The Guardian view on trade unions: good for capitalism

Some journalists disparage summer as a dry, barren season, but this month has yielded a bumper crop of ancient cliches. Try union barons, militant strikers or Labour paymasters.
That’s right, Sir Keir Starmer’s pay rise for junior doctors, train drivers and others has prompted many rightwing politicians and pundits to riffle through their Roget’s stale-o-saurus. Rather than laugh them off, the chancellor, Rachel Reeves, has promised there will be “no blank cheques” (another old saw). But there will be more, so much more, of the anti‑worker language as the Trades Union Congress meets next month and Labour ministers enact their promised new deal, which will roll back some of the most egregious legislation against trade unions from David Cameron and Rishi Sunak.
Rather than adjudicate each and every one of the pay claims, it is worth making two broad points about the role of trade unions and public sector workers in our country. First and most obviously, teachers, nurses and doctors – to name just a few of the professions to whom we entrust the bodies and minds of ourselves and our loved ones – saw their pay slashed in real terms under austerity. According to analysis from the independent Institute for Fiscal Studies, a typical doctor’s salary is worth 15% less today than it was in 2010, a teacher is 10% down. One result is that the UK now has a shortage of doctors and teachers.
That shortage means cancelled operations and no appointments before Christmas. It means schools shelling out extra on supply staff or children missing maths and science lessons. It is a headache for patients, parents, headteachers, NHS managers and government ministers. And if the right aren’t perturbed by any of that, they should at least acceptthat that shortage is also a market signal that these jobs and their terms and conditions are not up to standard.
Given that energy bills are set to rise by an average of 10% this winter, that pressure to do something about public sector pay would only have built. As Ms Reeves rightly observed, there was “a cost to not settling”. Of course, there have been warnings about the dent to public finances – but there is also a financial and social cost to industrial action, to wasted intellectual potential and to time lost while workers are ill.
Second, trade unions are an essential part of a modern economy. Those “union barons” are elected and accountable to their members, in a way that no FTSE chief executive is really beholden to employees, suppliers or shareholders. And their members are ordinary workers (rather than “dossers” or “lead-swingers” – more cliches) who, over the past four decades, have been stripped of many of their essential rights to organise and demonstrate.
Evidence suggests that, just as with privatisation and outsourcing, the UK has gone further down this road than many other rich countries. Union weakness has also weakened capitalism, according to no less an authority than the International Monetary Fund. Straight after the banking crash of 2008-09, its economists published a study arguing that a big reason for the crash was that workers were being driven to borrow more. The IMF researchers’ recommendation? A “restoration of the lower income group’s bargaining power”. In other words, Sharon Graham and Mick Lynch are good for capitalism – the IMF says so. Now there’s an uncliched thought.