Small business owners in the UK are facing challenges in the current economic environment such as rising prices, a sluggish economy and worker shortages. While many business owners are struggling to raise wages for their employees, public sector workers are striking for better pay and working conditions.
Despite the inconvenience and disruptions caused by these strikes, I believe small business owners should support these workers as this is a key requirement for the rebalancing of the UK economy, something that will directly benefit private companies and their employees.
As an owner of a digital marketing agency, I am conscious if we are to get out of the UK’s cycle of low productivity and low wage rates, we’re going to have to do something to kickstart the UK’s economy.
Decent Public Sector Pay Will Benefit The Whole Economy
When public sector workers receive decent pay, it will have a positive impact on the overall economy. This will lead to increased consumer spending and a stronger economy, which will benefit small business owners and their employees. For instance, increased consumer spending will likely result in increased demand for goods and services offered by many small businesses and their suppliers, leading to higher revenues and profitability. This in turn means we can pay our own employees more and invest. We’d all appreciate that!
What’s Caused Public-Private Sector Wage Disparity?
The causes of the disparity between public and private sector pay in the UK are complex and multi-faceted. Some factors include differences in bargaining power, the skills and qualifications required for different types of jobs, productivity levels, as well as the size and structure of organisations. However, it has been the government’s policies, regulations and budget constraints – largely in the form of the Tory government’s austerity policies – that have played the main role in affecting the level of pay and benefits provided to public sector workers, when compared to their private sector counterparts.
Recently, wages have grown at the fastest rate in more than 20 years but are still failing to keep up with rising prices. In real terms, wages fell by 2.6% once adjusted for inflation. In addition, the gap between public/private sector pay is massive, with private sector wages growing 7.2% annually but public sector wages only increasing by 3.3%. The rising cost of living is causing thousands of people to go on strike, leading to disruptions in various industries and the loss of 467,000 working days in November 2022.
The UK’s employment rate has remained largely unchanged and the unemployment rate has only risen slightly, despite fears of a stagnating economy. The Prime Minister, Rishi Sunak, has pledged to halve inflation this year, but many experts are sceptical of this happening due to persistent inflation fears. Interest rates have been steadily increased by the Bank of England to control rising prices, making it more expensive for ordinary people to borrow money. 1.4 million households in the UK will have to renew their mortgage deals this year. Hands up, I’m one of them. Right now it’s looking like we’ll have to find an extra £350 a month to cover the increased mortgage costs and that’s after having to cope with around the same increase in monthly gas and electric prices only a few months ago.
Of course, all small business owners are feeling the pinch of the economic circumstances too. Many are struggling to pay for rising commercial energy bills and to offer attractive pay offers to overcome worker shortages in certain sectors. Many businesses that are just about managing to get by, are also having to increase their fees to cover the costs of paying employees above the National Living Wage. This all reflects the stagnant economic conditions a vast number of UK businesses have found themselves in over the last decade or so.
In this context, small business owners should support public sector strikers as they fight for better pay and working conditions. The public sector is a large and important part of the UK’s economy and has a significant impact on the country’s overall economic health. By supporting public sector workers, small business owners are simply helping to rebalance the UK economy and improve the economic prospects for all everyone.
Furthermore, supporting the strikes can also help to address the disparity between public and private sector pay. The current gap is near a record high, with private sector workers earning more than double the increase in pay compared to public sector workers. This disparity is unsustainable and contributes to income inequality in the UK. By supporting public sector strikes, we can help to reduce this disparity and create a more equitable and balanced economy.
Despite the disruption and inconvenience caused by strikes, we’ve got to view them as a necessary evil and an opportunity to support fellow members of society and generally help to improve the UK economy. By doing so, we can help to ensure all workers have access to a good wage, which in turn will create a stronger and more sustainable economy that we can all enjoy.
How Small Business Owners Can Support Public Sector Strikers
Small business owners can positively support public sector strikes in several ways. One of the most direct ways is to publicly voice support for the strikes and the reasons behind them; such as fair pay and better working conditions for public sector workers. They can also actively participate in events and activities related to the strikes to show their solidarity with striking workers. I know solidarity can be a bit of a dirty word in the public lexicon, so perhaps we should stick with support.
Another way for small business owners to support public sector workers who are striking is to provide practical support to striking workers. For example, strikers may require temporary jobs or other forms of assistance as they’ll be losing wages due to the strikes. Additionally, they can also engage with their local elected representatives to advocate for policies supporting the strikers, working towards ending the strike and reducing the pay disparity between public and private sector workers.
Let’s be clear, the current economic situation is challenging for most small business owners. Whenever I speak to business owners they’re all telling me about the tough times they’re having. However, supporting the public sector workers during this difficult period is a small but meaningful step towards creating a more equitable and sustainable economy for all. And this could be the catalyst for growth we’ve been looking for, for a long time!