Inflation and Strikes

[mick]

I hesitate to be the first to introduce possible controversy. I don't mean this as a political thread, but I'm interested in the opinions of others.

There are lots of strikes mostly based on inflation linked claims for pay rises.

It seems to me that in the economic cycle of any country there are times when growth, and attendant increase in living standards, just isn't possible.  At those times, the population needs to accept that living standards may fall a little. 

I'm making the point that no one has a God given right to always keep pace with inflation. 

I know that this is simplistic and there are lots of issues I've ignored. What do you think of the basic premise?

I'm writing this as a pensioner who lost a double-digit tranche of his income through the effectively zero interest rates. As a pensioner whose pension can't keep up with inflation and a pensioner who, through age and health, can't get another source of income. My belt has been tightened several notches in recent years.

I've avoided who caused the inflation and I've tried to remain apolitical. Any chance that this thread could remain that way?

Mick.

[squeamishossifrage]

Difficult to keep this apolitical, but, to quote Harold Wilson, "One man's wage increase is another man's price increase."

Thus inflation causes further inflation, and those of us with a fixed income are stuffed!

[petrochemist]

I agree 100% Mick, the world is going through hard times & people have to just lump it.
Some of the strikes are adding hardship to people then who can't get to work as usual, so that they fall even lower below their accustomed living standards.

I do feel the nurses have been rather hard done by, given that during shut down they put themselves at significant risk for the rest of us. Recognition of this should have been forthcoming

[MJB]

If only the railway workers, postal workers, and probably other strikes were about high pay increases. Take the postal workers as an example. Their strike is about so-called reforms to working practices. These reforms include Royal Mail wanting to cut their hours during slack periods and making workers bank those missing hours then contractually obliging workers to cash-in those 'banked' hours in the run up to Christmas. So instead of voluntary overtime, they get just basic salary. That's a pay cut. Of course the bosses and the government don't want you to know that. The last time I looked the rail workers were asking for a 7% pay rise, which is a pay cut in real terms and 4% lower than the rate of inflation, and no compulsory redundancies in exchange for changes to working practices. When you see the salaries that executives in these businesses get and the profits the companies make, it's disgraceful that the government is forcing the companies to not negotiate with the workers. I speak as someone who got a 20% pay rise this year because my employers knew the value I bring to their business.

[kate]

Whenever the situation is as it is currently there are winners and losers. In the 70s, I was a winner and have to say I enjoyed it. Selfish, I know, but I had worked hard to get there in London and bearing in mind my journey to being confortably off was a hard one, I felt I deserved it.
We didn't time it well when we escaped London in the 80s, but that was for health reasons, so a necessary move.
Now I can look back at it all and look at what is happening now and see what will happen in the future.
More automation, less health services (take a self-help leaflet or pay for treatment) downsize, take what job you can, grit your teeth and start again. In the end, the young will win as will the already rich and powerful. The rest of us will fade away.

[Bipolar]

In Canada we are told officially that inflation is at just under 7% this year so far. The government uses that number to calculate increases in pensions and wages for people that have a cost of living clause in their contracts. Being the person that does the shopping for the household I am seeing price increases of items in the grocery store of as much as 50% clothing has gone up around 30% gasoline and heating fuel has gone up 20 to 30% as well. Rent and home prices has gone up more than 30% in the last year. A lot of people here are struggling to make ends meet. Trying to remain apolitical the people in charge are like children in a candy store with money doing all the wrong things to control the situation.

I found this newspaper clipping from June 1967. A modest home for sale for $7500.



This is what it was valued at last year for tax purposes which is probably about 20% less than it would sell for.

[zou]

If we were genuinely in 'hard times' the heads of the industries which are mostly affected by strikes wouldn't have taken home record salaries and dividends following huge increases in revenue. The situation is to a large extent manufactured, thanks to the economics of Thatcher and Reagan, but there is also the passive impact of cuts to regulations and how business can be asset stripped. Also, thanks to Thatcher and Reagan. So we ought instead to stand by our striking colleagues, and sign a refrain of ____ the Tories.

[peterba]

Dec 17, 2022 14:12:38 GMT zou said:

If we were genuinely in 'hard times' the heads of the industries which are mostly affected by strikes wouldn't have taken home record salaries and dividends following huge increases in revenue. The situation is to a large extent manufactured, thanks to the economics of Thatcher and Reagan, but there is also the passive impact of cuts to regulations and how business can be asset stripped. Also, thanks to Thatcher and Reagan. So we ought instead to stand by our striking colleagues, and sign a refrain of ____ the Tories.

I agree with all of that, Zou. I'd actually go further..... I think the current situation is entirely manufactured. A last gasp effort by the Tory Party before potential electoral meltdown. An attempt to stir up public opinion against the Unions, hoping that the association between Unions and the Labour Party will swing opinion against Labour, and back towards the Tories. They've demonstrated - time and again - just how low they will go.

[willien]

Not being up on sign language can I just sing the refrain instead?

Oh wait a minute, that refrain would be pretty easy to sign.

[petrochemist]

Dec 17, 2022 14:12:38 GMT zou said:

If we were genuinely in 'hard times' the heads of the industries which are mostly affected by strikes wouldn't have taken home record salaries and dividends following huge increases in revenue. The situation is to a large extent manufactured, thanks to the economics of Thatcher and Reagan, but there is also the passive impact of cuts to regulations and how business can be asset stripped. Also, thanks to Thatcher and Reagan. So we ought instead to stand by our striking colleagues, and sign a refrain of ____ the Tories.

