The Disgusting Economics of Striking
Is it even worth it?
Many people don’t know this, but workers on strike don’t actually get paid… Even if they’re in relatively ‘safe’ jobs like Teachers & Nurses.
That means the benefits of striking are inversely correlated to the number of days that a strike goes on.
In the image below, the Y axis is their potential profit. The X axis is the number of days on strike.
The more they strike, the less they’ll profit.
So it’s in the interest of local authorities and governments to NOT capitulate and give pay increases right away. They’re saving money for each day of strikes.
If they let nurses strike for 4 days and then give them a 2% pay increase, they actually won’t be out of pocket.
Nurses will feel like they’ve won, but in actuality, they’re getting the money back that they didn’t receive while on strike.
The Striking Paradox
Let’s say that a teacher is getting paid £30,000 per year. Depending on what grade they are.
They need to work 190 teaching days per year. Bringing their pre-tax rate to £157.89 per day.
That means each day they strike costs them 0.5% of their potential pay rise to execute.
If they strike for 4 days they lose £631.57 in real pay.
That’s over 2% of whatever increase they’re asking for.
So if the government gives them a 5% pay bump, in economic terms, the benefit is less than 3% of an increase to the teacher.
If the government offers 2% or less, they’re actually saving money.
The Correct Way to Strike
For Governments, there’s an incentive to let strikes go on and negotiate a middle-ground settlement. They’ll be paying out far less than stated and get the good PR from looking like they’ve crumbled to pressure.
For those on strike, the requested pay increases need to be positively correlated to the number of days on strike. So the more strikes needed to achieve your goal, the more of an increase you should be asking for.
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