Strike Action
As widespread strikes continue across the UK and around the world this summer, this week’s podcast delves into strike action. We discuss what makes a successful strike, whether they are an effective bargaining tool, and if they actually work.
We recount the history of strikes in the UK and US, account for the steep decline in striking since the 1970s, and provide a few speculative reasons for why you don’t see as many strikes these days. We diagnose the problems facing the world economy and disclose some of our worst-ever jobs.
A few things we mentioned in this podcast:
- Working days lost due to strike action in the public sector - monthly (UK)
- Bargaining Power, Strike Durations, and Wage Outcomes: An Analysis of Strikes
in the 1880s
For more information on Aleph Insights visit our website https://alephinsights.com or to get in touch about our podcast email podcast@alephinsights.com
Transcript
Hello and welcome to the Cognitive Engineering Podcast produced by me, Fraser McGruer, for Aleph Insights. In this series of podcasts, we take a look at interesting topics and discuss what we think they tell us about analysis and decision making. I'm here with Chris Wragg and Nick Hare of Aleph Insights, and this week we're discussing going on strike. Comrade Chris, going on strike.
Speaker B:Well brother, our listeners may not realise, but we record our podcasts in blocks of five normally, we do them once a month. We're pulling back the curtain there.
Speaker C:Actually, I'm not sure about saying that, but anyway, keep going.
Speaker B:Anyway, this month, we can only do four, so productivity cut 20% by rail strikes. So for those of you not in the UK, the UK is having sort of widespread few days, basically a week of train strikes, some days no services at all, other days like today, a limited service being provided. And so this meant we couldn't get to our recording studio in time and so on.
Speaker A:Apart from me, by the way, who had the furthest to come.
Speaker B:But yeah, what mechanism? I drove. Right, okay, there you go. But then got a tube.
Speaker C:That'll be why then. Yeah, but if I drove, why couldn't everyone else?
Speaker B:You should have gone on strike as a driver in sympathy with the union, you scab. Yeah, one out, all out. Anyway, so it got me thinking about strikes. We haven't had sort of strikes that have had a significant impact like this for quite some time. For many people, they're not really within their living memory. And so I started thinking about strikes and whether they're an effective bargaining tool. And what makes an effective strike? What makes an ineffective strike? Do they work? Which somebody pointed out the oxymoronic nature of that statement of whether strikes work earlier. But so yeah, that was it, really. And, you know, we've now all got our own sort of personal perspectives on this particular strike that I think will kind of give it a bit more colour.
Speaker A:Yes, and just to sort of go a little bit further. So do strikes work as in do they?
Speaker C:Well, we might want to, we'll probably want to talk about what work means in this context.
Speaker A:Yeah, do they mean you get what you want or not? Or yeah, I'm terrified. I just know on this one. I bet, Nick, when you were researching this, you're getting all excited and just went through games of stuff. Yeah, loads of game theory. I mean, it's going to be so much economics. Yeah, yeah, yeah.
Speaker C: that having been born in the: Speaker B:Yeah, it's I think it has been rising. I think the data I could find, but it but it's in the in the low hundreds of thousands of days as opposed to tens of millions.
Speaker C: strikes a year in the early: Speaker A:Well, it sounds to me, I think I'm going to answer this in a slightly roundabout fashion, which I know is not normal for me. It'd be interesting to see if there's been a growth, a correlative growth in income equality to those to that decline in strikes.
Speaker C:Well, there hasn't because there's been there's been a decrease in income equality over the last year. Median wages have stayed sort of more or less static in real term. And the sort of very highest earners now earn substantially more as a percentage of the median wage than. Yeah, I think income inequality has grown significantly over the last 20 years. That's what I'm trying to say.
Speaker A:Yeah. So there's more income inequality. Yes, exactly. And so and so and then that ties into my actual answer, which is, well, the capitalists won kind of thing. Oh, yeah. The capitalist overlords have won. And so therefore when they crushed the unions. And so now we have, you know, kind of the other end of the scale, this sort of gig economy and the power no longer lies with the worker. Well, yeah.
Speaker C:I mean, when you say they've crushed the unions, I mean, the unions aren't illegal. No. There's nothing stopping anyone being in the union.
Speaker B: ctually the unions won. So in: Speaker A:So I think you're definitely right about workers' rights, workers' conditions. But one thing I would wonder about, like, say, this growth in income inequality, which, as we said, over the last 20, 40 years has really accelerated, which to me suggests that, well, that, yeah, the capitalists have won.
