Millions of public sector workers are expected to vote on strike action over pay this autumn in what could be the biggest wave of industrial action since the 1970s.
The walkouts could see shortages in hospitals, fire stations, schools and on the transport network, if negotiations over pay rises cannot be resolved.
Unions say pay offers are not keeping pace with the soaring cost of living, but the government says it must tackle rising inflation and says hiking up pay now could result in prices increasing even more.
In a Sky News special report, Cost of Living: Wage Wars, we look at how a rift between the government and public sector workers risks erupting into large-scale strikes similar to those seen in the late 1970s when millions of workers walked out over pay.
Back then, inflation was soaring just as it is today and the unions were demanding greater pay rises for their members.
But the Labour government, led by James Callaghan, refused.
Over a long and bitterly cold winter, strikes broke out; train drivers, nurses, lorry drivers – even the grave-diggers walked out. Towards the end of 1978, the binmen went on strike and the rubbish piled high in the streets.
Now, a strike threat by unions is only adding to the challenges facing whoever wins in the contest to replace Boris Johnson in a modern day take on an old dispute.
It comes at a sensitive time for the economy, with both the Treasury and Bank of England struggling to rein in inflation.
Already this summer, strikes on the railway by members of The Rail, Maritime and Transport Workers (RMT) union have caused widespread disruption across the country.
In England and Wales, the majority of teachers have been offered a 5% pay increase.
In Scotland, the offer was two per cent – both below the rate of inflation.
Teaching unions say this represents a significant real-terms cut to the salaries of most teachers and all school leaders, and that salaries have already dropped by 20% in real terms since 2010.
‘Enough is enough – we’ve got no money’
Rachel Badzire, a special needs teacher from Cheshire, says her salary of £35,000-a-year is not going up enough to match the rising cost of living.
The mother-of-two said: “I don’t overspend. But I am noticing that where I could spend £30 or £40, I’m now spending £60.
“I can understand there is no finite purse, there never has been, but we cannot simply say one profession is more valuable than another. A nurse saves lives, but without teachers, where does that foundation come from to allow people to develop and get jobs like nursing.
“I do think that more and more people are saying enough is enough, we’ve got no money.”
But when it comes to walking out, Rachel is undecided.
“Being a parent myself, pupils would be disrupted by teachers not being in school. And so I do think that that adds an extra weight to my decision-making.
“Having said that, if I was balloted for strike action I would be leaning very much towards voting for it.”
‘We need to be listened to’
In June, firefighters were given an offer of a 2% pay rise, which their union has rejected, describing it as “utterly inadequate”.
They say between 2009 and last year, firefighters’ real pay has been cut by 12%, amounting to nearly £4,000.
Adam Hooks is a full time firefighter and earns £32,244 a-year.
“When you get to a point where you can’t cover the bills because inflation is that high, and you are not even keeping up anywhere near with inflation, I feel like something has to be done.
“I’d like to have enough money to not have to worry about things.”
Deciding on whether to strike or not is a difficult decision.
“No firefighter wants to strike, and a lot of us live in our community. We do the job because we want to help people. But we have to be paid fairly for it.
“We do need to be listened to. There are a lot of firefighters struggling with the wages and just trying to pay the bills, never mind having any sort of luxuries or anything like that. They’re struggling just to pay the bills.”
Nurse swaps meals for high-calorie shakes
Nurses like Katie Sutton are turning to more drastic measures to save money. Katie has started to eat high-calorie shakes instead of preparing proper meals.
“It works at about £2 a meal,” she said.
“I will usually make a shake, and I’ve got 400 calories, and it will keep me going.
“I am already £250 into my overdraft and the cost of everything is just getting too much. I think a lot of nurses will decide that there is no option but to strike.
“I am not sure who will look after my patients if I took industrial action. It’s something I will consider very hard and if this situation is not resolved, and we don’t get the pay rise that we desperately need, then I will strike.”
Nursing salaries have dropped by 10% in real terms
Nursing unions had asked for above inflation pay rises for their members. In Scotland, a 5% offer was made in May.
In July, nurses in England and Wales were told they will get a pay rise of at least £1,400, which is on average around a 4% increase for most nurses.
The Royal College of Nursing said this means the value of nurses salaries has dropped by 10% in real terms since 2012.
The government says a hike in public sector pay would cause a spike in the demand for goods and services and that would cause prices to rise.
But the cost of living is not slowing down either.
New forecasts suggest energy bills could rise to more than £4,200 in April, wiping out the £15bn support package the government has pledged to help struggling families.
How have wages changed over the years?
Sky News’ Data and Forensics team have taken a look at how wages have changed over the decade to 2021.
While average wages have increased, many public sector workers are worse off than they were a decade ago because pay has not increased as much as prices have.
Real pay – wages adjusted for inflation – is 3.1% lower than in 2012 for primary school teachers and 1.9% lower for secondary school teachers.
Nurses and firefighters look to be marginally better off than they were a decade ago, but this chart does not tell the full story, as the data is only available up to 2021.
We do have more recent data on how real earnings have changed for the public sector more broadly.
As this chart shows, rapid price rises over the past year mean that public sector pay is 4.1% lower than 2012 in real terms.
This has widened the gap between the public and the private sector, where average wages are still 4.3% higher than a decade ago.
Moreover, even the moderate real wage growth experienced by firefighters is poor compared to previous years.
This chart shows how the financial crisis ended decades of consistent wage growth. Between 1988 and 1998, real wages increased by more than a fifth.
Whereas, in 2022 we are poorer than we were in 2006 as inflation has eroded our spending power.
Therefore, even professions that have experienced moderate pay growth are seeing nothing compared to what we saw in the decades before the financial crash, when we were used to continual large improvements to living standards.