When pawn shops do a brisk business, it’s not a good sign, as people are forced to throw away family values ​​in order to survive. Loans at H&T Group, the UK’s biggest pawnbroker, now exceed pre-Covid highs with no easing of lending criteria People are struggling to pay their accounts.

Discontent is being expressed in a variety of ways, including the rise of the public sector for the first time in decades strikes as workers struggle to protect their standard of living amid rising prices.

I first wrote an article about strikes in 1986, after more than two million days were lost to strikes in the 11 months from March 1984 to January 1985, but I didn’t write anything about strikes for a third of a century because there were not many of them. From 1933 to 1983 they averaged 420,000 per month, and since 1985 they have averaged 80,000 per month, with only one month of more than two million days lost due to labor disputes in July 1989. This decline in strike activity has been global due to the weakening of workers’ bargaining power due to globalization gig economy and government policies, particularly those of Reagan and Thatcher, that made it difficult to join unions, strike and picket.

Most strikes occur because one side underestimates the strength of the other, and more often than not they are due to poor management. You can’t legislate good industrial relations: the workers can always throw a wrench into the matter.

For the first time in decades, we are seeing public sector strikes on the railways and among lawyers as workers understandably try to protect their falling standards of living. Teachers and others who have seen their pay cut over the years have had enough and are threatening to strike as well. Mick Lynch, general secretary of the RMT rail workers, made a good case for the workers’ arguments and rejected the government’s claims that it was about militant unions, which of course it was not.

Workers are not to blame for the poor economic performance of the last decade or so. They have been burdened by weak wage growth, while Tory-voting pensioners have seen their incomes rise. In the private sector, wages could have been increased significantly, but firms chose not to and paid them to their CEOs and shareholders. A spiral of wages and prices is not inevitable. A wage increase should not lead to an increase in prices, as bosses and shareholders can easily absorb the hit – now it’s their turn.

Public sector pay cuts have been a direct policy choice by various Tory chancellors to shrink the public sector, illustrated by Prime Minister Johnson’s announcement that he intends to sack 100,000 civil servants. Paying less than the prevailing rates has led to workers with sales skills getting on their bikes, causing the quality of public services to deteriorate. NHS waiting times and more than 100,000 vacancies are a direct result of public workers being underpaid. If you want better services in the public sector, you have to pay higher wages.

A good sign is that the situation may be improving, as prices for many industrial goods have already started to fall, including fertilizers, timber, copper and semiconductors. Brent crude fell by 10% month-on-month. Shipping costs have also dropped.

Real earnings in the UK are still 2% below February 2008, just before the Great Recession. The recent strikes are the first sign of a shift in the balance between labor and capital.

Professor Blanchflower is a former member of the Bank of England’s Monetary Policy Committee


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