Speaker C:If unions didn't work and were useless. Yeah. And if striking didn't work, why would Amazon be trying so hard to clamp down on it? You know, so I think I think there is something what you're saying, I think, and it's a more even more. Well, not even more cynical, but a more cynical approach might be to say, well, actually, the reason a lot of people don't think they want to join a union is because they've also been brainwashed by predatory capitalists into thinking that actually they have more market power than they do, you know, that actually a lot of people might sort of think, well, I don't I don't I can just go and get a job somewhere else. You know, if I get treated, but it's not like the old days when you got one factory in town and there's no other jobs. I mean, these days, you know, fine. I can go, you know, the labor market's very fluid. I can go get a job somewhere else if I'm what's the point of a union? You know, I don't want to be doing this job for the rest of my life.
Speaker B: know, one factor, as with the: Speaker A:So so far, we've talked a little bit about strike activity, how much there is. We talked about some of the underlying reasons for it. Are we ready yet to talk about how effective it is or not and whether it was strikes are good at achieving their aims?
Speaker C:Well, I just want to spend 20 or 30 minutes talking about the game theory. Brilliant.
Speaker A:I thought we were going to go on to wage inflation.
Speaker C:No, this is interesting because this does give us some concrete things to look at and to think about. The economics obviously gives you a framework to understand what's going on with a strike. Start with the Rubinstein bargaining model, which is an absolute. It's where I usually start. Yeah, it's an absolute landmark of game theory. It shows that sort of a standard model of bargaining. So striking is generally about bargaining. There's a pot of cash. At the moment, it's going into your pocket as the big capitalist business owner. And instead, it should be going into my pocket as a worker. And so you normally start from the assumption that and this is specifically about pay rather than other things, conditions or whether drivers should operate doors and those kinds of things. Although you might see that those things are actually in effect ultimately about pay. But I mean, anyway, this is assuming that there's a surplus value, which at the moment you're getting and I want it now. But the problem is, there's only one of you and there's hundreds of us, right? Which actually means you have the market power. Who am I again? You're the capitalist business owner. And you can choose not to hire us. Individually, I can't go on strike by myself because I can't really make much difference to you. You know, just like a market. If there's one buyer for labor and hundreds of sellers of labor, you know, the sellers are going to be selling for, you know, pretty much the minimum that they would accept. So they have to all work together. They've got to bargain together. Yeah. And otherwise, it doesn't work. You get a free rider problem. You know, you get tragedy of the commons because all that it takes is one person to say, well, I tell you what, I'll work for only a pound more. Forget about the rest of those strikers. And then, hey, presto, everyone goes for that. You know, the whole thing falls apart. But the Rubinstein bargaining model takes that and it shows, you know, that the whole point of a strike is that, well, we're losing money as things go along. Every day we're on strike. I'm not getting paid. You're not earning any profit. We're all worse off. And really, so in this model, they make offers and counter offers. But everyone has a sort of incentive to get back to work. But what the model shows is that it's whoever cares more about time does worse. So if I've got to put food on the table, if the strikers are all, you know, have no strike pay, no one's and their families are starving, they're going to concede more readily than vice versa. And similarly, if the company, if losing profits is very important to them, then, you know, they will concede. So what's the model? Well, the point of that. But the interesting thing is that it ends immediately in the model. The first offer is made with people knowing all that. So the fact that there is ever a strike shows that some assumption of that model is untrue. It's a great place to start. But if there's ever a strike, it shows that some assumption is untrue. And I think generally the thing that people think is untrue is the complete information. So it's a bit like a war. Like if we knew who was going to win a war, you'd never get into a war in the first place because you're better off just saying, OK, well, I know you're going to win. So I might as well concede. You're still better off than fighting the war and then having to concede. Right. And it's the same with a with a so. So there's an information problem. We both think that we're going to win.
Speaker A:That's why we have a lack of understanding of the other side.
Speaker C:Exactly. And so the thing about a strike is that it shows that we don't actually know how how much the other person cares about time effectively. There must be some lack of information for a strike to occur. And in a sense, you've got to sort of run the experiment to find out who yields first. It is like a war of attrition, but where you don't know how much attrition space is left for the opponent.
Speaker A:So that's anyway, that's probably the only way to find the information. Right. Is this what we're saying?
Speaker C:Yeah, because because no, you don't have an incentive to tell the truth. You have an incentive to lie in the same way. You have an incentive to lie about how strong you are as a country. You have an incentive to lie and say, well, I don't care if you go on strike. You stay on strike for a year for all I care. And the strikers, you know, similarly have an incentive to say, well, we'll walk out at the drop of a hat. And it does no skin off our nose. So the only way you can find out if that's true is by having the strike. Yeah. And and so I think so. Which is which is how you have the strike in the first place. But the reason for the strike is always. And this is really important for thinking about why the structure of society, why the structure of the economy might have changed striking behavior. But that there's always has to be some surplus, some part which we can fight over. Yeah. And so striking is so the term in economics is rent seeking. Yeah. You know, we're not trying to add more value. It's not an argument about adding more value. It's an argument about who gets the value that's already there.
