The right to strike

[Panikos]

I'm not sure that there should be any rules about strikes. I think it messes with a natural balance.

Anyone can put down their shovel and say "I'm not going to dig that hole unless I'm treated/paid better". If enough workers join in then the the company must decide how badly it wants the hole dug.

It's the duty of a CEO to make the most money possible for the shareholders without any consideration for the workers (or customers/clients for that matter). They are not charities and we should not expect anything from them. They'd prefer not to pay workers at all, but conscript them.

Sometimes a government will step in and enforce basic conditions and pay, but mostly what keeps the company in check is the possibility of a strike if they push too hard.

At one time they could fire the strikers and replace them, but that only works if the worker's complaint was trivial. If it was serious then they won't be able to get enough people to do it. Not to mention losses while recruiting/training.

It's one reason for immigration to be popular in some quarters because for a time people from a poorer country will endure bad pay and conditions that others will not. Eventually though they will look around and say "why am I putting up with this shit" and join the union.

In the end the company (unless it's run by idiots) will concede the minimum it must to avoid the industrial action. The strikers likewise will settle for some of what they were asking for and things can move on.

It's not a perfect system, but we've not come up with anything better.

Every now and then someone will say that essential workers should not strike at all but rely on the good nature of their employers.** They didn't see them as essential when they asked for better treatment, but the prospect of their rubbish bins not being emptied or not getting their operation suddenly makes them important. If the schools close and they have to look after their own children then now they matter.

We can manage much longer without the services of the House of Lords, Advertising executives, Speech writers and so on than we can without Bin Men, Teachers and Nurses so their salary and conditions should reflect this.


** "Never appeal to a man's better nature. He may not have one. Invoking his self-interest gives you more leverage.” Robert A. Heinlein

[Wildrover]

I think half the problem is defining how much a job, especially a public sector job, is worth in comparison to the median salary. You also need to take into account benefits especially pension; for example my ex-wife's school is private and has just moved their pension from the state system to a private one and is moving the 24% of salary they used to pay into the state system into a private pension. Everyone is aware that the public sector enjoys better pensions but not the eyewatering cost to the taxpayer - for police pensions the taxpayer contributes 32% of employee salary to their pension. In contrast the average employer contribution in the private sector is just 4.5%. For NHS staff the employer contribution is about 21%.

Why does this matter? Looking at average nurses' pay, in 2020 the OECD trumpeted that UK nurses were among the most poorly paid in Europe at 1.03x median salary compared to France, Germany and Italy at 1.1x median salary and Spain and Holland at 1.2x. Of course they only considered salary and not benefits and in the other countries mentioned nurses get the same benefits as everyone else. When you add in pension benefits, UK nurses have a total employee cost of 1.2x the median UK employee and are among the highest paid nurses in Europe relative to the nation's other employees. However I've seen other surveys that have completely different data so I've no real confidence in the data.

I do however feel that the nurses have been let down in a couple of areas - if you look back to the 1970s nurses were paid just under the median wage at a time when there wasn't the pension gulf between public and private sector - if you factor it all in their salaries relative to other workers is slightly higher than 50 years ago but not much. That fails to take iinto account the fact that nursing is now a very different job with almost all nurses degree qualified today and undertaking many jobs that used to be done by doctors. The expertise and skills required is much higher and I don't think that has been reflected in either job descriptions or pay - essentially they are freeing up doctors' time and that should have a value. However looking at the figures that seems to be a Europe problem rather than a UK problem.

Should they be allowed to strike? That is a tough one but on balance as long as emergency care is maintained as per their contracts then I don't see why not if they feel they're being treated unfairly. The average nurse's salary is set to rise from £35,600 to £37,000 but the union is insisting on £40,000. I think that's probably unrealistic as it pushes their loaded cost with benefits over £50K but given their recruitment crisis they may need to pay this simply to attact staff.

[eccles]

I say bring back the matron!

[OurCreature]

WR wrote (in passing)

if you look back to the 1970s nurses were paid just under the median wage at a time when there wasn't the pension gulf between public and private sector

That is a very interesting observation, WR; my recollection about local government pensions is that in those days private sector accountants laughed at us because they thought our pensions were so inferior to theirs. I hope that in another post you might explore the reasons for the gulf between public and private sector pensions today; I don't think it is because public sector pensions in themselves have improved significantly! I know there were a few additions to the benefits of the LGPS between 1972 when I started and 2011 when I retired; however, various changes in recent years have been made to the LGPS which means that in the medium and long term it should be somewhat cheaper to finance. The main change is the movement from your final salary as the basis of your pension to your career average earnings.

FWIW I always thought of the employer's contribution as part of my salary, and when I retired my gross (including that contribution) was £40k; without the contribution it was £33.6k and the employer's contribution was 19% of the £33.6k. My contribution was 6.8% of the gross without the employer's contribution ie £2.3k.

What it does show is that decent pensions are very expensive to provide for, and I am very aware that I am very lucky compared with the vast majority of people who haven't yet retired.

[Wildrover]

I agree OC - it's not that public sector pensions are a lot better now and several, especially the police, have a worse pension than in the 70s (although frankly, their pension was ridiculously generous - my uncle paid 6% of his salary per year and retired from the police n 1973 at age 49 on an index linked pension 2/3 of his final salary with half that pension being paid to his widow when he died 30 years later. I once calculated the taxpayer contributed 132% of his salary annually to pay for that pension!! He then had a nice admin job at the DoE for 10 years - his final pensions added up to over 90% of his final police salary. However it's the fact that private sector employers have been allowed too slash pension provision unlike in Europe. I don't remember the private sector having better pensions in the 80s - when everyone had final salary schemes the benefits were very similar as I remember.

