The UK faces strikes this summer due to historic inflation and falling real wages | Daily News Byte

LONDON – Amid political upheaval, an economic crisis and the prospect of collective industrial action, Britain is facing a troubled, and possibly pivotal, summer.

UK inflation hit a 40-year high of 9.4% year-on-year in June and pay packets are failing to keep pace, real wages are falling and workers across all sectors are becoming increasingly disaffected.

The Office for National Statistics on Tuesday reported total pay rises of 7.2% in the private sector and 1.5% in the public sector in the three months to the end of May, for an overall average of 6.2%.

This led to a drop in real wages – adjusted for inflation – of 3.7% excluding bonuses, the worst annual decline since records began in 2001.

Workers at the pillars of the economy – including transport workers, firefighters, doctors, nurses, teachers, postal workers, civil servants, lawyers and British telecoms engineers – are voting for industrial action over the offer of low inflation pay.

“Firefighters are at the forefront of the climate crisis,” the Fire Brigades Union said on Wednesday, a day after London’s fire service experienced its busiest day since World War II.

FBU general secretary Matt Rack added, “Job demand is growing, but our resources have been attacked by government cuts for more than a decade – 11,500 firefighter jobs have been cut since 2010.”

Public sector pay rises with and without bonuses were at their lowest level since 2017 in the latest round of data. Basic pay increased by 1.8%. The Bank of England expects inflation to reach around 11% before the end of the year.

“Job vacancies amount to about 1.3 million, which is slightly more than the number of unemployed people. That means that if every job seeker could be matched to a vacancy regardless of their location and skills, there would still be a shortage,” Leith said. Khalaf noted. , Head of Investment Analysis at AJ Bell.

“Against such a backdrop, it is not surprising that businesses are willing to cough up more to get new staff and keep current employees on the books.”

Khalaf acknowledged that the number of vacancies fell fractionally on the last reading, signaling that labor market normalization may be in sight.

“But the bigger concern is that higher wages paid by the private sector will fuel inflation, while lower wages seen in the public sector due to rising prices will perpetuate industrial tensions,” he added.

‘A Tale of Two Economies’

Britain was paralyzed several weeks ago by rail workers’ strike action over working conditions, jobs and wages. A further 24-hour walkout by members of the Rail, Maritime and Transport Union will take place on July 27.

On Tuesday, more than 115,000 Royal Mail The workers, members of the Communication Workers Union, voted overwhelmingly to go on strike over a dispute over pay, with 97.6% of members supporting industrial action, out of 77% of voters.

The UK business of Royal Mail, the country’s former state postal monopoly, privatized in 2015 after nearly 500 years of government ownership, may be spun off from a holding company after losing £92 million ($110 million) in the first quarter. Revenue fell 11.5% as inflation pressured consumers to cut back on online shopping, while parcel volumes were down 15%.

CWU deputy general secretary Terry Pullinger told the BBC on Wednesday that the 97.6% vote in favor of industrial action was a “measure of the anger” felt by Royal Mail workers.

“Royal Mail workers – key workers during the pandemic, key workers always – have had a 2% (pay rise) imposed on them,” he said.

“When shareholders are given millions of pounds in compensation for what those workers have done over the past year, and company leaders and board members are also giving themselves massive bonuses, they give themselves huge bonuses. , but only 2 on postal workers. % has been imposed, and is unacceptable.”

UK energy regulator Ofgem raised its price cap by 54% in April to accommodate rising wholesale prices, and analysts expect a further increase in the cap in October, which could push inflation well above its current level in the autumn.

Lauren Thomas, UK economist at Glassdoor, said the country’s red-hot labor market and falling real wages meant the country was facing a “tale of two economies”.

“The number of payroll employees and job vacancies continue to increase and remain at historically high levels, particularly in face-to-face industries including healthcare and hospitality. However, overall vacancy growth is beginning to slow,” she said.

“Economic inactivity rates fell as those who had left the job market re-entered, perhaps as a result of the cost of living crisis forcing people to return to work. Those who worked also saw no relief in both real regular pay and gross pay.”

Ghosts of the 1970s

The prospect of widespread industrial action has drawn parallels to the UK’s “winter of discontent” in 1978–79, when nearly 30 million working days were lost to strikes during a period of high inflation.

The country’s anti-strike laws were then tightened and union membership declined in the decades since, with conservative politicians trying to influence public opinion by portraying union leaders as greedy.

However, recent efforts by major unions have begun to gain momentum in light of the unprecedented squeeze on working households, and have met with greater public sympathy.

Last week – faced with a flood of strikes over the summer – outgoing Prime Minister Boris Johnson’s Conservative government passed legislation allowing companies to replace striking workers with agency staff in a bid to undermine unions.

Speaking in his final Prime Minister’s Questions in the House of Commons on Wednesday, Johnson accused main opposition Labor Party leader Keir Starr of “pulling the strings from under him by the union barons” and vowed to “outlaw wildcat strikes” – a trade unionist A continuation of the government’s recent efforts to connect with the political opposition.