GOING back to work after the festive break is often a tough time for many people, especially if you’ve had a week or two off to enjoy the Christmas and New Year celebrations. Just as you’ve got used to being about the house, bumping into your family more often than normal and even getting a few long lie-ins, the thought of returning to work usually dulls the last day or two of your break.
To make matters worse, a report revealed that just as most Scots were returning to work on Wednesday, January 4, the top bosses in the UK will already have earned more money by lunchtime that day than the typical worker will earn all year.
That is according to the High Pay Centre, an independent non-party think tank which was established to monitor pay at the top of the income distribution and set out a road map towards better business and economic success.
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It issued a press release referring to January 4 as Fat Cat Wednesday. Some of the figures released by the High Pay Centre are shocking: lAfter just two-and-a-half days, Britain’s top bosses will have made more money than the average UK worker earns in an entire year (£28,200).
- The average pay ratio between FTSE 100 CEOs and the average total pay of their employees in 2015 was 129:1.
- Median FTSE 100 CEO pay in 2015 was £3.973 million. Even if CEOs are assumed to work long hours with very few holidays, this is equivalent to a rate of pay of over £1,000 an hour. The “national living wage”, which in reality is actually only a risen minimum wage, for over 25s is £7.20 an hour.
High Pay Centre director Stefan Stern said: “Our new year calculation is not designed to make the return to work harder than it already is.
“But ‘Fat Cat Wednesday’ is an important reminder of the continuing problem of the unfair pay gap in the UK.”
Recent research from Lancaster University Management School has revealed the link between pay and performance has in fact been “negligible”.
The problem is that these bosses are effectively awarding themselves excessive pay and benefits. This will only get worse as the Tories have watered down their proposals to have union representatives on the boards of companies.
This could have been one option to allow greater scrutiny of the benefits that bosses award themselves (but not their employees) and could have led to a more open and honest discussion as to whether these bosses are worth the money they receive.
The problem of executives’ pay isn’t only restricted to private businesses. There is a concern that the ever-widening gap between bosses and employees’ salaries is also happening in the public sector, such as universities and other public bodies.
A reality check is needed here. How can the rest of society be expected to continue to suffer from the Tory obsession with austerity when it is quite clear that the “fat cats” are exempt from such pressures?
In contrast, research from Shelter Scotland highlighted that a £50-a-month increase in rent or mortgage payments would result in four out of 10 Scots struggling to keep a roof over their heads. The same research also showed that 20 per cent would face financial difficulties if their housing costs rose by £25 or less per month.
With higher inflation predicted along with uncertainty over employment and even harsher welfare reforms planned for this year, 2017 may not be a good year for a significant number of people.
We are living in a very divided country. While most people are looking on with apprehension about continuing Tory cuts, the impact of Brexit, the future of their jobs and how this will impact on being able to keep a roof over their heads, the richest bosses in the UK see their pay rising ever faster, widening the gap between them and their employees. They won’t have any concerns about keeping their homes together if prices or housing costs rise by £50 per month (or less). They are living in a bubble, shielded by Tory policies designed to keep them rich while keeping the rest of us in constant fear of losing our homes.
Under the continued dogma of austerity, the Tories continue to split the country in two, rewarding the already-rich with more tax breaks and less scrutiny on their earnings, while slashing funds for public services including benefits and pensions. This is not an economic decision, but a political one.
If the Prime Minister was being honest when she said: “We will make Britain a country that works not for a privileged few, but for every one of us”, then it’s about time she tackled executive pay.
While so many people struggle to get by, mainly due to Tory policies, then the Prime Minister needs to ensure that everyone is paying their share to our public services. The fact is it is the most vulnerable who need the most help, not the richest.