The current hard times are down to covid, the ukraine & brexit (one off chemicals/parts etc for my work that used to be delivered within a week now take many months). Thatcher & Reagan had nothing to do with any of these.

[zou]

Dec 17, 2022 16:34:29 GMT petrochemist said:

Dec 17, 2022 14:12:38 GMT zou said:

If we were genuinely in 'hard times' the heads of the industries which are mostly affected by strikes wouldn't have taken home record salaries and dividends following huge increases in revenue. The situation is to a large extent manufactured, thanks to the economics of Thatcher and Reagan, but there is also the passive impact of cuts to regulations and how business can be asset stripped. Also, thanks to Thatcher and Reagan. So we ought instead to stand by our striking colleagues, and sign a refrain of ____ the Tories.

The current hard times are down to covid, the ukraine & brexit (one off chemicals/parts etc for my work that used to be delivered within a week now take many months). Thatcher & Reagan had nothing to do with any of these.

Covid has affected most of the world, but we don't see the same levels of inflation worldwide.

Ukraine is a red herring. The primary impact of the war on inflation is the increased cost of grains which were Ukraine's major export, and the increased cost of energy which is due to profiteering in the wake of the EU and UK choosing to sanction Russia. The deregulated energy market (Thatcher had something to do with that) means that when Europe, which was greatly reliant on Russian natural gas, chose to shut down that route, energy companies in the UK were able to sell to Europe for far higher prices than they would have achieved domestically, which in turn pushed up domestic prices. Then you have the choice by a Tory (Thatcher's lot, remember) government to not protect consumers, in favour of protecting the industry. Why? Because there was money to be made.

Sure, Brexit has something to do with it. But ideologically that's another Tory wet dream. The work Thatcher did to dismantle public services is one of the primary causes of the mess we are in - increased inequality, increased obscene wealth, increased poverty. Brexit was merely a tool to help deliver all these things.

[peterba]

Dec 17, 2022 16:34:29 GMT petrochemist said:

The current hard times are down to covid, the ukraine & brexit (one off chemicals/parts etc for my work that used to be delivered within a week now take many months). Thatcher & Reagan had nothing to do with any of these.

You forgot the £30+bn lost by Truss. That's two out of the four (the Truss mini-budget, and Brexit) having been visited upon us by the Tories. There's also a substantial slice of the cost of covid which is attributable to Tory corruption and incompetence.

[John Farrell]

Here we have inflation, too - not as bad as yours. We also have smug well paid economists telling the plebs that unemployment has to rise, to beat it. It has been noted that they don't mention cutting the profits of gouging businesses, or the obscene salaries of executives.

[Ivor E Tower]

Dec 17, 2022 11:24:31 GMT mick said:

I'm making the point that no one has a God given right to always keep pace with inflation. 

Mick.

Working in manufacturing in the south-east of England, I have to say that I agree with this. I've lost count of how many years it's been since I have had an "annual" pay rise, I've had to change jobs to secure a rise in income... in fact until a few months ago, I was earning less than I was about 5 years ago for various reasons. Covid didn't help, cost me one job then I couldn't find anything permanent until this past September.

Of course it would be nice to get an automatic increase every year but if your employer isn't making money, how do they afford a pay increase?
One problem is that those at the top are taking more and more for themselves whilst those at the bottom, who actually "do" the work rather than "manage" or "plan" have been left behind, and a percentage increase is obviously less helpful for them than the higher earners.  Whether or not the current strikes will result in a dramatic change and doing away with some of the obscenely high salaries and bonuses of people at the top, I don't know (but somehow I doubt it).
Unions striking may ultimately benefit their workforce, but for how long? Some industries have disappeared from the UK because the high wages have in time made the UK uncompetitive, so factories have shut and the work gone overseas... I wish that the trade union leaders could see that.  It still hurts when I see the figures being bandied around that so many staff working on trains get paid more that skilled engineers and designers with much experience and talent, yet the rail staff go home at the end of their shift with no worries about how to keep a business running in the future, how to sort out financing and investment for new plant and equipment etc etc.

IMHO the current crisis could simply have been averted by the government regulating and subsidising the cost of energy.  It would have stopped high gas and electricity bills, stopped increased transport costs being passed on by higher prices of food and all other goods etc, and then inflation would have been kept low and there wouldn't be a demand for significant wage rises with the accompanying strikes.  But  the furlough scheme meant that we would all be paying more in tax for some time anyway, it's a complete mess all of the government's doing - and not just the present government but governments going back 40, 50 years or more.  Too much vested interests in short-term gain (re-election) rather that thinking of longer term benefits to the country as a whole (TBH a bit like trade union thinking too......)

[Deleted]

Dec 17, 2022 17:17:41 GMT peterba said:

Dec 17, 2022 16:34:29 GMT petrochemist said:

The current hard times are down to covid, the ukraine & brexit (one off chemicals/parts etc for my work that used to be delivered within a week now take many months). Thatcher & Reagan had nothing to do with any of these.

You forgot the £30+bn lost by Truss. That's two out of the four (the Truss mini-budget, and Brexit) having been visited upon us by the Tories. There's also a substantial slice of the cost of covid which is attributable to Tory corruption and incompetence.

I have yet to see any convincing evidence that £30m was a real rather than a paper loss.