Strikes: winners and losers

 

Strikes: winners and losers

The coming months will see more strikes in Britain and this will include not only transport but also state administration, National Health Service, Education and other segments of the British economy. The idea is that workers want better deals to lose less of the value of their incomes being eroded by the inflationary process created by sanctions against the Russian Federation.

One of the outcomes has been the downgrading of the education system with most education centres having gone done in terms of education standards and there is more to come when teachers go on strike. To the damage caused by the Covid Pandemic will be added the damage caused by absenteism from classrooms caused by strikes. This is going to be also a difficult time for working families and many will face the dilemma of going to work, leaving their children alone outside schools or staying home to look after their families. This will also pose serious social risks. Having children without education and without adult supervision roaming around with little to do is certainly a recipe for disaster. 

We cannot entirely blame workers concerned about their incomes, but the very shortsighted approach of administrations that completely underestimated the impact of geopolitical decisions. Everybody with a grain of common sense could foresee that economic warfare would have repercussions not only for the British economy, but for the world's economy as a whole.  Even France with its nuclear power advantage is in dire straits as the vast majority of French nuclear reactors are not operational and this led to a direct confrontation between the French authorities and energy providers when French authorities tried to force energy providers to provide electricity at below operational margins. Similar situations occur across continental Europe and Winter has not even arrived. As temperatures fall, the true extent of the energy crisis will be felt and words like rationing and blackouts. Those who remember the early 1970's in Britain will know fairly well what it means. At one point, Britain was working three days a week. In Britain, temporary aid has been provided to help both ordinary consumers and companies deal with the brunt of energy prices but, unless such schemes are intended to be a permanent feature, sooner than later the real costs of energy will be felt across the board.

So what do strikes achieve? To begin with, those who are going to bear the brunt of strikes are going to be the most vulnerable and especially those who are part of the Zero Hour Contract economy and the black economy. With reduced economic activity, they are going to struggle to survive. Recession could soon be followed by Depression and we also what Depression means. In a recession, economic activity is severely affected but continues. In a Depression, the ultimate consequence is massive levels of unemployment. The hospitality industries - for example, were critically affected by lockdown measures during the pandemic. After that, they have had to deal with higher energy prices and many businesses came to an abrupt end. If now they to have to deal with higher energy prices and margins that do not cover their operational costs, for a vast number of businesses this will be the end game.

Any temporary gains will be followed by gigantic losses. In an economy with skyrocketting levels of borrowing, any salary increases will be swallowed by inflation.