Speaker A:I completely understand the game theory application there. I don't didn't understand what bit was different about the Rubenstein model. Or is it more or less the way you've described things is the analysis you provided there is.
Speaker C:The Rubenstein model is it says, well, if you have perfect information. Yeah. The strike never happens because you just yield straight away and you end up with a settlement that reflects your your power effectively.
Speaker A:OK, Chris.
Speaker B:Yeah, well, I think I think this shows why probably why strikes certainly in this country are structured in the way they are and why unionization is often structured in the way it is. I mean, most people's mental image of a of a union boss rights in the in the UK is of a sort of. Well, like so the real maritime sellers. Yeah, right. Exactly. The Rail Maritime and Transport Union, which is the RMT, which is, you know, coordinating the rail strike at the moment. Mick Lynch is their boss and he is that classic, you know, throwback union boss of a sort of, you know, a macho. Confrontational burly kind of person.
Speaker A:Is he the one that the Guardian is raving about that they love him? And they said this is why the media loves him.
Speaker B: this country. And even in the: Speaker A:Absolutely. And actually, one thing you said there, which reminded me of something is in Brazil, like in many countries, you've got different levels or jurisdictions of police. So you will have your I think your municipal police. You'll have your state police. You will have your you certainly got your military police who are really basically the guys you don't want to mess with. They're the federal police. I don't know if there are any federal in addition to them. But also then you've got people like the transport police as well. And way more divided up than somewhere like the UK where, OK, we've got different constabularies departments. Anyway, it's very much divided up. But when I lived there, the municipal police went on strike for about a week and then just went back to work again. And the reason why is because it's made no difference because they're just a bit useless. That's really sad. Yeah, because there wasn't there wasn't a sudden outbreak of anarchy and chaos. No, there was not. And the reason why is because of the policia federal, the federal police, no, the policia militar, the military police who just they're the ones who are really in charge. So you don't worry. Yeah, I mean, they've even got crappy uniforms and crappy cars. So as you say, there's got to be you've got to have something that, you know, that people are going to miss. Right. Where are we?
Speaker C:Yeah, that's an interesting. I know. But I mean, that is also another thing you're finding out, I guess, is how essential your industry is. One of the things that I mean, I think this perhaps gets on to some of the speculation about why strikes might have declined, but is is that there has to be a source of, you know, inflexibility and demand somewhere for a strike to work. I mean, if let's say that you have perfect competition for steel, that means that steel plant owners are all going to be selling steel at, you know, pretty much more or less what it costs to make. And there's no surplus really on the table. Right. Every pound you give to a worker is, you know, is a pound that you you're going to have to charge more for steel and you won't be able to sell it. So it kind of depends on there being this this world of sort of some kind of market power that you have as a firm, some kind of monopoly. And if you then find out you don't have it because your operation shut down and everyone switches to a different company, then obviously that's a terrible outcome for everyone. And yeah, I mean, there's I think there's the history is replete with examples of people who've the example I often rely on is the it's not quite industrial action, but it's pretty similar was the narrowboat men of Birmingham in the in the 18th century who, in order to protect to protect their narrowboat industry from competition from wide barges. They they compelled the the builders of the Grand Union Canal and other canals to to put these narrow locks in so that only they could get through. And of course, without without being able to use barges, what came along was trains and people started using trains. They could have been competitive, wide barges on canals, kind of actually pretty, you know, on a cost basis, pretty competitive with trains. But they were locked out of that capability. So, yeah, I think that's another interesting thing you find out when you shut your business down, you know, while consumers find out if there is there a better alternative.
Speaker A:Right. Where do we go? We need we're sort of, you know, near the end. What do we want to cover? What haven't we talked about yet?
Speaker C:Got a few speculative reasons why you don't see strikes anymore.
Speaker A:And by the way, as an aside, one of the things I love is every time I go to France, yeah, there is there is always a strike. I've never been in the olden days. Yeah, I've never been to France and without there being some kind of demonstration. And is it usually the baggage handlers, isn't it? I feel like there's always some.
Speaker B:I don't know. It's air traffic controllers.
Speaker A:Yeah, it's it's great. I mean, thank you, France. You know, it's fulfilling my cultural prejudices. Well, they still haven't had their French Thatcher, have they? No, no, they have not.
Speaker C:It's still got.
