Thursday, February 28, 2008

Local Government Pay - lessons from the past...

I am sorry if I am becoming obsessive about local government pay – but then this is an unashamedly trade union related blog, so I don’t imagine you’re reading it primarily for its entertainment value.

My last post looked at the statistics which show how the real earnings of local government workers have been declining since our last national pay strike – and consequent settlement – in 2002. (I know that I am simplifying things massively in both that post and this – but I think that’s necessary).

The question of course is what to do about this. I think we should look at evidence about what has happened in the past, and try to work out from this evidence what might happen in the future. One valuable source of historical information on local government pay is the report of the Local Government Pay Commission.

It’s four and a half years old of course, but it still contains some useful data, such as the table above, which shows the relationship between NJC pay settlements and earnings growth in private sector services between 1988 and 2002.
This shows that for most of that period, NJC pay settlements were below the rate of earnings growth in private sector services – the exceptions are three consecutive years in the early 1990s (1990-92) and 2002 itself (which was the last settlement before the Pay Commission collated this data).

What accounts for these periods of relatively rapid pay increase in local government? Well, at the risk (again) of oversimplifying, it is pretty obvious that the national pay strikes in 1989 and again in 2002 are both associated with brief periods in which local government pay accelerates above its general trend, which is to grow more slowly than earnings in the private services sector.

Successful national strike action can secure a better pay settlement in the year in which it is taken but can also have a knock on effect for a little while. Without occasional national strike action, local government pay will tend to fall behind. So, I think, we do need to begin to prepare for national strike action.

The question then is, how are we going to organise this to win, in circumstances which are certainly far less favourable than they were in 1989…?

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