A CEO takes home more in three days than one of his employees can earn in a whole year. Huge pay gaps in the UK lead to rising inequality, but it doesn’t have to be like this…
Pay for those at the top of our businesses has continued to rise sharply year after year, throughout the recession and recovery. When a chief executive’s package can nearly double in ten years while average wages show no real-terms increase, we need to question our priorities.
As the UK economy has strengthened this year, workforce wages overtook price increases for the first time in six years, but this was only by 0.1%. No-one is going to get rich on that. Many people on low to middle incomes are still feeling the squeeze in their spending power.
For those at the bottom of the wage scale in insecure, low-paid work, it gets harder to cope with rising bills. The increase in the numbers resorting to food banks is something a civilised society should be ashamed of.
The highest earners in the top 1% of incomes are doing very well and getting richer. Thomas Piketty’s new book Capital in the 21st century, points out that a big difference between now and periods of huge inequality in the past is the number of executives in the top 1% of the income scale. He calls them “super-managers.”
It is only in recent history that people have been able to become seriously rich by climbing the executive ladder in large, established companies.
When the lion’s share of reward is going to a few at the very top of society, we are stifling spending power among the rest. That is going to hold back our economy and create large divisions in society.
We need to address the pay gap for all our sakes. In the next few months, the High Pay Centre will be developing policy ideas to help tackle the pay gap. Help us to convince politicians and businesses to address the issue.