Jeremy Corbyn was slated by the media for suggesting the implementation of a maximum wage, but it begs the question, why are we scared about talking about pay inequality?
FTSE 100 bosses earn average of £5.5m per annum, rising by a tenth from the previous year and at 147 times the amount an average worker earns. They make more in 2 and a half days than the average worker all year.
The Labour leader, Corbyn said ‘We have worse levels of income disparity than most of the OECD countries in this country. It is getting worse… If we want to live in a more egalitarian society and fund our public services, we cannot go on creating worse levels of inequality.’
After a year in which “elites” were criticised for being out of touch and ignorant about the concerns of ordinary people, these pay gap figures confirm that there are dramatically different rates of pay at the top compared with what everyone else receives.
And excessive private sector pay deals set a bad example to some public sector and not-for-profit organisations, as controversy over the pay for some university vice chancellors, school “superheads”, NHS Trust chief executives, local authority leaders and some charity bosses suggests.
It is arguable that a maximum wage on its own would not make any difference, as the excess would simply be transferred from the pockets of CEO’s to the pockets of shareholders, but this is not an excuse to simply ignore the issue. Other ideas, like a higher top rate of tax, a cap on the amount of dividends that can be paid out unless all staff are paid a real living wage and a fix to corporation tax loopholes, should also be developed and rolled out.
In many businesses savings are sought, with job losses, automisation and salaries falling in real terms since the financial crash, but this does not extend to the person at the top apparently.
The increase in top pay in recent years seems to have arisen because of so-called “performance-related pay” awards. But as research from Lancaster University Management School has revealed, the link between pay and performance has in fact been “negligible”:
Even Theresa May has announced that the issue needs tackling, yet still does nothing about it. Perhaps she believes in a shareholder revolution, which inevitably will never come – people will take what they can if there is no-one to stop them. Then again, this is the same May who has said time after time that Government that is working to deliver an economy that works for everyone, yet her policies do the exact opposite: one might suggest that you should take every word she utters with a rather large pinch of salt.
So who is afraid of talking about the issue? Certainly the top FTSE 100 bosses, most certainly Rupert Murdoch and the other moguls who control the media, and quite possibly a number of politicians who have vested interests in the business word – but we must force the topic into public debate, make them buckle under the pressure.
Aristotle argued that the richest Greek should have no more than five times the wealth of the poorest person. We live in a grotesquely unequal country where five families are worth between them as much as the 12 million poorest Britons combined. Despite a fall in wages and living standards for working people over the last nine years, the pay of top executives has continued to increase beyond all reason
In the 1920s, JP Morgan, the Wall Street banker, limited salaries to 20 times that of junior employees – a similar scheme should be advocated. The first step should be forcing companies to publish their pay gap’s. The winners from such action would be the hundreds of thousands toiling on the still pitiful £7.20 hourly legal minimum.
The gap needs to be closed, but dare I suggest that it will never happen under a Tory government and the longer they remain in power the more inequality will spiral out of control. It is difficult to legislate to force better behaviour from the rich, especially when they are the ones in office – a cultural change is needed.
Jeremy Corbyn deserves praise for bringing such issues and ideas to the table, instigating conversation that has not been common in the public and political sphere for years – people are angry about our broken and unfair country, talking about the problems we face is the first step in addressing them.