Strikes a natural consequence of workers operating in a market environment

Strikes and striking workers tend to get a tough time. When Ryanair pilots take strike action, the first headline you see typically focuses on disrupted commuters and holidaymakers. Not too long ago, the same was said about Luas tram drivers holding the good people of Dublin to ransom.

What is often presented here is an illiterate analysis of important social phenomena. Those who berate strikes fail to grasp the structural realities about the world of work challenges.

Participation in the labour market is a common feature of life. It can help to think of this as a bit like an investment strategy for the individual. Investment in a job is, for most of us, how we sustain a living standard and pursue career ambitions. What is invested is time and effort and, in return, we get wages and salary, while company owners make profits and dividends.

But wages and salary are also a reward for “risk”. Workers do not typically have a say in how their company is run and in sellings one’s skill and competence, the employee runs the risk of the employer later going out of business, exposing people to the costs of redundancy, unemployment and job search.

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Workers’ investment into jobs operates under conditions of uncertainty. Market oscillations, technological change, rising living costs or economic crisis alter the conditions on which peoples’ investments were first made. Future job changes are difficult to specify at the outset, so buyers (managers) and sellers (workers) can often hold different views over how much work effort and of what sort is satisfactory.

Unexpected changes in the environment can radically alter the conditions on which the terms of the investment are first made. And where unwanted changes occur, parties to any deal can become concerned.

It would be unwise, even irrational, for a worker to continue to invest on the same terms as the initial bargain, when the returns on investment are not as they expected or were promised. They should be free to choose the conditions on which they supply their effort.

It is not always feasible for the individual to exit the contract; nor is it desirable for the employer who would be left with the costs of training replacement hires. It is more useful for the seller to try to renegotiate the conditions of supplying their effort. A strike, or the threat of a strike, is one point in the spectrum of negotiation and the stage of last resort – “if you don’t meet my (or some of my) demands, you aren’t going to get the same labour out of me”.

The real lesson here is for employers to see this as a natural consequence of operating in a market environment. Disputes over the supply of labour are natural. It is best to be prepared for them, agree procedures for handling such disputes as they arise, and be prepared to negotiate seriously and sensibly.

Ordinary public

Of course, strike action does cause disruptions for the ordinary public. But there is much more to a proper understanding of strike and conflict behaviours.

Imagine a company in financial trouble, perhaps suffering declining profits. Shareholders are upset and assert that returns must improve. To enact efficiencies, jobs go, redundancies follow, and plant investment is shelved. Perhaps those lucky to remain in a job are told they need to work longer hours with no extra pay or suffer more job losses.

How different is this employer behaviour to a workers’ strike?

We tend to be fatalistic in accepting the employer’s concern as some natural order of the market, even though the consequences of a firm’s “investment strike” might resonate for months, years or indeed decades in the form of unemployment and regional scarring.

Workers’ strikes, for all the inconvenience they may cause, are usually short-lived. But, despite the more severe consequences of a “corporate strike”, it is rare to find outraged commentary in the media about already well-paid chief executives holding the State to ransom.

This bias works in other ways. Some say we should ban worker strikes, at least in essential services. But why not ask whether, in the national interest, we should ban the investment strike by firms who relocate and destroy communities and regions?

You can just imagine the clamour against any government that did so.

Employers may charge that worker strikes risks the business as an ongoing concern, placing jobs and future employment at risk. Yet this position is not very convincing. Workers tend to be rational and generally moderate investors. Workers are unlikely to strike if the consequences are to obliterate their livelihood.

If employers genuinely think strikes risk job loss and business closure, they can address the issue by opening their books, allowing workers access to the company’s financial information. And then follow global “good practice” advice from the likes of the United Nations and the International Labour Organisation by entering into genuine collective bargaining arrangements to help find agreement.

Niall Cullinane is senior lecturer in management at Queens Management School, Queens University Belfast. Tony Dundon is professor of HRM and employment relations at the Work & Equalities Institute, Alliance Manchester Business School, University of Manchester.