According to research examining the significant wage disparities between top executives of major British companies and the average worker in the UK, these CEOs will have already earned more money by Thursday lunchtime in 2024 than the average worker will make in an entire year. This comes at a time of widespread strike action and a growing struggle to afford basic expenses.
According to data from the High Pay Centre, an organization advocating for equitable wages, a chief executive in the FTSE 100 will have earned more per hour than the average annual salary of a UK worker (£34,963) by 1pm on the third workday of the year. This is based on median remuneration for both groups.
Paul Nowak, the general secretary of the TUC, the umbrella body for UK trade unions, said: “While working people have been forced to suffer the longest wage squeeze in modern history, City bosses have been allowed to pocket bumper rises and bankers have been given unlimited bonuses.”
According to Nowak, politicians are at fault for the growing disparity in pay between bosses and workers. He believes that the Conservative party is responsible for allowing this issue to persist and escalate, contributing to an unacceptable level of inequality. He argues that this does not have to be the case and that we should strive for an economy that values hard work over accumulated wealth.
This involves appointing employees to company boards to bring practical thinking into board meetings. It also involves implementing fair taxes on wealth. Lastly, it means having a government that collaborates with unions and employers to improve the overall quality of living for everyone.
The median salary for CEOs has risen by 9.5% since March 2023, while the median salary for workers has increased by 6%. Although the average pay for FTSE 100 CEOs decreased during the pandemic, it has now risen by approximately 25%.
A group of City officials are advocating for British CEOs to receive significant raises in order to match the salaries of American company leaders. Legal & General Investment Management, a major UK pension and insurance company, recently suggested allowing for more flexibility in compensation to attract top talent, with pay structures similar to those seen in the US.
The High Pay Centre also determined the amount of time it would take for higher-earning individuals to exceed the full-time earnings of the average UK worker.
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Executives who are part of the FTSE 350 group (consisting of CEOs from FTSE 100 companies who are not the CEO themselves, as well as CEOs and other executives from FTSE 250 companies) make an average salary of £1.3m. This means they would only have to work until January 10th to surpass the annual earnings of the average worker.
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Partners at so-called “magic circle” law firms earn an average of £1.9m, so would need to work until 8 January to do the same.
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The average salary for partners at the top four accounting firms is £870,000, which means they would have to work until January 16th.
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The average salary for top bankers, known as “material risk takers,” at the UK’s five largest banks is £807,000. They will also surpass the earnings of average workers by 16 January.
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The individuals in the highest 1% of UK full-time earners make a minimum of £145,000 and will surpass the average median full-time worker by March 29.
The government eliminated a regulation from the EU that limited bankers’ bonuses to 100% of their salary. This rule was implemented in 2014 to prevent future banking crises.
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The High Pay Centre’s director, Luke Hildyard, stated that in 2023, lobbyists representing large corporations and the financial sector argued that high-earning individuals in the UK are not adequately compensated and that there is excessive focus on income disparities between the extremely wealthy and the general population. These lobbyists believe that a small group of individuals at the top are solely responsible for economic success and that the rest of society has minimal impact.
When elected officials pay attention to these misguided opinions, it’s not surprising that we see significant inequality and stagnant quality of life for most people.
Laurence Turner, the head of research and policy at the GMB union, stated that the increasing disparity in pay among employees is detrimental to both businesses and the economy.
Rather than funneling profits to the wealthy, we should strive for a sustainable economic rebound that puts more money in the hands of working individuals.
Source: theguardian.com
