2022 ended with several reputable organisations producing Reports emphasising the scale of the “cost of living” pressures facing British workers, which are the root of the current “strike wave”.
The International Labour Organisation claimed, in its “Global Wage Report 2022–23”, that “for the first time this century, global real wage growth has become negative while real productivity has continued to grow. Indeed, 2022 shows the largest gap recorded since 1999 between real labour productivity growth and real wage growth in high-income countries”.
It will be of particular significance to British workers that this real wage decline has been noticeably worse, since 2008, in the UK than in many comparator countries:
This is despite the fact that productivity, whilst remaining low in Britain (most likely due to under-investment), has actually risen over the same period:
As the TUC commented in December: “a decade of stagnant pay has directly contributed to the current crisis, leaving many people unable to cope with a sudden rise in prices. While the “cost of living” crisis is often presented as a recent problem, it’s been building for years. The situation was already dire before energy bills began to rise. As we went into the pandemic, the number of people in poverty was at a record high, with the majority of those in poverty living in a working household. Household debt was also at a record high, as was food bank use and the number of people seeking debt advice”.
The TUC noted that: “UK workers are currently enduring the longest pay squeeze in more than 200 years – with average pay still worth £85 a month less than in 2008. And in the public sector average pay is down by £204 a month in real terms compared to 2008”.
“The analysis of official statistics reveals that real wages (that is, wages after the cost of living has been taken into account) have slumped by 3.0% over the course of 2022. This is the sharpest fall in real wages since 1977 and the second worst on record since 1945. Working people have lost, on average, £76 a month in 2022 as a result of their pay not keeping pace with inflation”.
PricewaterhouseCoopers (PwC), the all-purpose international consultancy, forecast in their economic outlook for 2023, that UK real wages were set to fall back to 2006 levels. The Office for Budget Responsibility predicted in October 2021 that Average real wages in the UK will still be lower in 2026 than they were in 2008.
Average figures, of course, are less useful the wider the band of inequality they cover. There does not seem to be any readily available statistic as to how many jobs actually pay the “average” wage, (£33,000pa!) but this chart from the ONS (“Earnings and employment from Pay As You Earn Real Time Information, UK: December 2022”) would suggest it is under 50%:
The Living Wage Foundation say that “12.2 per cent of employee jobs in the UK (3.5 million jobs) were paid below the Living Wage in April 2022, compared with 17.1 per cent (4.8 million employee jobs) in April 2021”.
Another significant deviation from the average is that public sector pay has fared worse than private sector pay since 2010. This chart, produced by BBC Newsnight’s Economics Editor Ben Chu, compares the experience of public and private sector workers:
This chart from the Nuffield Trust shows how real pay has fallen for staff across the NHS since 2010:
The TUC says that “Nurses are earning £5,000 a year less in real terms than they were in 2010. And for midwives and paramedics this rises to over £6,000”.
Writing in the “New Statesman” in December 2022, Anoosh Chakelian commented: “Every time workers threaten to go on strike in the UK, a little ritual ensues. The average wage of the sector in question is googled (just look at how searches for “rail salary” and “train driver salary” spiked when the rail strikes began in June). The googler in question – possibly based on how this compares with their own income, whether strikes inconvenience them personally, plus a dash of “could I do that job myself?” – then decides whether or not the industrial action is justified”. Ironically, many of the atomised, can’t see beyond the end of their nose types – most likely to be negative about workers defending their interests collectively – would be horrified to contemplate the degree of socialisation of the economy required to ensure that everyone just got paid “what they deserve”.
Rail workers can’t directly solve pay problems in the care sector. Unionised workers can’t directly solve the problems of the unorganised. But in addressing their sectoral issues, those workers who are both willing and able to take action to defend their own incomes are doing something that may, ultimately, benefit us all. We all know that things are getting worse, that food and energy prices are rising massively, that it’s becoming more and more difficult to keep warm and to feed oneself healthily. A victory by one group of workers can inspire and encourage others. Solidarity is a coin with two sides. On the one hand it means supporting fellow workers when they do take action in their own self-defence. But on the other, it also means that we can benefit from their success. We all want to refuse to be made poorer – and success in sectoral disputes may, just possibly, feed into a general change in what is regarded as socially and economically acceptable.