Energy Workers to Stage More Protests as Companies Raise Bills but Not Pay

Yves here. Lovely. Even though the staredown between UK energy company employees and their overlords has not gotten to the point of a strike, the impasse seems serious enough that that’s a plausible outcome.

I’d appreciate UK reader input. In the US, strikes by government workers are illegal (although some states allow state employee strikes) and some private sector workers also have restricted labor action rights. Readers may recall that just last month, Biden intervened to block a planned railroad worker labor stoppage. The politics of that would seem counter-intuitive. From WSWS on July 17:

The White House announced an executive order Friday afternoon creating a Presidential Emergency Board (PEB) to intervene in a national contract dispute in the railroad industry.

The announcement of the PEB, a form of federal mediation, blocks a potential strike by over 100,000 railroaders, which could have legally taken place as early as 12:01 AM on July 18, at the expiration of a 30-day “cooling off” period. Last week, railroaders in the Brotherhood of Locomotive Engineers and Trainmen voted by 99.5 percent to authorize strike action.

Workers have been without a contract for nearly three years, and conditions in the railroads are atrocious. Tens of thousands of workers have resigned in recent years, particularly due to the punishing work schedule, in which 70+ hours a week are not uncommon. Workers are on call 24/7, leaving them unable to plan a family life or even schedule medical appointments. In addition, workers have not had a pay increase since the expiration of the last contract, leaving them at the mercy of 9 percent inflation. Meanwhile, the Class I railroads have made record profits during the pandemic….

The move by Biden was widely expected. However, it is significant that the chief agitators for the appointment of a PEB were the rail unions, which had been pushing for it since May. This amounted to a demand that the government intervene to make illegal a strike by their own members. At the same time, SMART-TD President Jeremy Ferguson issued a statement denouncing as malicious lies claims that the unions were pushing for strike action or for wage increases that would keep pace with inflation.

The appointment of the PEB makes clear the true meaning of Biden’s boast to be the most “pro-union president in American history.” In plain language, this means that Biden is aggressively promoting the pro-corporate unions to suppress worker opposition.

This is a long way of introducing the notion that some private sector workers in the US have restricted labor action rights because the importance of certain industries gives their employees too much power their shutdown could have broad economic impact. I don’t seen any hint in the article below that the employees of power companies face any such restrictions.

Of course, the execs might be telling themselves with all the threats of shutdowns because Russia, that a strike will never be noticed. Or they might even welcome a strike now as a way of reducing energy demand now, to the benefit of supply in colder months.

By Adam Ramsay, openDemocracy’s special correspondent. You can follow him at @adamramsay. Adam is a member of the Scottish Green Party, sits on the board of Voices for Scotland and advisory committees for the Economic Change Unit and the journal Soundings. Originally published at openDemocracy

Grangemouth Oil Refinery in central Scotland. ‘The justified sinner’, some rights reserved.

Energy workers are promising rolling protests at major sites across the UK as employers push up bills and profits soar despite falling real-terms pay.

Speaking from Drax power station in Yorkshire, where he described working conditions as “red hot,” industrial scaffolder Richard Foster said workers at 29 sites across the UK had committed to protesting every other Wednesday until their wage demands are met.

Workers taking part in the action demonstrated at a number of sites that are vital to the UK’s energy infrastructure yesterday, including Drax, Grangemouth oil refinery in Scotland, Pembroke oil refinery in Wales, and Humber oil refinery in England.

“All they’re doing is driving profits up and driving wages down,” said Foster, who described workers on the site as “incensed”.

“We’ve paid our taxes to these companies,” he added. “They’ve had millions for them to have the privilege to give out £4,000 electric bills.”

Some workers on the sites, he said, are on rates as low as £10.36 an hour. For them, he said, “it’s either going to be energy or food in the winter time. They’re only just above the minimum wage.”

The demonstrations are targeted at the Engineering Construction Industry Association, the main employers’ association for the UK’s engineering and construction industry, and are in response to a pay rise offer of just 2.5% – which would amount to a significant real-terms cut. Foster insisted the actions are not officially strikes – yet – although he said employees had lost pay as a consequence.

He accused company bosses of being “rogue employers who won’t come back to the table to renegotiate the cost of living crisis”, adding that he believes the firms are “waiting for a recession – and then they’ve got an excuse not to pay us again”.

The Drax group posted profits of £398m last year, and increased its dividends to shareholders by 10% in February. Ineos group, which owns Grangemouth, reported profits of more than £2bn over the last financial year. The company’s owner, Jim Ratcliffe, has previously been listed as the UK’s richest person, but is now based in the low tax jurisdiction of Monaco.

The workers involved in the actions produce between them a huge portion of both the petrol and the electricity used in the UK, with Drax, Britain’s largest power station, providing 6% of the country’s electricity on its own. Should the actions develop into full blown strikes, they could have the capacity to shut down much of the UK economy.

The walk-outs come at a febrile time in the UK, with strikes on the railways and in Amazon warehouses alongside the first ever national call centre strike, and many other workforces balloting for action. Energy prices are soaring, and 100,000 people have already signed up to support the ‘Don’t Pay’ campaign and default on their bills.

Climate activists across the UK offered their support to the energy workers, with Climate Camp Scotland tweeting “full solidarity” for the walk-out at Grangemouth.”

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  1. c_heale

    Drax is the power station which is burning wood chips from the Appalachians and other forests in the USA.

