UK faces a summer of discontent as falling inflation and real wages trigger strikes

LONDON, ENGLAND – June 25, A view of the crowd at the RMT strike rally at Kings cross station on June 25, 2022 in London, UK. The biggest rail strikes in 30 years that began on Monday night continued on Thursday and again on Saturday, with trains canceled across the UK for much of the week.

Guy Smallman / Getty Images

LONDON – Amid political turmoil, an economic crisis and the potential for mass industrial activity, Britain faces a problematic and possibly pivotal summer.

Inflation in the UK is already at A 40-year high of 9.4% annually in June and pay packages are not keeping pace, with real wages falling and workers in the fields becoming more disgruntled.

The Office for National Statistics on Tuesday reported total wage growth of 7.2% in the private sector and 1.5% in the public sector in the three months to the end of May, with an overall average of 6. ,2%.

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

Workers across pillars of the economy voted for industrial action on the proposal to pay below inflation – including transport workers, firefighters, doctors, nurses, teachers , postal workers, civil servants, lawyers and engineers British telecommunications.

The Fire Federation said on Wednesday, a day after London’s fire service had the busiest day since World War IIthat “firefighters are at the forefront of the climate emergency.”

“The demands of the job are growing but our resources have been hit by government cuts for more than a decade – 11,500 firefighter jobs have been cut since 2010,” the Secretary-General said. FBU signing Matt Wrack added.

Public sector wage growth in the latest round of data was at its lowest level since 2017, both with and without bonuses. Basic salary increased by 1.8%. The Bank of England expects inflation to peak around 11% before the end of the year.

Laith Khalaf noted: “vacancy at nearly 1.3 million, slightly larger than the number of unemployed. , head of investment analysis at AJ Bell.

“In such a context, it’s not surprising that businesses are willing to spend extra money to get new employees and keep existing ones on the books.”

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

“But the big concern is that higher wages paid by the private sector will drag on inflation, while small public sector wage increases as prices skyrocket will continue to cause public stress,” he added. Karma”.

‘A Tale of Two Economies’

A few weeks ago, Britain had to stop working because railway workers went on strike over working conditions, jobs and wages. Another 24-hour walk by members of the Rail, Maritime and Transport alliance will take place on July 27.

On Tuesday, more than 115,000 Royal letter workers, a member of the Federation of Communications Workers, voted overwhelmingly to strike in the wage dispute, with 97.6% of members from 77% of voters supporting industrial action.

Royal Mail’s UK business, formerly the country’s state postal monopoly privatized in 2015 after nearly 500 years of government ownership, could separate from its parent company later when it lost £92 million ($110 million) in the first quarter. Revenue fell 11.5% as inflation led consumers to reduce online shopping, while parcel volumes fell 15%.

CWU Deputy Secretary General Terry Pullinger told the BBC on Wednesday that 97.6% of the vote in favor of industrial action was a “gauge of anger” among Royal Mail workers.

He said: “Royal Mail workers – key workers during the pandemic, always key workers – have had a 2% (wage increase) imposed on them.

“As shareholders receive millions of pounds for what those workers have done in the past year or so, and company leaders and board members are rewarding themselves with huge salaries, they are giving themselves huge bonuses. , but only 2% is being applied to postal workers and that is unacceptable.”

UK energy regulator Ofgem raised the price cap to 54% in April to accommodate rising wholesale prices and analysts expect a further increase to the cap in October, which could inflation could rise above current levels in the fall.

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

“The number of paid employees and vacancies continues to grow and remains at historic highs, particularly in direct industries including healthcare and hospitality. vacancies in general have started to slow down,” she said.

“The rate of economic shutdowns dropped as those who had left the job market returned to the job market, perhaps as the cost of living crisis forced people back to work. working people also see no relief with both real and total wages falling.”

Ghosts of the 1970s

The prospect of widespread industrial activity led to the UK’s “winter of discontent” in 1978-1979, when nearly 30 million working days were lost to strikes during a period of high inflation. .

The country’s anti-strike laws have since strengthened and union membership has dwindled in the decades since, with Conservative politicians attempting to shock public opinion by depicting leaders unions are greedy.

However, recent efforts from major unions to squeeze working households like never before have begun to gain momentum and gain more public approval.

Last week – facing a series of strikes throughout the summer – the Conservative government of outgoing Prime Minister Boris Johnson passed legislation allowing companies to replace striking workers with agency staff in order to destroy unions.

Speaking at the Prime Minister’s Final Question in the House of Commons on Wednesday, Johnson accused Keir Starmer, leader of the main opposition Labor Party, of letting “union barons pull the strings from below him” and vows to “ignore lawless strikes” – a continuation of recent efforts to tie unionists to the government’s political opposition.

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