A picture of a Richard Murphy

Economics can indeed be a little difficult. It’s always – and because we can’t run controlled experiments, have to rely upon natural ones, always will be – difficult to separate out cause from effect. For example, why might we have fewer strikes these days? Could be the crushing of union power. Could be that everyone’s so damn copacetic that they can’t be bothered to strike. We can go further too. What’s the message about wages we gain from few strikes?

Is it union labour power, being able to strike, which raises wages? Or might it be the absence of wage rises which creates strikes? Or might they not be related very much at all in reality, despite what we can ponder in theory?

At which point we’ve the Senior Lecturer in International Political Economy at Islington Technical College, who presents us with this little chart:

From taxresearch

About which he says:

They went on to gloatingly note that there were fewer days lost to strikes in the last year than in any other since records began in 1891.

I, of course, note that this is an obvious explanation for stagnant wages within the UK economy that are having a massive impact on well-being and poor growth.

Hmm, well, that’s interesting:

The 10 years between 2010 and 2020 are set to be the worst decade for pay growth in almost a century, and the third worst since the 1860s, according to new research.

Research from the House of Commons Library shows that real-terms wage growth is forecast by the Office for Budget Responsibility to average at just 6.2% in this decade, compared with 12.7% between 2000 and 2010.

The figures show that real-terms wage growth was lower only in the decades between 1920 and 1930 and between 1900 and 1910. Wage growth averaged at 1.5% in the 1920s and at 1.8% in the 1900s.

So, lots of strikes in 1900-1910, beaucoup de strikes in 1920-1930, near no strikes now. And yet those are the three decades with the lowest wage rises over the past century and a bit.

That “obvious” is doing a lot of work in that explanation, isn’t it? We’ve not even got correlation let alone causality.

I dunno, maybe that expansion of the universities wasn’t the bestest idea ever?

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8 COMMENTS

  1. A strike is essentially an attempt to extract above-market wages, not based on productivity but on the threat or the reality of coordinated misbehavior for which there is no redress. Successful strikes cannot be a system-wide phenomenon, as only at Lake Wobegon is “everyone above average.”

    Murphy writes that “I, of course, note that this is an obvious explanation for stagnant wages.” Of course, anything is an obvious explanation for anything, if one has sufficient column-inches. Far from seeking either correlation or causation, Murphy has proven many times over that he is not here to measure anything but to shill for bigger government.

    In the US, what is left of labor unions primarily launders dues to one of the two major political parties. Appeal to employee recruitment is a far larger influence toward good work conditions. There is no union to demand all the Coke you can drink at Microsoft. Union grievances primarily enable on-the-job excuse-making and diversions from production such as debating whether free workplace speech constituted a “threatening work environment.”

  2. In a proper free labour market a strike is indeed an attempt to get above market wages.
    However in a monopsony a strike may be necessary to get market rates. Hence the unions grew in places where monopsonies existed, and today they lobby for the creation of new ones- the ulterior motive for nationalisation.

  3. Memory dims with time, but as a survivor of the pre-Thatcher Socialist era in the UK, I recall it often pointed out at the time that most strikes were not about wages.

    They were about things like, not enough soap in the lavvies, or brand of lav roll, longer tea-breaks, canteen facilities, union recognition, dĂ©marcation issues such as a plumber picked up an electrician’s screwdriver (gasp!), paid time off for shop stewards to attend union junkets, NHS cuts – yes even back then, solidarity with workers in Chile… quite a long and varied list in fact.

  4. If you want a few more strikes then may I suggest a Labour Government? We’ve had ours for a little over 6 months now and they’ve managed to get more strikes going than the previous, right-wing, Government had over their 9 years in power.

    Haven’t had a pay rise yet though – but if it is entirely down to number of strikes then we are all going to be in the money soon!