Comment: Wage militancy | pay-rolls | rebalancing

A series of strikes and demonstrations was directed at Wal-Mart, the US's largest retailer. Picture: Getty
A series of strikes and demonstrations was directed at Wal-Mart, the US's largest retailer. Picture: Getty
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Wage militancy is back. On Thursday, there were coordinated protests by fast food workers in 190 American cities, as part of a campaign to double the federal minimum wage to $15 (£10) an hour.

The so-called “Fight for 15” movement has already organised eight mass protests in the past two years. Thursday’s was the biggest yet. On Black Friday last week, the main pre-Christmas shopping day in the US, another series of strikes and demonstrations was directed at Wal-Mart, the US’s largest retailer, affecting 1,600 stores across the States.

These protests involve radically new tactics. The sectors where low pay is endemic are poorly unionised. But instead of pushing for a closed shop, Fight for 15 has copied the tactics of the anti-poverty Occupy movement. This involves staging repeated public demonstrations designed to embarrass publicity-sensitive employers.

Since Ronald Reagan and Margaret Thatcher, legal restrictions have prohibited traditional picketing. But loose campaign groups can evade such restrictions. Fight for 15 used Facebook and Twitter to call on Wal-Mart staff to spontaneously “walk off the job” on Black Friday. The company had no legal recourse, as it wasn’t a traditional strike. Use of such tactics is spreading to other low-pay sectors, including airport workers and the hotel industry. Such protests have not spread to the UK to any extent. They will.

UK an open goal for guerrilla protests

US LABOUR unrest is being fuelled by the robust rise in job numbers tempered by tepid wage growth. Non-farm payrolls increased by a surprise 321,000 jobs in November, according to data released yesterday.

This is the tenth straight month that monthly job growth has exceeded 200,000 – the longest such stretch since 1994. But average hourly earnings are up only 2.1 per cent on the year, barely keeping pace with inflation. The income situation is even worse in the UK. British workers have suffered the biggest drop in real wages of all major G20 countries while the Bank of England says that employment growth in the UK has been concentrated among young, lower-paid workers – precisely the social media savvy generation likely to respond using US-style guerrilla protests.

One balancing act that looks to be set for a fall

ONE statistical nugget buried deep in the Chancellor’s mini-Budget: the Office for Budget Responsibility has now raised its estimate of the UK’s current account deficit by 1.5 percentage points of GDP annually till 2018.

Decoded: not only does Britain have the worst deficit of any major economy – a galloping 5.2 per cent of GDP. But now the OBR admits this state of affairs is permanent. I smell market wobbles to come. The current account deficit is what you need to borrow internationally to pay for the excess of imports over exports.

So much for Orborne’s promise to “rebalance” the economy. Of course, foreigners have always been happy to put money into the UK, so why worry? Because the FTSE has slid 6.3 per cent this year – a worse performance than the main eurozone index. With a quarter of the FTSE represented by energy companies and miners, global deflation could easily trigger a bear market in the UK. To keep hot money in the UK, interest rates will have to shoot up. Which means the Chancellor will have no hope of balancing the books by 2018.