I think the problem is that employees especially the young place a low value on pensions - they'd rather have the extra money in their salaries. I certainly didn't give it a thought until I was around 40 and MYF thought her currrent pension pot of around £40K is worthless but given that her pension pot will double every 10 years or so her £40K will be worth around 8x that by the time she retires and she still has about 30 years of contributions to make so she's in good shape - but completely ignorant of that fact.

[OurCreature]

The 6% your uncle paid was the norm for the LGPS in those days - I paid 6% for most of my time in work, and 6.8% for my final 4 or 5 years when they changed the scheme. The police pension (a pay-as-you-go scheme like most of the public sector) was exceptionally generous. In the LGPS (a properly funded scheme where the pension money paid out to pensioners is earned from investments) you earned 1/80 of your final salary for every year you were a member of the scheme and you got 3 years of your pension as a lump sum as well. In my last few years the gratuity only happened if you commuted some of your 'new' pension. I got something like 35/80 of my final salary under the old scheme plus 3 years pension, but I worked out that if I didn't commute any of my 'new' pension I would retire on half pay and I got that calculation right. I didn't commute any of the pension earned under the new scheme.

I would have thought that your uncle would have got a gratuity as well, WR.

The widow's pension relating to the deceased spouse's pension in the LGPS was 1/3 when Dad died in 1976, 8 years before he would have reached state pension age. Although he had less than 10 years service, Mum got a small lump sum - which seemed like riches beyond her wildest dreams at the time - plus 1/3 of his pension; I think they enhanced it to what it would have been at normal LGPS retirement age. She got state widow's pension as well. Although these pensions weren't huge they were useful monthly supplements towards her total income, and they increased with inflation every year which was an absolute godsend at the time.

As I was a qualified local government accountant and had been taught about the LGPS I knew about this and told her and she was amazed. When the money started to come in she confided to me that she hadn't expected to get anything. Even now when I think about it I become a little weepy................

[Panikos]

Wildrover, good point about the pension provision which clearly is a big deal unless you work until you drop. (Now I'm wondering if longer life spans are making them worth more or the later retirement age less.)

In the case of nurses I think you put your finger on it too with the job changing. They do more now and are often short staffed too. Wards used to have a matron like Eccles' one above and a couple of ranks of nurses below them. Now a nurse can find herself alone on a ward she's never seen before and must choose which parts of the job can be safely skipped. It doesn't make for a happy work force.

The lack of staff isn't entirely about the salary though that would help. It's a career seen as stressful and unappreciated. The NHS seems to rely on taking agency stuff as needed instead of having a proper team. They really need to get their act together.

[Wildrover]

I have a friend who is an actuary who a year ago put me straight on one very important point concerning pension costs. I'd always considered that if you retire at 60 then your pension needs to be paid until you died which on average is around 79 for a man and 82 for a woman. He pointed out that those life expectancy figures included people dying before age 60 and that for people who reached 60 around the year 2000 average life expectancy was 84 for a man and 87 for a woman and that has nudged up a year to 85 and 88 respectively for those reaching 60 now. All of which means that whereas I thought retirement at 60 meant the pension being paid for 20-21 years on average it's actually 25-26 years, 25% longer. No wonder it's an ever increasing problem.

OC- my uncle did get a lump sum but it was only 1.5 years salary. However as I said his pension was amazingly generous by today's standards.

[Panikos]

That is interesting because I kind of assumed the arguments for putting up retirement age were dishonest, but maybe not so much.

I've made a note to live to 120 just to annoy the actuaries

[OurCreature]

The other thing that many people don't know about life expectancy in the UK is that it isn't uniform all over the UK. The latest figures from the ONS cover 2018-20. The region with the highest life expectancy at birth was the SE (M 80.6 yrs, same as 2015-17; F 84.1 up 0.1 from 2015-17). Bottom of the class came Scotland (M 76.8 yrs, down 0.2 years on 2015-17, F 81.0 down 0.1 on 2015-17)

In fact there were only 2 regions (out of 9) in England where male life expectancy at birth didn't fall between the 2 time periods; the SE and SW. Female life expectancy held up better, increasing slightly in 3 English regions, staying the same in 1 region and falling in 5 regions.

https://www.ons.gov.uk/peoplepopulation ... 2018to2020

Different occupational groups have different life expectancies as well.

[Furby]

The strikes are still going on. Covid did teach us what is essential and what isn't. Most of the nhs isn't essential because it was allowed to close down in covid. Food shops and other places having to remain open to new customers in covid are essential and their staff survive on much less than an NHS starting salary because they aren't monopolies. It's the monopoly that makes the NHS seem more essential and have such strike power. Government needs to work on plans to provide alternative emergency care even without the strikes that's needed.

I do think everyone should get inflation rises on a basic amount say about the state pension 10k. Regardless of if it can be afforded or not that's seen as the survival amount to live so if a business can't afford that they don't really have a viable business anyway. Rises on the rest of the salrty should be based on profits in the company or how much taxes are put up for governement employees. And visible say on national insurance so people who support 35% for NHS can be happy to pay 35% more nat ins ratger than the magic money tree paying.

The NHS are saying they didn't get inflation rises for many years but so didn't most people. Only people on the legal minimum wages and a very small number of elite jobs have seen regular above inflation rises. Their other demands are workloads which is very important but will paying existing staff 35% more make more staff magically appear. Jobs where only ready trained qualified staff are accepted always struggle with recruitment because no wage increase can make more staff available.

[eccles]

I've made a note to live to 120 just to annoy the actuaries

Me too. So far so good...