Highest number of days lost to strikes in ten years – but set to continue rising as public sector real wages fall

Recent industrial action has led to the highest number of days lost to strikes in October 2022 since November 2011, and this is set to rise in the coming months as labour disputes over falling real wages continue, the Resolution Foundation said today (Tuesday) in response to the ONS labour market statistics.

The largest strike action in a decade has led to 417,000 days of work being lost in October 2022. But this remains low compared to the previous peak, with the period of significant industrial action in November 2011 leading to 997,000 days being lost.

With public sector real wages falling by 5.8 per cent this month – compared to a 2.0 per cent real-terms fall for private sector wages – strike action looks set to continue over the coming months, as high inflation cuts deep into workers’ pay packets.

But while the uptick in strike action is a recent phenomenon, it comes off the back of persistent gaps between private and public sector pay. In cash terms, public sector pay has grown by the equivalent of 3.8 per cent a year since the eve of the pandemic, compared to 5.2 per cent in the private sector.

The pressure for strikes will remain as the labour market remains tight, with vacancies remaining near record highs despite five quarters of continuous falls. Other labour market quantities remained broadly flat on the month, with unemployment and employment rates remaining largely unchanged, while inactivity due to long-term sickness fell slightly.

There may be some small signs that the labour market is beginning to cool. Redundancies have risen slightly to 89,000, albeit from a very low base – they are now approaching pre-pandemic normal levels. Similarly, short-term unemployment rose by 92,000 on the quarter, from a low starting point. In broad terms, labour demand has remained flat over the last couple of months, and participation is starting to catch up, which could ease recruitment problems.

The Foundation notes that rising vacancies in the public sector will exacerbate the pressure on the Government to increase pay as it struggles to recruit workers. But early signs of cooling in the private sector could bring good news for public sector employers in the months ahead as they face less competition for workers.

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“The largest strike action in a decade has led to 417,000 days of work being lost in October this year, off the back of persistently low real wage growth for public sector workers coupled with high inflation.

“Pressure for industrial action will remain high over coming months, with vacancies in the public sector near record levels. But slight rises in redundancies and short-term unemployment suggest that the tight labour market experienced since the onset of the pandemic may be beginning to unwind, which could be good news for public sector employers as competition for workers falls.”