Strikes: what’s the real cost?
Strikes are erupting from the US to South Korea, dominating headlines across the world. IGTV financial analyst Angeline Ong takes a look at the real cost of strike action, and why it could fuel inflation pressures further.
(Video Transcript)
High inflation, climate change drive labour action
Strikes have dominated the headlines recently, and it's not hard to see why, from US auto workers to rail doctors, teachers in the UK, South Korea and New Zealand, this is no longer a local phenomenon.
And part of the reason behind these strikes, stubbornly high inflation, stood for a variety of reasons, including post-lockdown revenge spending, Brexit, the supply chain crisis, and weather, too.
Cost-of-living crisis cripples consumers
Inflation, in some cases, has risen faster than payoffs, causing a cost-of-living crisis and crippling much of the ability for consumers to spend and get the same number of goods that they did just a few months ago. So what's the real cost?
Well, the lengthy United Auto Workers (UAW) strike at General Motors is set to cost $1.5 billion, according to Credit Suisse, and this is even before any extension.
Rail strikes earlier this year is estimated at £1 billion. That's the cost to the UK economy. But the cost is likely to be far greater, as it doesn't include the impact of people not being able to go to work, for example, and significant wage settlements could also put steel on the inflation flame further.
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