    1. PlutoniumKun

      Back in the 1990’s I was on a tour of power stations in the UK and was told that Drax and Didcot would be closed in a few years (mostly due to gas CCGT which was on a tear at the time). At the time these power stations were used for winter peak demand only. This was political, not economics, as it had as much to do with Thatcher destroying the coal industry as anything else. Renewable mandates and wood chip were a license to print money for the owners. Radcliffe, of course, is very well plugged in to right wing Tory networks.

      If the workers don’t dig their heels in and fight in the next few months they don’t deserve pay rises. The UK network desperately needs this power, any disruption would be enormously costly to the owners and the UK economy as a whole. A few years back I was pretty horrified after talking to some construction guys to hear that casual construction workers in London were getting maybe half of what I earned as a student doing casual construction work in the summers in the late 1980’s (especially as I had no skills and wasn’t very good at anything). It was mostly due to the influx of cheap eastern European labour. Brexit has choked off that source, so it may be that Brexit could blow back in the face of people like Radcliffe.

  2. Dave in Austin

    Labor costs are a small and fixed part of the cost of operating a power plant. The big variable is fuel. When it goes up profits go up; when it goes down, profits go down. the same thing is true for refiners. The refiner profits went up when the price of oil went up; now it is down and if oil goes to $80/bbl the profits will crash (see Valero Oil, stock symbol VLO).

    Water, and electrical services plus rail, air and pipeline traffic simply can’t be interrupted without causing chaos. So in the US we have a vaguely syndicalist system which goes back to the New Deal: a union/management standoff takes place; the strike is announced; the federal “cooling of period” begins; the government jawboning of both sides begins. The goal is to give workers a pay raise while making sure that the raise doesn’t exceed the raises in other, less critical industries. It was a bipartisan arrangement put together in the 1930s by intensely practical people.

    Nobody wanted the Homestead strike model: workers go on strike and occupy the factory to make sure the owner’s can’t hire replacements; the owners say “Get off my property”; the workers say “No” and the police and eventually the armed Pinkerton guards and the National Guard are called out; families and children are moved into the factory. The cameras roll. unpredictable violence follows. It was a bit of dangerous theater, like “nonviolent” demonstrations are sometimes today.

    I know one of the rail-workers. When traffic went down and train size went up after 2008 the workforce was reduced. The workers are almost impossible to lay off, so when traffic increased management wanted to use overtime, which is expensive but better than new crews you can’t get rid of during a downturn. After enough 70-hour weeks some (not all) of the workers are very unhappy and started calling in sick- a version of a wildcat strike neither the union not the management likes. So we get the injunction and an administration that is caught between justifiable sympathy for the workers, the fear of inflation… and an election that may hinge on union support.

    Plutonium Kun’s comment about his work as a well-paid London summer construction worker in the 1980s mirrors exactly what happened in the US. US construction worker pay is 1/2 of what it was in the 1980s because of immigration, legal and illegal. In England that led to the collapse of “the Red Wall”; in the US it led to Trump.

  3. Anthony G Stegman

    From what I understand regarding the railroad employees contemplating striking Biden’s move is temporary only, allowing time for negotiations to continue. If an impasse is eventually reached the workers can strike. Of course, if their strike causes utter chaos across the land the president can invoke some kind of emergency authorization to order the strikers back to work.

    1. Yves Smith Post author

      This is not correct. You are again offering factually incorrect opinion as fact. You are in moderation for previous offenses. You never provide links. If you would do your homework and substantiate it, you would not be misleading readers, as your comment above does, because you would know what the underlying situation was or at least have an expert interpretation which would cite underlying facts/data.

      Here, all you had to do was read the linked WSWS article in the post:

      The announcement of the PEB, a form of federal mediation, blocks a potential strike by over 100,000 railroaders….

      However, it is significant that the chief agitators for the appointment of a PEB were the rail unions, which had been pushing for it since May. This amounted to a demand that the government intervene to make illegal a strike by their own members….

      The legal framework for the PEB comes from the anti-worker Railway Labor Act, the purpose of which is to eliminate strikes by ensnaring workers in virtually endless rounds of mandatory negotiation, mediation and arbitration. The RLA itself, first passed in 1926, is the outcome of a series of legislative attempts at preventing strikes in the industry following the Great Railway Strike of 1877, the first major industrial struggle in American history. Such legislation went hand-in-hand with company gun thugs, court injunctions and the deployment of state militia.

      The RLA was passed only four years after the Great Railroad Strike of 1922, in which 10 workers and their family members were killed. It superseded the previous Transportation Act of 1920, which created a nine-member Railway Labor Board to ostensibly “mediate” disputes between workers and the railroads. The immediate trigger for the 1922 strike, which involved 400,000 workers, was the Board’s approval of wage cuts for railroad shopmen….

      The last PEB convened for the national rail contract was in late 2011 during the Obama administration, in which Biden was vice president. The former candidate of “hope and change” appointed a board that adopted virtually all of the companies’ demands, with only a few bogus “compromises,” including increasing out-of-pocket health care expenses at a somewhat lower level than demanded by the railroads. The recommendations called for a 16 percent wage increase over five years, effectively a pay freeze.

      The first two paragraphs of text were actually in the post. You could simply have read the WSWS article to confirm it was not taken out of context or there were other routes by which the workers could strike.

      Further confirmation comes in”

      ….railroads are governed by the Railway Labor Act (“RLA”), a federal statute designed to bring the parties to agreement without disruptions to rail transportation….

      the process can include mediation by an independent federal agency and action by the President of the United States if necessary to facilitate resolution of the parties’ negotiations.

      In other words, the baord can impose a deal in the name of the President.

      This is your final warning. One more comment like this and you will be blacklisted. My time is better spent writing new posts than having to intervene in comments.

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