Last week’s doctors’ strike in the UK has had many people shaking their heads and wondering why the negotiations over a new work contract between the government and the British Medical Association (BMA), a doctors’ union, got so out of hand. The strike was not good for the images of government or doctors, and most seriously, it was not good for patients of the National Health Service (NHS) – around 3,300 scheduled routine operations had to be postponed because of the 24-hour walkout. Surely such damaging action to all parties involved could have been avoided?
I don’t claim to be privy to any insider information, so I will limit myself to some thoughts from an economist’s point of view. The economics literature on strikes dates back to the 1970s, and the general consensus that emerged is that strikes are caused by asymmetric information. The union overestimates the profitability of their employers and demands a wage that is too high. This leads to a strike, which lasts until the union settles for a lower wage. Academic interest in strikes and other industrial actions – such as sit-ins, work-to-rule, lock-outs, overtime bans, etc. (yes, there are a lot of ways in which employees can vent their frustration) – waned in the early 1990s. The issue seemed settled not only theoretically, but also in practice, as both the number of strikes and of union members decreased, particularly in the UK and the U.S.
However, strikes have not disappeared just because most economists have stopped looking at them. In fact, if we consider the data for the UK provided by the Office for National Statistics (ONS), we can see that the total working days lost (788,000) in 2014, the most recent year available, is not only higher than in 2013 (when it was 444,000), but also higher than the average number lost per year in the 1990s and 2000s. Of course, the ONS is quick to point out that we still see a lot fewer days lost to “work stoppages” – the official term for industrial action that leads to a cessation of work – than in the 1980s and before, when industrial action was more common. Nevertheless, it is clear that unions are still perfectly willing and able to strike.
We live an age of financial disclosure, where concealing a company’s (or a government’s) financial situation is not impossible, but arguably much more difficult than it was a few decades ago. So is the conventional explanation for strikes based on asymmetric information still convincing, or is it time to look at other possible causes of such an inefficient conflict?
I believe that we can look at the study of human behaviour to gain some new insights into why we might be willing to hurt ourselves just to make a point. In a paper published in 2014 together with two co-authors, I propose that strikes are a manifestation of “expressive behaviour” in reaction to unfairness. For example, if my employer offers me a wage that I perceive as grossly unfair and I am a member of a workers’ union, I may vote in favour of a strike just to vent my feeling of outrage – even though I am perfectly aware that if a strike were to happen, it would harm me (at the very least, I’d be likely to lose part of my wages). However, I’d be perfectly rational in thinking that the larger the union, the less likely my single vote would be to change the outcome of the strike ballot (much as in any political election). Yet, precisely because of this, we find that the larger the union, the more likely we are to see a strike.
You may say that this is all very well, but why wouldn’t the employer anticipate this behaviour and offer the union a slightly higher wage to appease it? In fact, we’re still talking about asymmetric information, but now it’s the employer who is in the dark. The trouble is, levels of emotionality or “expressiveness” among union members are hard to gauge. Which employer demand is really one step too far? Which employee threat is just “hot air”? Add to this some harsh words and a show of intransigence in a long-drawn-out negotiation, and emotions may boil over and end in a picket line outside your hospital.
Let’s hope that the government will no longer underestimate the level of expressiveness of junior doctors in the NHS, and that a compromise may be reached soon. The strike planned for next week has been called off while talks between the parties go on. However, there is still an all-out, 48-hour strike by junior doctors looming over hospitals in February.
Of course, the government has the option of imposing the new work contract, but that seems like a very risky strategy given the levels of emotionality involved. In the meantime, it showed yesterday that strikes in the public sector are still very much a concern by introducing new participation thresholds for union strike ballots into the trade union bill currently going through parliament. Whether requiring at least 40% of union members to vote for a strike is likely to cheer up disgruntled employees is anyone’s guess.
Brunnschweiler, Christa N., Colin Jennings and Ian A. MacKenzie (2014), A study of expressive choice and strikes, European Journal of Political Economy 34: 111–125.