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Opinion

Strikes will have a seismic impact for UK workers in 2023

Labour shortages have given workers new power – but will strikes lead to higher wages? James Meadway of the Progressive Economy Forum takes a look

The end of the year saw a bursting of the banks of industrial discontent in a way the country has not seen for decades.

Railway workers, locked in a dispute since the summer, were joined by civil servants, postal workers, university lecturers, bus drivers, nurses, driving instructors and others in a wave of industrial action leading up to Christmas and beyond.

The sources of discontent are obvious: prices, especially of essentials like food and energy, have skyrocketed in the last year, resulting in the worst squeeze on living standards for generations. Taking account of price increases, average wages have fallen back to the level they were at before the financial crisis of 2008. 

Something has shifted in Britain since the pandemic. 2022 will have seen the highest number of strike days taken in Britain since 1989. In every single year from the end of the Second World War to 1989, at least 1.4 million strike days were taken. In every single year since 1989, never more than 1.4 million strike days were taken. 

In 1979, over half of all employees were in a union. Union organisation was the primary line of defence for those at work, so that, even when inflation rose, it was still possible for workers to claw back pay. It meant that while inflation was consistently higher in the 1970s than today, pay rises on average were higher still – so “real pay”, in other words taking account of price rises, was still increasing. 

And this tended to benefit workers across the whole economy. Different groups of workers had different capacities to organise and campaign – so that when the country was dependent on coal, for example, coal miners had a real power, which they exercised successfully in 1972 and 1974. But success bred success – the ability of one group of workers to win their demands would inspire others to do the same, including among lower-paid workers. The result overall was to help lower inequality. 

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The contrast with today is stark. Since 2010, when the Coalition government first started pushing austerity spending cuts, average real wages have barely grown. Inequality is far higher today, with the increase in the value of wealth, especially property wealth, soaring far ahead of the value of wages.

But whilst the 2010s saw protest movements against austerity, union organisation remained moribund. A tiny 12 per cent of workers in the private sector are actually in a union, and in that same year of 2017, the number of strikes recorded was the lowest since official figures began in 1891. 

It was the pandemic that changed all this. First, and most obviously, the aftershocks of lockdowns across the world have led to a sharp increase in prices. Even before Russia invaded Ukraine inflation was starting to pick up, eating into the real value of people’s wages and salaries. They had good reason to be angry.  

Second, the pandemic disrupted labour markets, which will at least partly reflect the poorly understood impacts of “long Covid”. One in five people have removed themselves from the labour market. This has meant fewer workers to do the work – resulting in record vacancies in nursing and hospitality, with 1.3 million unfilled jobs across the whole economy. The disruption of Brexit has also played a part, with widely reported shortages of workers in agriculture and road haulage.  

But this labour shortage has given workers new power  – either individually, as we saw in last summer’s “great resignation”, with job-switching hitting all-time highs, or collectively, as we are starting to see now in strikes. 

The crucial factors in the next few months are first, the willingness of government to concede. Establishment voices like Nick Macpherson, former permanent secretary of the Treasury, have come out in favour of government making a big pay award to public sector workers. They recognise the severe dangers of allowing a crisis situation in the NHS and other essential services to fester.

We can certainly afford to pay striking workers. As the BBC’s Reality Check has now exposed, the true cost of meeting the public sector pay demands is not the government’s figure of £28billion, but, once you take account of the pay rises already paid for and the higher taxes better pay produces, closer to £12bn.

The fall in the cost of government borrowing since Liz Truss and Kwasi Kwarteng left office is close to enough to cover this. Or else we could look more seriously at taxing the very wealthiest – for example in raising £16bn from equalising the tax paid on capital gains with incomes. 

The danger for the government is that, if they concede to the nurses or the RMT, other workers will demand the same. They will be pinning their hopes on the coming recession, with rising unemployment the classic way to frighten workers and break unions, and that higher prices will continue to force the early retired back into work. The hope for the unions, and so for all of us, is that their gamble on time does not pay off.  

James Meadway is director of the Progressive Economy Forum

This article appears in The Big Issue magazine. Buy a copy from your local vendor.If you can’t buy in person, you can purchase magazines from The Big Issue Shop or download a digital version via The Big Issue app, available now from the App Store or Google Play.

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