Tag Archives: pensions strike

Why the “Cost to the economy” of strike action could be misleading

It’s become a modern catchphrase. When planes are grounded, when cars crash, when computers are hacked, and when the earth shakes. There is, it seems, always a “cost to the economy”.

Today, with a mass strike over pensions in the UK, the cliche is brought forth again:

“The Treasury could save £30m from the pay forfeited by the striking teachers today but business leaders warned that this was hugely outbalanced by the wider cost to the economy of hundreds of thousands of parents having to take the day off.

“The British Chambers of Commerce said disruption will lead to many parents having to take the day off work to look after their children, losing them pay and hitting productivity.”

Statements like these (by David Frost, the director general, it turns out) pass unquestioned (also here, here and elsewhere), but in this case (and I wonder how many others), I think a little statistical literacy is needed.

Beyond the churnalism of ‘he said-she said’ reporting, when costs and figures are mentioned journalists should be asking to see the evidence.

Here’s the thing. In reality, most parents will have taken annual leave today to look after their children. That’s annual leave that they would have taken anyway, so is it really costing the economy any more to take that leave on this day in particular? And specifically, enough to “hugely outbalance” £30m?

Stretching credulity further is the reference to parents losing pay. All UK workers have a statutory right to 5.6 weeks of annual leave paid at their normal rate of pay. If they’ve used all that up halfway into the year (or 3 months into the financial year) – before the start of the school holidays no less – and have to take unpaid leave, then they’re stupid enough to be a cost to the economy without any extra help.

And this isn’t just a fuss about statistics: it’s a central element of one of the narratives around the strikes: that the Government are “deliberately trying to provoke the unions into industrial action so they could blame them for the failure of the Government’s economic strategy.”

If they do, it’ll be a good story. Will journalists let the facts get in the way of it?

UPDATE: An inverse – and equally dubious – claim could be made about the ‘boost’ to the economy from strike action: additional travel and food spending by those attending rallies, and childcare spending by parents who cannot take time off work. It’s like the royal wedding all over again… (thanks to Dan Thornton in the comments for starting this chain of thought)