By midday on the 4th January, chief execs of Britain’s biggest companies have already earned the average UK yearly wage £28,758.
What it means: The UK’s most valuable companies (i.e. the ones with the highest value shares, which means people have paid the most to own some of it) get put into a list called the FTSE 100. Being a boss of a FTSE 100 company means big bucks: their average salary is £3.45 million a year. That’s £898 an hour, or 120x the average British salary. Lots of people think this is grossly unfair. High salaries have been particularly criticised by parties like the Labour Party and trade unions.
There’s two strands to their criticism. The first is that some people shouldn’t be getting so much money when other people are “suffering the longest pay squeeze since Napoleonic times” and don’t have enough money to pay their bills. The second is that regardless of how well people at the bottom are or aren’t doing, it is simply immoral to have that much gap between what people earn, because there’s not enough difference between the jobs of bosses and the “hardworking people who prop up their business”.
These two feelings about how wealth should be distributed among people in society are related but distinct, and supporters of them often call for different economic policies to achieve them. To give more money to people at the bottom of the income scale, parties like Labour has called for an increase in the minimum wage, from £7.83 an hour (for people over 25) to £10 an hour. To take more money from people in the top pay brackets, it wants to introduce a maximum wage, where company bosses can only earn up to 20x the salary of their lowest-paid employee. (Because the minimum wage is £16,000 a year, that means bosses salaries could go down to £350,000, which is a pay cut of 90 percent).
Of course, plenty of people disagree with these ideas. Some say bosses are paid so well because they have the ideas that make the company successful enough to be able to hire and pay other staff. Others say it’s not for any government to decide what people get paid, and businesses should have the power to pay staff whatever they want.
So how do we get what we need to live? Our livelihoods are our own personal answer to that question, whether it be job in a factory, setting up a start-up, or taking time out to travel. But the economy we live in affects the choices we have in setting up our livelihoods, and we rely on so many other workers around us to be able to do what we do… how do we get the balance right?