The Impact Of Fewer Strikes Upon Wages

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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?