Fair pay deals are essential, but striking should only be a last resort

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Newsletter Editorial

All over Europe, America and other parts of the world, the cost of living is skyrocketing.

The reasons for the rise in prices are manifold.

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The Covid pandemic has thrown economies around the world into chaos.

Inflation was already on the rise in many ways. Admittedly, the risk has been a concern for more than a decade, due to factors such as ultra-low interest rates and quantitative easing (i.e. governments printing money).

And then there is the human tragedy and the economic disaster of the Russian invasion of Ukraine.

It’s not just gasoline prices that have skyrocketed. The price of oil did too.

Filling a typical sized household oil tank cost over £1,000 recently, and still costs almost double the cost it was at the start of the Covid lockdown.

The anxiety this causes is widespread.

Households everywhere are wondering how they are going to pay heating bills (fortunately, we are entering summer in the UK, which will give people some respite).

But also how they will drive their children to school or afford basic foodstuffs (given that Russia and Ukraine are such vital suppliers of wheat, for example).

It is normal for wages to increase at this time to compensate for the soaring cost of living.

Most employers are indeed increasing the amount they pay their staff. However, it is almost always shy of inflation.

Measuring inflation, however, is tricky (and contested) business. Some price increases are strong but temporary.

In Northern Ireland, a series of sectors are now threatening to go on strike, or are actually doing so.

Although fair wage agreements are essential, a wage spiral will itself contribute to inflation.

Strike action should be a last resort, and employers and employees should strive to reach reasonable compromises.

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