HOW STRIKE ACTION CAN IMPACT BUSINESS
By Scott McLeod
We’ve seen a significant increase in the level of strike activity over the past year across several industries. This action can only be taken by members of a union after a unanimous ballad has been taken and strike action without being part of a registered union does not free you from your employment being terminated.
Strikes can have a knock on effect for various businesses as they can prevent staff from being able to make into work whether it’s because of issues regarding travel or childcare, strike action causes a strong ripple effect.
As we will explore it’s not just the people who go on strike that are impacted by it as strikes can cause a ripple effect that can be felt by the businesses themselves, the general public and the economy.
Pay disputes are the most common reason for given by workers who have gone on strike with YouGov data showing pay disputes accounting for around 75% of all working days lost because of workplace disputes between 1999 and 2018.
Recent labour disputes have been impacted by the UK’s cost of living crisis which saw the overall value of regular wages drop by 2.5%.
Much of the recent strike action took place between June 2022 and December 2022 with some rail strikes carrying over into January. In that time it’s estimated that 2.472 million working days were lost, the highest since 1989. In that time with 79% coming from transport, storage, information and communication industries.
The train strikes forced the public to check ahead of time to see if the cancelled services would affect their travel plans whether this was their commute to and from work or the ability to take a day trip with the family during the summer.
One out of every 5 people was said to have had their travel plans were disrupted by the strikes but only one in ten said it caused them to be unable to work.
The education sector saw the second highest number of days lost between June and December. Strikes in this sector included primary & secondary education in Scotland, sixth form & college in England and universities across the UK.
When schools go on strike it puts a strain of working families who struggle to arrange childcare. Of the parents polled by YouGov, 31% said they would need to work fewer hours while 28% saying they wouldn’t be able to work while the schools were on strike.
If they’re unable to work then how much money they’re able to contribute to the household will be impacted, a prospect that can be especially daunting for lower income households as the UK deals with the cost of living crisis.
Businesses can be negatively impacted by strikes even if their workers aren’t the one who have gone on strike. Workers not being able to come in because they rely on public transport or can’t get childcare puts further pressure on other employees to make up the work to allow the business to reach any major deadlines.
Although monthly real gross domestic product (GDP) estimates for the last three months of 2022 was relatively flat at the overall level, industries that have experienced strikes have shown evidence of shrinking output in the last months of 2022. GDP is estimated to have fallen by 0.5% in December 2022.
The rail transport and postal and courier activities industries saw decreases in output over the last quarter with the largest decreases in December 2022, a month when both rail and postal workers held numerous days of strikes. The rail transport industry fell by 7.0% in December 2022. Postal and courier activities fell by 10.5% in December.
Rail strikes were scheduled for the 13th, 14th, 16th & 17th December 2022 as well as 3rd to the 7th January 2023. These did not appear to have had a large negative impact on total consumer spending, either in terms of total spent or when they spent.
Although consumers could not travel on many parts of the rail network on strike days, total spend on travel only decreased slightly on these dates. There is evidence that indicates any decrease in spending on rail travel was met with increased spending on buses and taxis.
This could indicate displacement behaviour where people changed their travel mode from trains to buses or taxis to lessen the disruption caused by strikes. Getting a taxi into town for those that usually depend on public transport is not always an option which would potentially impact high street spending during usually profitable times like Christmas.
This coincided with the postal strikes which for those who can’t go into town to do their Christmas shopping who go for the alternative of shopping online. With fewer postal workers this would cause shoppers to worry that their items would not arrive on time.
February saw teachers, university staff, train drivers and civil servants across England striking in what has been described as the biggest industrial action seen the UK has seen in a decade. This had a major impact as the UK economy saw no growth in February.
Darren Morgan, Director of Economic Statistics at the Office of National Statistics said: “The UK construction sector had grown strongly in February after a poor January, with more repair work taking place. There was also a boost from retailing, with many shops having “a buoyant month”.
But he added: “These were offset by the effects of civil service and teachers’ strike action, which impacted the public sector, and unseasonably mild weather led to falls in the use of electricity and gas.”
On February 6th ambulance crews, call handlers and nurses across England joined forces in a coordinated walkout. This was the biggest NHS industrial action ever.
After further national and regional strikes took place in February and March many of the NHS unions paused further action after talks with the government as most of the unions said they would put a new offer to their members.
Junior doctors, who are with the British Medical Association (BMA) were the only ones not to call off further strikes as they staged further walkouts from 13-15 March. Talks between the BMA and Health Secretary Steve Barclay at the start of March did not improve matters.
The union said the secretary of state “refused to come forth with any improved offer”. The government said on the 16th March it had offered junior doctors the same terms as other NHS unions, who are putting the offer to their members, but their request for a “pay rise of 35% is not affordable”.
On the 23rd of March it was confirmed that junior doctors would walk out again for four days in April, from 06.59am on Tuesday April 11th to 06.59am on Saturday April 15th.
NHS leaders have warned that the 96-hour walkout could lead to up to a quarter of million appointments and operations being postponed. So these strikes are impact the general public on a personal level rather than a financial level as their ability to see their doctor is being hindered. Hundreds of operations being delay could mean life or death for some of the older or most vaulnerable patients in these hospitals.
Several industries are planning further strike action including hundreds of construction workers across Scotland. Many of these strikes are the result of pay disputes but the government insists it can’t provide workers with inflation matching pay rises.
However if the government wants to avoid any further damage to the economy it has to find a solution as these strikes continue to impact everyone around them.
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