Austerity measures for working people and gifts galore for capital-owners

Lutte Ouvrière workplace newsletter
27 August 2018

The wealth of the richest is sky-rocketing. Corporate profits and dividends are reaching historical levels. The salaries of CEOs and senior executives are climbing ever higher. Speculation is making fat cats fatter and fatter... But for the great mass of the population, what lies ahead is a new dose of austerity.

Interviewed by a Sunday newspaper, the Prime Minister announced a virtual freeze on pensions and on family and housing benefits for 2019 and 2020. These benefits will only increase by 0.3%, while the prices of energy and fresh produce have already increased by 14% and 6% respectively. This loss of purchasing power is another blow to retirees, who have already been hit by the rise of the CSG[1] and to the millions of families who are struggling to make ends meet.

To justify these measures, Prime Minister Edouard Philippe keeps repeating that the government has chosen to “value work”. To support that claim, he has confirmed the suppression of social security contributions on overtime pay. This, he argues, will “make work pay more". But in a society based on exploitation, work doesn’t make you a lot of  money, capital does! Money makes money and those who own it continue to accumulate millions and billions in dividends, without even lifting a finger.

 The work done by nursing assistants and nurses, manual and clerical workers, cashiers, railroad workers, technicians, teachers... is essential, but it doesn’t pay. Workloads have increased in every area of work and so has the pressure to work faster and to be more productive. Yet wages have not followed. Many workers are forced to work overtime or night shifts or on Sundays, precisely because work doesn't pay enough!

The government claims that it values work above all else. But in fact, it supports job cuts, including by companies that are thriving. As a result, one-third of the 40 biggest French companies, which are all reaping dazzling profits, continue to slash jobs. The government itself is going to increase unemployment by cutting 4,500 jobs in the public sector in 2019 and 10,000 more in 2020. It has also nearly done away with government-subsidized jobs ("contrats aidés")[2].

Employers are the big winners of the 2019 budget. Previous governments offered tax credits, like the CICE[3], to employers but come next year, their social contributions will be  reduced on a permanent basis. And the idea of asking bosses to directly finance sick leaves has been abandoned because, in the words of Labor Minister Pénicaud, “the government must maintain its 'pro-business' image”.

Yes, even if such an image makes them unpopular, Macron and his government are proudly pro-business. They cater to the bankers and the rich in general. And they do it quite openly. That is the only noticeable difference between Macron and his predecessors. For the rest, Macron's policy is simply the continuation of Sarkozy's and Hollande's attacks against the workers.

This anti-working class policy was not invented by Macron, nor is it limited to France. The offensive against workers' rights, against their wages and their living conditions is being carried out everywhere. Only the contexts differ—with the Brexit in the UK or hyperinflation and economic collapse in Turkey.

This policy is in line with the economic and social situation. Because of the crisis, the markets are saturated and competition is exacerbated. This allows finance to dominate the whole economy. Capital can only develop--and the bourgeoisie can only get richer--by attacking the workers, their rights, their wages, their working conditions.

In such a context, bourgeois governments must be aggressively anti-working class if they want to defend the propertied classes. Today, Macron and his policy are falling in the polls. This setback is entirely justified. But to preserve our material and political interests, the working class must not be content with challenging Macron. We must call into question the domination of the capitalist class and the blind laws of their system.

The capitalist system is rotten to the core. It spreads all kinds of inequalities and is responsible for the permanent crisis we live in. It fuels commercial wars and military aggression.  The bourgeoisie feeds off this system, but it does not control it and it pushes society closer and closer to catastrophe. Only workers, when they are conscious of their material and political interests, can open up a perspective for the exploited, for the victims of this social order, and save society from total collapse.

[1] CSG (Contribution sociale généralisée) : a supplementary social security contribution created in 1991 by Rocard's Socialist government. It “extended” the tax base to include retirement and disability pensions, unemployment and early retirement benefits, etc. and provided for lesser contributions by the bosses. Its rate has been increased over the years and the CSG is now bigger than income tax. It finances over 20% of all social security expenses and is paid mostly by workers themselves (over 90%). Macron further increased the rate on retirement pensions on January 1, 2018.

[2] These job contracts depend upon government subsidies to the employer.

[3] CICE: a tax credit scheme adopted under Socialist Prime Minister Ayrault in 2012. It was officially designed to help French companies improve their competitiveness and create jobs. But for lack of control, the money went to the bosses and shareholders.