Speaker A:Which is ironic because it's a very strong central state. But anyway, Nick, what were you saying?
Speaker C:Well, this is only speculative because I couldn't really find anyone who's looked at this in detail. But some reasons why you why there is less union activity. Yes. Yes, yes. So I think the key story is obviously a decline in heavy industry and automation in heavy industry as well. You know, it's very hard to a robot doesn't care if you call it a scab. It's still going to keep working when you're competing against machines. Unions don't help. You can't get a robot to join the union. It just won't. It just won't do it. They're not interested. So but I think if you look at the sort of structure, the economy, you know, has moved substantially towards services. And we've still got a lot of manufacturing. Manufacturing hasn't really declined that much. But as a percentage of the economy, it's declined. And in services, generally, you know, labor is a much bigger cost. It's not the case that, you know, when you've got a big factory, for example, some of the costs are the machinery. Some are labor. And, you know, some of the return in inverted commas is for the machinery. So, you know, as a capitalist, you own the factory. You are getting income that, you know, is due ultimately from your ownership of the machinery. But in the short run, that machinery can't be moved around and reallocated. So, you know, there is surplus value, certainly in the short run, which unions can try and capture. But that's not the case with services. There isn't some other aspect of the business which is generating money that you can grab some of. So it's a sort of fixed capital element. I think in manufacturing, firms tend to be larger and have more market power. So that goes back to what I was saying about there being more kind of value on the table. And, obviously, service labor markets are more mobile than people working in a big factory. So an example from my own family history is my granny used to work, do seasonal labor for my granddad. So she used to work for him. He was a farmer. And so he would take on laborers at harvest time or whatever. And she was one of them. Anyway, she didn't like what she was getting paid. So she went down to Mr. Coates' farm down the bottom of the road. Exactly. I like that.
Speaker B:She got on her bike.
Speaker C:Yeah. But the point is that she had the power to do that because Mr. Coates had a farm. But if there's only one coal pit in your town, you can't do that. But services, you know, don't have anything like that sort of level of concentration. It is much easier to move around between, which is good for you as a worker, but it actually is bad for workers because it makes the free rider problem worse. I see what you mean. It's harder to put people into a union and get them to bargain collectively because they're much more fluid, you know.
Speaker B:But equally, you're incentivized as an individual to be a good and high valuable worker and to sort of be more productive so that you... Yes.
Speaker C:So that's another thing, which I think is the nature of work, that where workers are a sort of amorphous mass and they're just providing bashes of a hammer onto a bolt, you know, thousands of times a day and they can be switched out for one another. It makes sense for them to bargain collectively because they're collectively providing that service. But when everyone is different and everyone's doing different jobs, you can be a sort of one man union. Effectively, you can bargain on behalf of your own job. And I think you could say that that's what's been happening. Absolutely.
Speaker A:Nice. I've got a question before I do. You want to cover off anything else? OK. Yeah, here's my question. I've had lots of jobs. Lots. I once counted them and I didn't even quite believe the answer. But we're talking dozens. Dozens.
Speaker C:Yeah.
Speaker A:And I know plenty of people who perhaps had no more than two, three, four, five in their whole life. But I've had lots. What do you mean like a job? Do you mean like working for a different employer? Yeah. Well, yeah. Well, what else? Well, you can move around within a... Oh, no, no, no. Within an organisation. OK. No, no, no, no, nothing like that. And without going through them all, lots of those jobs have been good. Lots have been bad, depending on how you might define that. Interesting. What's the worst job you've ever had? Who wants to kick off?
Speaker C:Well, I mean, look, I sound really ungrateful. This is only the worst job I ever had through virtue of it having been the worst of a not particularly bad set of jobs, right? It was the most boring job I ever had. But I was perfectly well paid for it. And it was a summer job I had. And so I was, you know, I wasn't very employable. But my job was to update legal books. And legal books in those days, nowadays, I think it's all done on computers. But back in the 90s, they still had hard copies. Of these big ring bound law books. There'd be like, you know, 15 volumes of tax law. And so I was working at these lawyers. And they would get the updates. And the updates would come in a kind of shrink-wrapped envelope. And you'd undo them. And there'd be several hundred pieces of paper. Each of which was ever so slightly, subtly different from the piece of paper that was currently in that book. And then there'd be an instruction sheet. And it would say, replace page 1,378B with this. With this new page 1,379A. And you'd have to go through and literally one page at a time. Take the old one out. And put the new one in. And that's what I did non-stop for about two weeks. Every holiday. And it was, yeah. It was really, really tedious. But, I mean, luckily I was paid for completing the job. So it was like, you know, once it was done, it was done. So that kind of incentivised me to get it finished. But.
