Strike! Explaining trade unions, strikes and if there’s more to come…

Image by Wilfried Pohnke from Pixabay

If you’ve tried to catch the train over the last few days, it’s highly likely you will have found yourself in a relatively empty, or even deserted, station with no trains running.

In the last week, there have been three days of industrial action, as well as a one-day shutdown of the London Underground, as around 40,000 rail workers went on strike. Only about 20% of the usual rail service has been able to run which has caused disruption for people travelling across the UK (1).

Who has organised these strikes and why?

The National Union of Rail, Maritime and Transport Workers — better known as simply the RMT — are a trade union with over 83,000 members from almost every sector of the transport industry.

RMT members, who work in rail, voted on strike action in May. 71% of all people balloted (asked to vote) took part and 89% voted in favour of strike action.

The RMT represents a large number of rail workers, but it should be noted that the organisation states that this strike is not about train drivers, most of whom are represented by a different union. The graphic below, from the RMT, shows some of the professions they represent.

Graphic from RMT

The RMT explains they are striking for a number of reasons including changes to pension schemes which means that staff have to contribute more and work for longer, job cuts across the rail network, pay increases which are below that of inflation, and changes to terms and conditions of workers (4).

What exactly is a trade union?

According to Gov.uk, trade unions, often referred to as ‘unions’, are organisations whose members are usually workers or employees. Trade unions are responsible for:

• negotiating agreements with employers on pay and conditions
• discussing big changes like large-scale redundancy
• discussing members’ concerns with employers
• going with members to disciplinary and grievance meetings (5)

There is usually a subscription/membership fee, or ‘subs’, to pay which fund the activities of the trade union.

However, trade unions can also organise ‘industrial action’ (strikes) if they are unable to settle disputes with employers through negotiations — just like has happened with the RMT.

For this to occur, the trade union must organise a postal vote (known as a ballot), members vote and, if the vote passes, then the union must give advanced notice of the strikes to the employer (6). You can find out your rights if you take part in industrial action by clicking here.

What does inflation have to do with the dispute?

One of the biggest factors of the dispute is the fact that the pay of rail workers (and all public sector workers in general) is failing to keep up with the rate of inflation which has reached very high levels recently. Inflation is currently running at ~9% and growing, but rail firms were offering a pay rise of 3% (1). This would mean a real-term pay cut with the RMT calculating that a worker who earns £35,000 has lost spending power equivalent to £3,150 (7).

So why not just raise workers' pay to the rate of inflation? Wouldn’t that be fair?

There are a couple of reasons that isn’t happening.

Firstly, the rail network has stated that further increases in pay can only come from savings and increased productivity and are not willing to offer pay rises of that amount. It is important to note here that the rail industry receives large subsidies from the government to help run the services.

The government has been clear that, although the employer can negotiate freely with workers, it does expect certain things to be achieved to facilitate any pay rises (8). It is also important to realise the RMT is widely reported as asking for a pay rise of ~7% which is still below the rate of inflation.

Secondly, the government has repeatedly said that raising public sector workers' pay to the rate of inflation would result in a “wage-price spiral” (9). This is an economic theory that raising wages increases prices which therefore creates a need for increased wages — and thus a cycle begins which results in inflation that is difficult to control is damaging to the economy (10).

The government argues that in the long-term it will be more beneficial to cap pay rises now.

Not everyone agrees with the above assessment.

Stagnating wages & rising profits

Some argue that there has been wage stagnation since the financial crisis of 2008 and therefore it is right for workers to ask for a rise. Economist and writer Grace Blakely argues that money should be taken from the profits of companies to help better maintain workers’ pay and to avoid a wage-price sprial.

“…if you account for the fact that when you’re increasing wages, you then take some money off the top in terms of profit.

“You keep the amount of money, demand on the economy the same, but you’re taking money away from executives and shareholders rather than working people who actually can’t afford to survive.” (11)

And it is true that many companies are making large profits.

Last week, First Group, the UK’s largest train operator stated that profits were “ahead of expectations” and the company paid £500 million to its shareholders in December 2021. In 2020, the CEOs of the six biggest train companies took home a combined salary of over £5 million (12). These companies then state that pay rises for workers need to be limited.

As mentioned above, the rail industry receives large amounts of taxpayer money from the government to fund its running — there is anger from many people that money finds its way to increasing profits and big salaries for bosses, but pay in real terms falls for the workers.

And is inflation being driven by increased workers wages?

This article argues that one factor driving up the cost of living and inflation is that big companies, such as those in the energy industry, have increased prices more than supply issues necessitate — keeping money for profit rather than passing on savings to customers. It also argues that there are other factors to blame for inflation such as the effect of the Ukraine war and speculative investments that are driving up prices, not increasing wages.

“In this context, raising interest rates and pursuing fiscal austerity [e.g. limiting pay rises] will… achieve little or nothing in terms of lowering price rises that are driven by primarily supply-side factors”

It goes further, quoting a United Nations report which says that investment is needed to help wean countries off depending on foreign imports, particularly in areas like oil by discouraging

“investments that could ease some of the logistical bottlenecks that emerged during the pandemic crisis” (13)

This isn’t a simple topic and there are multiple conflicting views. The government remains firm that the best course of action is to limit public sector pay. However, with companies making millions in profits and CEOs earning hundreds of thousands of pounds, workers do feel anger towards the system.

As Mick Lynch, the general secretary of the RMT states:

“RMT members [who are currently striking] are leading the way for all workers in this country who are sick and tired of having their pay and conditions slashed by a mixture of big business profits and government policy.”

Does the UK public support the strikes?

There is mixed data on whether the public support the strikes, although there is clear evidence that people don’t think the government did enough to prevent them.

This poll shows that a majority of those sampled believed the strikes are ‘justified’. The poll below shows that just 19% of the public believe the government did ‘more than enough’ or ‘about enough’ to prevent the strikes.

However, a poll from YouGov, gives a different picture, with the majority of those polled opposing the rail strike.

These two results may not be in contradiction due to the different wording of the questions. It is possible for people to think that the strikes are justified whilst also opposing them from happening — i.e. because they will cause disruption.

More to come?

In short, yes.

• Criminal barristers have voted to strike due to concerns about legal aid funding and pay.
• The largest teaching union, NEU, has said they will ballot members in England on strike action if pay rises are not adequate.
• Over 115,000 postal workers will be balloted on whether to strike 28th June over pay increases

These are just 3 examples of sectors which could strike soon. There are many others including warnings from NHS unions that they could consider industrial action if pay rises are not adequate.

With inflation soaring and a cost-of-living crisis impacting workers across the UK, the RMT strikes seem more likely to be the beginning of industrial unrest rather than a one-off.

TL;DR The RMT has organised strikes for over 40,000 rail workers in protest about pay rises and changes to working terms and conditions. The government says public pay can’t be increased too much as it risks further inflation, but there is public anger about huge profits and salaries for CEOs. With a cost-of-living crisis affecting workers across the UK, it seems likely this strike action is just the start.

References

1. UK Train Strike — Associated Press
2. Tweet & Graphic — RMT
3. Strike FAQs — RMT
4. Statement — RMT
5. Trade Unions — Gov.uk
6. Industrial Action — Gov.uk
7. Loss of Spending Power Calculations — RMT
8. Network Rail Bosses & Pay Rises — Guardian
9. Government Warns Against Raising Public Sector Pay — the i
10. Wage-Price Spiral — Investopaedia
11. Wage Stagnation & Limiting Profits — Huffpost
12. Profits for Rail Companies & Large Pay for CEOs — OpenDemocracy
13. How Elites Exploit Inflation — UnHerd