The BoE has been banging the wage restraint drum for a while. Bailey on the Today Program in February:
“I’m not saying nobody gets a pay rise, don’t get me wrong. But what I am saying is, we do need to see restraint in pay bargaining, otherwise it will get out of control.”
Back in May, his Chief Economist Huw Pill got in trouble for expressing the sentiment thusly:
“Somehow in the UK, someone needs to accept that they're worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing energy costs through on to customers,” which Bailey had to walk back.
Last week on Sky News, he was pitching a version of that same position, though, that balanced calls for wage restraint with calls for companies to exercises restraint on profit margins also:
“We've got to get and we will get inflation back to its target. To do that … we cannot continue to have the current level of wage increases, and we can't have companies seeking to rebuild profit margins which mean prices continue to go up at their current rates.”
This is probably the closest example, and he is toeing the line there on a direct appeal to workers. But it also seems like broad expectation setting to both workers and employers that high inflation will not continue, so you don't need to price that in. It is a bluff on his part, but one that (in theory) works out if everyone believes it.
>… when he suggested workers shouldn’t ask for big wage increases…
How is that not directly telling workers to not ask for wage increases? I’d also say adding the word “chastising” is changing the tone of what the original commentor and I were referencing when talking about governments asking workers to not ask for wage increases.
The author is doing a lot of heavy lifting with the word "suggesting". I can't find any quote that suggests he is actually saying workers shouldn't ask for raises. Here's the closest I could find:
"To do that I have to be clear – and we expect inflation to come down this year – to do that we cannot continue to have the current level of wage increases ... And we can't have companies seeking to rebuild profit margins which mean prices continue to go up at their current rates...But what I would say to people is we expect inflation to come down, and it is important then that price setting and wage setting reflects that."
Again, nothing "suggests" that he thinks workers are supposed to be blamed for wage increases being unsustainable. If anything he is blaming corporations!
Is wage setting not an activity taken on by the labor force? I can see how a reasonable person might interpret it that way, but I also see how it’s interpreted as a message to labor. Otherwise you might be suggesting that capital has all the negotiating power and there isn’t any market for labor and that sounds rather communistic which I’m sure these fellows wouldn’t ever imply
Worker wages have been stagnant for a decade plus. Even the recent increases have been vastly outpaced by increases in prices AS EVIDENCED BY INCREASING PROFIT at companies that are increasing wages.
The problem is there is no price competition because most sectors of the economy are oligopolistic and have no interest in competing with each other one price at the moment.
[1] https://www.bloomberg.com/news/articles/2022-03-17/powell-tr...