UK’s rail workers strike over below-inflation pay

More strikes incoming: 

The biggest rail union started a national strike over below-inflation salaries, and the rising cost of leading train unions began a nationwide strike in protests of below-inflation pay resulting in ongoing rising living and energy costs. Researchers revealed that the strikes might cost the UK economy £1.2 billion over Christmas. 

The largest rail union, the RMT, has called a two-day nationwide strike by thousands of rail workers in protest of the government’s lack of intent to take action. These announced strikes of four 48-hour walkouts between December 13 and January 7 are thus causing many commuters to rethink their holiday plans—truly a nightmare for Christmas.


People are finding it difficult to pay the bills due to the country’s double-digit inflation rate, the rising cost of living and skyrocketing energy prices brought on by the conflict in Ukraine. As a result, an unprecedented number of strikes have been called due to the economic crisis. 



Despite the real inconvenience caused, many communities are expressing deep sympathy for the strikers, calling for a change immediately to help everyone with the cost-of-living crisis.


Not just the rail industry was on strike over wages. A new two-day strike involving rail workers, bus drivers, highway workers, and baggage handlers at airports will begin on Friday. In addition, over Christmas, Border Force officers who manage incoming immigration at busy airports like Heathrow and Gatwick will go on strike.


Transport minister Mark Harper wrote in right-wing broadsheet The Daily Telegraph Monday that the government “has worked hard to ensure a fair two-year pay deal on the table”.


He further said the proposed deal was more generous than in the private sector and would unlock “essential reforms”.


However some economists may argue that due to an increase in wages, it may consequently lead to an increase possibility of Real wage Unemployment. The diagram below demonstrates this economical theory. 


Another issue many people are concerned with would be who would be paying for the extra wages. The government would either need to borrow extra money to fund the increase in wages or they would need to raise taxation. 

What do you think the government should do in regards to this situation? 


Keywords:


Inflation - Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices through the Consumer Price Index (CPI) or the Retail Price Index (RPI). Typically, prices rise over time, but prices can also fall, this situation called deflation. 

Real wage Unemployment  -  Real wage unemployment occurs when wages are set above the equilibrium level causing the supply of labour to be greater than demand.  

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