Britain faces a summer of strikes as historic inflation and falling real wages bite – UK Time News

LONDON — Amid political turmoil, an economic crisis and the potential for massive industrial action, Britain faces a troubled and potentially pivotal summer.

Inflation in the UK hit a 40-year high of 9.4% a year in June and wage packages are not keeping pace, with real wages plunging and workers in all sectors becoming more dissatisfied.

The Office for National Statistics on Tuesday reported total wage increases 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 3.7% decline in real wages (adjusted for inflation) excluding bonuses, the worst year-on-year decline since the record start in 2001.

Workers across all pillars of the economy have voted for industrial action against below-inflation wage offers – including transport workers, firefighters, doctors, nurses, teachers, postmen, civil servants, lawyers and British Telecoms engineers.

The Fire Brigades Union said on Wednesday, the day after the London Fire Brigade experienced its busiest day since World War II, that “firefighters are leading the way in the climate emergency”.

“The demands of the job are increasing, but our resources have been under attack from government cutbacks for more than a decade – 11,500 firefighter jobs have been cut since 2010,” added FBU Secretary General Matt Wrack.

Public sector pay increases were at their lowest levels since 2017 in the latest data round, both with and without bonuses. Base salaries increased by 1.8%. The Bank of England expects inflation to peak around 11% before the end of the year.

“Jobs are close to 1.3 million, slightly more than the number of unemployed. That means that if everyone looking for a job could find a vacancy, regardless of their location and skills, there would still be a shortage.” Laith Khalaf noted. , chief of investment analysis at AJ Bell.

“Against such a backdrop, it’s no wonder companies are willing to shell out more to hire new staff and keep existing employees on the books.”

Khalaf acknowledged that the number of vacancies has fallen fractionally at the last reading, indicating that a normalization of the labor market may be in sight.

“But the major concern is that the higher wages paid by the private sector will serve to anchor inflation, while small wage increases in the public sector in the face of rising prices will continue to fuel industrial tensions,” he added. ready.

‘A story about two economies’

Britain came to a standstill a few weeks ago due to strikes by railway workers over working conditions, jobs and wages. Another 24-hour strike by members of the Rail, Maritime and Transport union will follow on 27 July.

On Tuesday, more than 115,000 Royal Mail workers, members of the Communication Workers Union, voted overwhelmingly to strike in a wage dispute, with 97.6% of members of a 77% turnout favoring union action.

Royal Mail’s British company, the country’s former state monopoly that was privatized in 2015 after nearly 500 years of government ownership, could be separated from the holding company after it lost £92 million ($110 million) in the first quarter. . Revenues fell by 11.5% as inflation pushed consumers to shop less online, while package volumes fell by 15%.

Terry Pullinger, deputy secretary-general of the CWU, told the UKTN on Wednesday that the 97.6% vote for industrial action was a “measure of anger” among Royal Mail employees.

“Royal Mail employees – key figures during the pandemic, always key figures – have been imposed a 2% (pay increase),” he said.

“When shareholders get millions of pounds from what those workers have done in the past year, and also the company leaders and board members give themselves huge wages, they give themselves huge bonuses, but only 2% is imposed on them. postmen, and that is unacceptable.”

UK energy regulator Ofgem raised its price cap by 54% in April to cushion rising wholesale prices, and analysts expect a further cap hike in October, which could see inflation well above current levels in the fall.

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

“The number of salaried employees and job openings continues to grow and remain at historically high levels, especially in face-to-face sectors such as healthcare and hospitality. However, overall vacancy growth is beginning to slow,” she said.

“Economic inactivity rates fell as those who had left the labor market re-entered the market, perhaps as a result of the cost of living crisis that forced people back into work.”

Ghosts of the 70s

The prospect of widespread industrial action has drawn parallels with 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 subsequently intensified and union membership declined in the decades that followed, with conservative politicians attempting to influence public opinion by labeling union leaders as greedy.

However, recent efforts by the major unions in the face of unprecedented pressure on working households are starting to gain momentum and have gained more public sympathy.

Last week – faced with a spate of strikes over the summer – the Conservative government of outgoing Prime Minister Boris Johnson passed a law allowing companies to replace striking workers with temporary workers in an attempt to undermine unions.

During the Prime Minister’s final questions in the House of Commons on Wednesday, Johnson accused Keir Starmer, leader of the main opposition Labor party, of “union barons pulling his strings from under him” and vowed to “ban wildcat strikes” – a continuation of the recent efforts to tie union members to the government’s political opposition.