Record shareholder pay-outs: why should the working class go along with it?

17 April 2019

While Westminster’s Brexit “panto” remains stuck in suspended animation, real life carries on of course.  But for British shareholders it’s “life” like never before!
    The economy may still not have recovered yet from the 2008 banking crash.  It may still be dragged down by the fall in the pound’s value and “Brexit uncertainty”.  But despite this sorry mess created by the capitalists and their ever-erring politicians, the latest news is that shareholders’ dividends have hit a record high - the highest since March 2009!  We are told they were just a “whisker” under £100 billion for 2018!
     In fact the “UK Dividend Monitor” says that the “yield” on UK shares - at 5% for the top 100 companies - is “exceptional” and the largest in 30 years.  For sure, it is alright for some...

They get rich, we get poor

So what is behind this ridiculous increase in pay-outs for shareholders?
    We know that while prices of many products went up due to Brexit inflation and workers ended up paying though the nose for this, many bosses experienced a bonanza.  And this was partly because many companies (eg., BP, Royal Dutch Shell, the big mining companies, British American Tobacco, etc.,) make most of their profits abroad.  So they were able to cash in on the fall in the value of sterling.
    But over and above that, there was a huge increase in the exploitation of the workforce - not just here in Britain - but worldwide.  This has been implemented through increasing work intensity, cutting wages directly, or via casualisation, using dodgy zero-hours contracts, subcontracting, or multi-tiering.  Yes, so much so, that “equal pay for equal work” is becoming just a vague memory!
    Put it this way:  since the financial crash 10 years ago, the dividends paid to shareholders have increased by a massive 85%!  In March, the institute of Fiscal Studies showed the median income of working people recorded 0% growth - after inflation adjustments for the same period!  Wages remain at a record low, still below their 2008 level!  In fact, on average, we’re told, workers are £12/week worse off than before the 2016 Brexit referendum.
    So who are the big winners in this absurdly unequal system?  Among the companies dishing out the most lavish dividends are GlaxoSmithKline and AstraZeneca, both pharmaceutical companies.  And both of them rely heavily on leeching their huge profits out of the NHS - that same NHS which is falling to bits today!
    Big companies could not care less that they are screwing the working class through increased exploitation (20% of working households are in poverty today), or through their gross and greedy parasitising of public expenditure.

It’s them or us!

Having responded to the last crisis, which narrowed down the world market, companies - especially, but not only, in the car industry - are now already preparing themselves for the next crisis, which is widely predicted to be hitting any time soon.
    They are tightening up production, restructuring their businesses and announcing plans to increase their future profits, come what may, on workers’ backs, of course.
    Take Ford’s planned cuts in European production (including British sites) and its desire to increase profit margins to 6%.  Whether or not Brexit had happened, this was Ford’s intention.  But Brexit has given Ford, and others, a convenient pretext to widen the scope of their cost-cutting.  And they try to blackmail the workforce through the mouths of union leaderships, who explain that there “is no other way”, but to bend over backwards to help.
    In fact the question for the working class is not Brexit or not, (or other such diversions), but how prepared it is to face the new and much harder squeeze on living standards, which the bosses and their politicians have in store.
    And it is definitely not by offering to be “nice” to the bosses; offering to “help” them in these “difficult times” as, for instance union leaderships propose, behind their weak threats, that our future interests can be protected.  As if there were not two antagonistic sides in this capitalist world - capital and labour - with opposing interests!  And as if the balance of forces in the ongoing (hidden or open) battle between the two, wasn’t the determining factor in how well or badly workers are doing!
    If the working class is to make it through the next crisis, it will need to face the task in hand and collectively challenge, head-on, the right of the capitalist class to turn the screw of exploitation on us at all.  That challenge is long overdue.