it's been cut as much as in half since 1980. But the result of that is that the consumer capacity of that group in the population and the consumer capacity attaches to the wage rate determination is not really able to generate the demand, which is going to stimulate the economy. You can stimulate the economy through demand as well through production.

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So here is the way in which I think we could have improved, or the Democratic party could have improved radically its situation and could possibly have mobilized. And if it really pitched its ideas and its programs and articulated them to that 50%, then I think we would've had a different result. One other comment here is this, that in all of this, I don't have to discuss gender, ethnicity, race, all the rest of it. I'm simply dealing with how much income do people have? And some people are saying, well, that's not a class thing, is it? Well, no, it's not a class thing in the ordinary sense, but it is, I think, a way of thinking about a situation in which you take the majority of the living conditions of the majority of the population, or at least half of the population, and you seek to address them as clearly as you can through a political that is going to actually raise everybody's incomes in the way that the Boeing machinists have risen, which was, as I said, a 40% increase or UAW has been done, which is 28, 20 9% increase.

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That is the kind of thing which will actually pull away from wage repression. It will go any other way. It will be a program of wage augmentation. Wage augmentation will of course raise incomes, and as it raises incomes, it will raise consumption. In other words, this is a very healthy way in which an economy can actually look forward into the future, into a much more stable economic world. Instead of that, we've got the instabilities of Trumpism and all the craziness that's going on. It begins to look like he's designating a cabinet, which is essentially a ship of fools, and the ship of fools is going to sail merely upon the surface. And I think that it probably, there's going to be an almighty crash somewhere down the line. But we will talk about that aspect in the next podcast. Thank you very much.