Thursday, October 11, 2007

Post Office Strike

My opinions about the post office strike might be coloured by the fact I am still waiting for my September wage check to get sent to my bank. It is lost in the post strike and is more than a minor inconvenience.

Strikes have a history of polarizing public opinion. Over 20 years ago, the country witnessed a very bitter battle between the mining unions and the Thatcher government. When the Miners were defeated many saw this as the beginning of the end for mass trades union power in the UK. However, despite a decline in union membership, they do retain some influence in certain sectors of the economy.

Some notes on:

Economic Effects of the Postal Strike

  • Lost output and productivity.
  • Many small businesses rely on mail to deliver cheques and goods
  • Will affect mail order companies the most, although there is evidence that companies like Amazon are searching for other options
  • Late Payment for Bills. Could lead to adverse credit rating for some people.
  • Royal Mail is losing confidence and contracts. This could lead to job losses in the future.
  • It may make it easier for new firms to enter the mail industry. The mail industry was deregulated (opened to competition) a few years ago. However, it is difficult to enter because the significant economies of scale make it almost a natural monopoly.

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