With the biggest industrial controversy in the rail network of the last three decades starting this week, the battle lines are being drawn. Along with the succession of shocks caused by the Covid pandemic and Russia’s war in Ukraine, the government of Boris Johnson will add another culprit to our tangible sense of national decline: the workers. The tone could hardly have been different from last October, when the prime minister told a Conservative party conference that Britain was on track to become a high-wage economy under his leadership. Business leaders have been warned to stop whining about Brexit and staff shortages and have been asked to keep raising wages. The government now warns that the conditions are set for a dangerous “wage-price spiral” that would force the Bank of England to raise interest rates further to stifle inflation from the system – raising the spectrum of the 1970s, when strongly unions increased wages and with it inflation. In this remarkable shift, Treasury Secretary-General Simon Clarke warned public sector workers in particular that they should not have “unrealistic expectations” about their pay because increases would “prolong and intensify” the crisis. of the cost of living. It was an indicative intervention, expressing an opinion held by senior members of the cabinet. Although the public sector accounts for only 15% of the workforce, the Treasury Department is of the view that withholding wages in the sector can send a strong message to the economy as a whole – helping to keep wage expectations low. In the coming weeks, the government will unveil plans for annual remuneration for NHS staff, prison staff, teachers and civil servants. With all this talk of self-control, the signs are that he is waiting for a miserable settlement. Hard luck to the heroes who were applauded in the coronavirus pandemic, now the bad guys of the piece. as emergency factors for our cost of living. Despite wage warnings fueling the fire of inflation, there are few signs of a wage-price spiral None of this fits the promise of a high-wage economy. Neither with building backwards better, or lifting. “We will not go back to the same old broken model,” Johnson told a Tory party conference last October. Did the Prime Minister change his mind? If the times are not right for him to leave the low-wage economy that his party has been chairing for 12 years, as workers suffer the worst blow to the standard of living recorded, when will it happen? Despite wage warnings fueling the fire of inflation, there is little evidence that a wage-price spiral is prevalent. The Bank of England estimates that the average wage increase across the economy, excluding bonuses, is between 4% and 6%. Although it is much higher than Covid, this does not mean that the lights go out. With record job vacancies and unemployment the lowest in five decades – as well as the highest inflation in 40 years, which is already at 9% and heading for 11%, according to the Bank – it is perhaps more strange that wages have not risen significantly already higher. There are some areas where wage increases are stronger. Official figures show that the average pay rise, including bonuses, has skyrocketed to 8% in the private sector due to high payments for city bankers and IT professionals. However, wage increases in the public sector are withering to just 1.5%. Last October, Boris Johnson told a Tory party conference that Britain was on track to become a high-wage economy under his leadership. Photo: Tayfun Salcı / Zuma Press Wire / Rex / Shutterstock All of this comes after the worst decade of wage increases in real terms since the Napoleonic Wars. In terms of austerity, the government now seems willing to recreate, public sector workers had a particularly crude deal. The unions are preparing for a 3% NHS pay rise in England this year. Although it matched the wage arrangement agreed in 2021, it would mean a significant reduction in wages in real terms, when adjusted for inflation, and would fall far short of the increase in profits for the economy as a whole. If ministers reach a 3% settlement for NHS staff, the TUC estimates that nurses and paramedics will be reduced by £ 2,000 in the inflation-adjusted value of their pay. For obstetricians it would represent a real cut of £ 1,200 and for hospital porters a reduction of. 1,000. Taking into account the weak salary increase and the rising cost of living since 2010 after years of austerity, nurses are in a worse position by 200 5,200 per year. Unsurprisingly, Britain’s public sector is fraying. As wages rise at a much faster rate in the private sector, the only spark Johnson should be concerned about is extending the queue for health care workers who leave for better-paying jobs elsewhere. Labor shortages are the biggest challenge facing the tragic UK health and social care system. The foundation’s non-partisan think tank estimates that the NHS’s English trusts face a staff gap of just 110,000. With Covid’s pending response and an aging population, it is only going to increase. With new hospital waiting records unveiled last week, King’s charity warned: “Until the government understands the nettle in these staffing challenges, the NHS will not have the capacity to provide care. that patients need and deserve “. Subscribe to the daily Business Today email or follow the Guardian Business on Twitter at @BusinessDesk So far, however, the government seems more willing to play politics than to propose workable solutions. After Partygate, the prime minister is afraid to give in to the unions and set a precedent, preferring instead to blame the Labor strikes on his own shortcomings. However, an action plan is needed soon. To avoid a bleak future for jobs, the government must draw up a roadmap to raise wages in a sustainable way, boosting the productivity of the British economy. Such conditions can allow wages to rise without stimulating inflation. But where is the plan? If the prime minister wants to build a high-wage economy, a good start would be to abandon the tactics of divide and rule and return to the table with unions and employers. Such coordination is common in European countries, but seems damned to a government that focuses more on ideological conflicts. With no long-term plan and permanently stuck in campaign mode, Johnson chose to quarrel with employees. It will only serve to ignite the flames of a summer of resentment.
