Britain faces heat of discontent over historic inflation and fall in real wages

LONDON – Amid political turmoil, an economic crisis and the prospect of large-scale industrial action, Britain faces a problematic and possibly decisive summer.

UK inflation comes down to one 40-year high of 9.4% annually in June And pay packets are failing to keep pace, real wages are falling and workers in all sectors are becoming more dissatisfied.

The Office for National Statistics on Tuesday reported overall 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, an average of 6.2% overall.

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

Employees of all pillars of the economy are voting for industrial action on wage proposals below inflation – including transport workers, firefighters, doctors, nurses, teachers, postal workers, civil servants, lawyers and British Telecom engineers.

The fire brigade union said on Wednesday the day after London’s fire service experienced its busiest day since World War IIThat “firefighters are at the forefront of the climate emergency.”

“Job demand is growing, but our resources have been under attack from government cuts for more than a decade – 11,500 firefighter jobs have been lost since 2010,” said FBU general secretary Matt Wreck.

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

Laith Khalaf said, “The job vacancies are about 1.3 million, which is slightly higher than the number of unemployed people. This means that if all the people looking for a job are combined with a vacancy ignoring their location and skills may go, even then there will be a shortage.” Head of investment analysis at AJ Bell.

“Against such a backdrop it is no surprise that businesses are willing to cough up more to get new employees and keep existing employees on the books.”

Khalaf acknowledged that the number of vacancies has partly declined in previous readings, indicating that a normalization of the labor market may be in sight.

“But the bigger concern is that higher wages paid by the private sector will serve to fuel inflation, while smaller wage increases due to rising prices in the public sector will continue to fuel industrial tensions,” he said.

‘The Tale of Two Economies’

Britain came to a halt several weeks before rail workers’ strike action over working conditions, jobs and pay. A 24-hour walkout by members of the Rail, Maritime and Transport Association will set in motion on July 27.

over 115,000 on Tuesday royal message Members of the Communication Workers’ Union voted overwhelmingly to go on strike over wages, with 97.6% of members supporting industrial action.

After nearly 500 years of government ownership, the UK business of the country’s former state postal monopoly Royal Mail may be spun off from the holding company in 2015 after losing £92 million ($110 million) in the first quarter. Revenue declined 11.5% as inflation squeezed consumers to reduce online purchases, while parcel volume was down 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 measure of anger” felt by Royal Mail employees.

“Royal Mail workers – key workers during the pandemic, key workers always – have been charged 2% (wage increase) on them,” he said.

“When shareholders are being paid millions of pounds on the back of what those employees have done over the past year or so, and company leaders and board members are paying themselves huge salaries, they find themselves huge. Bonus, but only 2% has been levied on postal workers, and this is unacceptable.”

UK energy regulator Offgame raised its price range by 54% in April to accommodate rising wholesale prices, and analysts expect a further increase in the cap in October, driving inflation well above its current levels in the fall. could.

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

“The number of paid employees and job vacancies continues to grow and remain historically high, especially in face-to-face industries including healthcare and hospitality. However, overall vacancy growth has slowed,” she said.

“The economic inactivity rate fell as those who left the job market re-entered, perhaps as a result of the cost of living crisis that forced people to go back to work. Even those who worked had real regular wages and total pay There was no relief with both.”

1970s ghosts

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

The country’s anti-strike laws later intensified and union membership dwindled over the decades, with conservative politicians trying to influence public opinion by marking union leaders as greedy.

However, in light of the unprecedented pressure on working families, recent efforts by major unions have begun to gain momentum, and have been met with more public sympathy.

Last week – faced with a flurry of strikes during the summer – the Conservative government of outgoing Prime Minister Boris Johnson passed a law allowing the striking workers to be replaced with agency workers in a bid to weaken unions.

Speaking in the House of Commons on Wednesday on his last prime ministerial questions, Johnson accused the leader of the main opposition Labor Party, Keir Starmer, of “the barons of the Union pulling their strings out from under him” and vowed a “wildcat strike”. Trench – a continuation of recent attempts to link trade unionists to political opposition to the government.