Speaker A:That reminds me when I interned once. In an NGO interview. In Geneva. Sounds hell. Oh, it was, oh, terrible. But I remember I wanted to. Everyone was desperate. Geneva's full of interns who are desperately poor. Trying to get something somewhere. With one of these amazing INGOs all over the place. And NGOs. But I met someone who worked at the Red Cross. And he'd managed to make that leap from interning into an actual job. But his job at the Red Cross. I think he was a lawyer. Yeah, well, he was a lawyer or something for the Red Cross. Big deal. But I think his was adjusting legal documents. A bit like you've said. What do you call it? Like a bibliography or whatever. At the end of an essay. That was just making sure it was all standardised. That was his job. Oh, wow. So after all these months. That's what brilliant we can get. He's probably head of international rescue.
Speaker C:Wax on, wax off of the job world. And I think it's important that everyone does a job a bit like that at some point. Yeah, absolutely. Chris.
Speaker B:Yeah. So I was brought up. So my dad came from a working class northern background. And he did jobs, you know, in like soup factories and things like that. He then became a professor. A university professor. And I didn't have a background or anything like that. So I didn't need a job. When I was at sixth form college and so on. But all my friends had jobs. And so I sort of felt a bit left out. Like that they were going off to work in a Burger King or something. And I didn't have a job. So I decided to get a job in a local supermarket. A chain called Norman's. In the south. In the southwest. And. And. I. I lasted about. A year. Three shifts. I think. The first shift. A woman came up to me and said. Do you know where the calamari is? That squid you know. And I was so incensed. That she thought I didn't know what calamari was. That I think I said something very rude to her or something. Oh really? Good for you. Anyway. And then on my third shift. Like halfway through. I was supposed to be moving some tomato ketchup bottles. When they were glass bottles. And they didn't have the plastic ones. And I knocked them off the shelf. And they smashed on the floor. And I was like. Oh. There's some stuff smashed there. Yeah okay. You need to clear that up. Me? The guy who smashed it has to clear it up. So I resigned on the spot. So yeah. That was my. Yeah. Ill fated job at Norman's supermarket.
Speaker A:If they could see you now though.
Speaker B:Yeah exactly.
Speaker C:Yeah these days. If you smashed a ketchup bottle. They'd get someone else to.
Speaker B:Yeah with their face.
Speaker A:I've jotted down a few of the jobs I've done. Call centre handler. I've done loads of those. Newspaper round of course. Double glazing salesman. That was one of my early ones. That was good. Got sacked from that. I got sacked from lots of these jobs by the way. And lots of other jobs as well. Burger van. That was really good. Shelf stacker. I got in trouble for stacking the cornflakes wrong. Handyman at the local district council. That was really good. If ever there was not much going on. I used to grab a hammer. And just walk around the offices with a hammer. Looking purposeful. And if I really wanted to I'd grab a step ladder as well.
Speaker C:Have you ever been on strike though?
Speaker A:No. I've actually been on strike.
Speaker C:I used to be in a union. When I was in the MOD.
Speaker A:I think I went on a day or two strike once. I should have asked that question. Have you ever been on strike? Have you Chris?
Speaker B:No I think I always. Born scab. Yeah I don't think I've ever belonged to a union.
Speaker A:I think I have once when I worked at Chatham House. Nearly there. Putting crayons in boxes. That was a bit boring. The two worst I've had was chlamydia. Lovely girl. So I was in this factory that manufactured chlamydia test kits. And my job was with a pair of tweezers. Had to put this little pad onto the plastic receptacle. And just on a conveyor belt. That went round. And that's why I did that all day long.
Speaker B:You were basically cheaper than a robotic arm. Yes.
Speaker A:Yes absolutely. And then in the evenings I went to work at a horrible pub. But the worst one. Which only lasted an hour or so. I was in a factory that manufactured car seats. Just the mould, the foam, whatever it is. I don't know. And my job was to stand there with a hoover. Next to this huge clunking iron steel thing going round. Hoovering off the scraps that had been left on the steel mould. Or on the iron mould. And that was my job. And I did that for about an hour. And I said I'm not doing this anymore. You can suck it up you said. Yes. And I remember saying that to a mate of mine once. And he said the worst job I ever had was taking the kidneys out of chickens. And he said my hands just stank of piss basically. Couldn't get rid of the stink. Chicken weed. Yes exactly. Great. Too much information. Let's stop there. Thank you as always for listening to the Cognitive Engineering Podcast. I'm Fraser McGruer. We've been here with Chris Wragg and Nick Hare of Aleph Insights. Until next time, goodbye.
