The UK has to face a summer strike as historical inflation and falling real wages bite

LONDON, ENGLAND – JUNE 25: View of the crowd at the RMT strike rally at Kings cross station on June 25, 2022 in London, UK. The biggest 30-year train strikes began on Monday night and again on Saturday, with trains in the UK being canceled for much of the week.

Guy Smallman / Getty Images

LONDON – Between political turmoil, the economic crisis and the potential for massive industrial action, Britain will have a problematic and perhaps crucial summer.

Inflation in the UK peaked at 9.4% year-on-year in June and wage packages are not keeping pace, plunging real wages and upsetting workers in all sectors.

The National Statistics Office on Tuesday reported a 7.2% total wage increase in the private sector and a 1.5% increase in the public sector in the three months to the end of May, averaging 6.2%.

This led to a 3.7% fall in real wages, adjusted for inflation, excluding bonuses, the sharpest drop in the year since records began in 2001.

Workers in the economic pillars have voted in favor of industrial action for under-inflation wage offers – including transport workers, firefighters, doctors, nurses, teachers, postal workers, civil servants, lawyers and British Telecoms engineers.

The fire brigade said on Wednesday that London’s fire service had experienced the busiest day since World War II and that the next day, “firefighters are at the forefront of a climate emergency.”

“Job requirements are growing, but our resources have been affected by government cuts for more than a decade – 11,500 firefighting jobs have been reduced since 2010,” added FBU General Secretary Matt Wrack.

Public sector wage increases in the last round of data were at their lowest level since 2017, both with and without bonuses. Basic salaries rose by 1.8%. The Bank of England expects inflation to peak at around 11% by the end of the year.

“Job vacancies are nearly 1.3 million, slightly higher than the number of unemployed. This means that if everyone looking for a job were matched with a job, regardless of their location and skills, there would still be a shortage,” Laith said. Khalafek. , Head of investment analysis at AJ Bell.

“In the face of such a scenario, it’s no surprise that companies are more willing to cough up to get new employees and keep existing employees on the books.”

Khalaf admitted that the number of jobs had fallen by a small fraction in the last reading, indicating that the normalization of the labor market could be seen.

“But there is great concern that higher wages paid by the private sector will serve to boost inflation, and that small wage increases seen in the public sector in the face of rising prices will continue to spark industrial tensions,” he added.

“The story of two economies”

Britain was stopped a few weeks ago as a result of the strike action by train workers over working conditions, jobs and wages. Members of the Train, Sea and Transportation union will hold another 24-hour outing on July 27th.

On Tuesday, more than 115,000 Royal League workers, members of the Communications Workers Union, voted overwhelmingly to go on strike over the wage dispute, with 97.6% of members of a 77% voter turnout supporting industrial action.

The UK’s Royal Mail business, which was privatized by the country’s former state postal monopoly in 2015 for nearly 500 years in government ownership, could split from the holding after losing £ 92m ($ 110m) in the first quarter. Revenue fell 11.5% as inflation forced consumers to cut back on online shopping, while package volume fell 15%.

TW Pullinger, the CWU’s deputy secretary general, told the BBC on Wednesday that a 97.6% vote in favor of industrial voting was a “measure of anger” felt by Royal League staff.

“Royal-level workers – the main pandemic-era workers, always the main workers – have been set at 2% (pay rise),” he said.

“When shareholders are given millions of pounds in exchange for what they have done in the last year, and in addition, company executives and members of the board pay themselves high salaries, give huge bonuses to themselves. yes ».

Ofgem UK energy regulator rose 54% in April to deal with the rise in wholesale prices, and analysts expect a further rise in October, which could lead to inflation above the current level in the autumn.

Lauren Thomas, a UK economist at Glassdoor, said the country’s red-hot labor market and falling real wages should confront the country with “a story of two economies”.

“The number of paid workers and job vacancies continues to grow and remains historically high, especially in healthcare and hospitality. However, overall growth in gaps has begun to slow,” he said.

“Activity-free rates fell as those re-entering the labor market re-entered, perhaps forcing the people to return to work as a result of the cost-of-living crisis. Even those who worked did not see lightness with real normal wages and total pay.”

The ghosts of the 1970s

The possibility of widespread industrial action has drawn parallels with the UK’s “unpleasant” winter of 1978-79, which saw nearly 30 million working days lost during strikes during high inflation.

Later, anti-strike legislation in the country intensified and union membership declined over the decades, with conservative politicians trying to overthrow public opinion by calling union leaders greedy.

However, the recent efforts of the major unions in the face of unprecedented hardship in the workplace have begun to gain strength and have been received with greater sympathy by the citizens.

Last week – in the face of numerous strikes over the summer – the Conservative government of Prime Minister Boris Johnson passed a law aimed at weakening unions that allow companies to replace workers on strike with agency workers.

Speaking at the prime minister’s final questions in the House of Commons on Wednesday, Johnson accused Keir Starmer of the main opposition Labor Party of “pulling the barons of the unions under him” and “outlawing forest strikes”. Continuation of recent efforts to link trade unionists with the political opposition of the government.

The UK has to face a summer strike as historical inflation and falling real wages bite

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