While not wishing to express an opinion about the merit of today's strike action in the U.K. (or indeed, the merit of the reasons for the action), I am interested in discussing the likely impact upon the U.K. economy. This is motivated somewhat by a discussion that I had with Kevin Denny on this year's Royal Wedding - and its impact on the U.K. economy. (Kevin, of course, has conducted research on unions in the past; and he has blogged recently about strike action in Ireland).
Overall, analysts who examined the economic impact of the Royal Wedding felt that the benefits of the event would be offset by lost production: "Philip Shaw, an economist at Investec financial group, said that allowing most workers a day off could knock some 0.25 percent from British gross domestic product (GDP) in the second quarter. Investec noted that growth had suffered as a result of Queen Elizabeth II’s Golden Jubilee celebrations in 2002... industrial production fell by over 4 percent and services by over 2 percent. Output in both sectors did not return to pre-June levels for some time… In 1981, when Prince Charles married Diana, the economy contracted by 1.2 percent despite the boost to tourism that the July wedding brought... The Confederation of British Industry reckons an extra public holiday typically costs the economy around 6 billion pounds in lost output."
While today's strike action was obviously different to a public holiday (as no private sector workers were involved in the conflict; and some balloted workers did not take part); there is still good reason to expect a detrimental impact on economic output. This story on the BBC website says that there were two million walkouts by public sector workers today; and it emphasises that parents of children whose schools were closed -- were also affected by the action. It says: "Ministers conceded that the economic impact would be no greater than that of a one-day holiday to celebrate the Royal Wedding."
Indeed, the economic impact is likely to be less than that of the Royal Wedding; even after considering that some private sector workers may have been forced to stay home today: to look after their kids (as well as there being other knock-on effects on the private sector). This article in the Wall Street Journal says that 58% of England's 22,000 state schools were shut today; and at least another 13% were partially affected (no figures were mentioned for the rest of the U.K.). The WSJ article also mentions that 2.6 million workers were balloted, suggesting (following on from other estimates) that 0.6 million public sector workers would not or could not participate in the action.
The cost of today's action was estimated to be in the region of £500m, according to U.K. Government ministers, as reported in The Guardian last week. However, according to the aforementioned BBC article, "there were indications that some businesses may have benefited from the strike action, with reports that some shopping centres had seen increased business." Nonetheless, one might wonder if the money spent in the retail sector today would have been spent before Christmas anyway. All told, the estimate for the (negative) economic impact arising from today's strike action is much lower in comparison to the Royal Wedding. Even using the estimate by the Confederation of British Industry that an extra public holiday typically costs the U.K. economy around £6 billion in lost output; it seems that one day of industrial conflict (in the public sector only) is not as damaging as one public holiday.
To conclude, it has been suggested by Mick Hume that it does not "help to compare the current action to the Winter of Discontent, when the public-sector unions went on strike against the Labour government’s policies of pay restraint. In 1979, 29 million working days were lost due to industrial action. Last year, the estimated figure was 365,000 days - not much more than one per cent of the 1979 record. Indeed, there have been fewer strike days in the past 20 years added together than in 1979 alone. So, claiming ‘the biggest strike in decades’ does not take much – and means even less." Furthermore, as Matt Cole notes, "trade unions have only half the members they had in 1979, and far fewer in the private sector in particular"; although: "the total number of union members on strike in one co-ordinated campaign is, at approaching 2 million, higher than on any one day since the General Strike".