Have your wages stayed the same for months, years even? Chances are, yes – unless you work in a leadership position at an extremely profitable business.
Unsurprisingly, the pay gap between those leading UK companies and ordinary workers is widening again. And yet, some higher-ups think we’ve got our priorities wrong for calling out this wealth inequality.
Earlier in the week, Emily Fielder, head of communications at the free market think tank, the Adam Smith Institute, told the Telegraph while “fretting about CEO pay might make for a good headline, getting involved would do little to increase workers’ wages and benefits to shareholders.”
She added: “The UK should be adopting policies which will get the economy growing again, rather than undertaking a PR exercise in the politics of envy.”
That old chestnut. The “politics of envy” has been bandied about as a phrase for years now, not least in headlines.
In 2019: “The next Tory PM must confront the politics of envy.” In 2017: “Labour is cultivating the politics of envy with its manifesto.” And back in 2011: “The politics of envy will destroy the City of London.”
The City seems to be doing just fine, as it happens. And while the pandemic narrowed the distance between what FTSE bosses and the rest of the workforce earn, it’s growing again, with the gap expected to widen for the rest of 2022.
The High Pay Centre, another think thank that researches this area, said pay ratios were widest in retail and lowest in media and financial services.
Across the 69 companies that disclosed pay ratios in the first quarter of 2022, the median ratio between CEO and employee was nearly double what it was for the same group of companies in 2021.
According to the High Pay Centre’s latest analysis of chief executive pay, the average FTSE 100 boss was paid £2.69m in 2020.
While that figure was 86 times the pay of the average full-time UK worker, it marked actually a 17% drop from £3.25m in 2019 (in the US, the gap between CEOs and workers was a mammoth 351 times higher for certain companies based on 2020 data).
Given this pay disparity persists amid the worst cost of living crisis this country has seen for decades, Fielder’s comments on the ‘politics of envy’ seem particularly egregious.
And to the people whose wages have stagnated, it’s painful to hear. They aren’t “envious” of the obscene amount of money their bosses earn, they just want better conditions and pay that reflects their hard work.
Yusuf*, who works for a retail company that pocketed more than £500m during the first pandemic year (down from even more astronomical figures), was earning below average at the time. But the owners of the company have just made the Sunday Times Rich List 2022.
The Londoner, 34, saw his bosses and CEOs line their pockets while he took in £25,000 a year (after initially starting on £21,000). This despite working late nights, early mornings, and weekends.
He tells HuffPost UK: “It’s ironic that the company talked about career growth and mental wellbeing. Yet, our salaries didn’t reflect that, neither did communications with higher-ups, I didn’t feel supported or valued despite working beyond my remit and contractual hours.
“Our team undertook a great deal of work and the new management thought that buying a couple of lucky dip lottery tickets for us sufficed as a reward – this was our Christmas present. At the next team meeting, [our boss] boasted how much he had changed the department – it was our hard work that did this.
“Places like this are toxic.”
After four years of this, Yusuf left his job, and not because he didn’t like the work he did. He simply wanted better pay and more respect.
Many workers are in the same boat as Yusuf. And they are being especially tested right now, according to the High Pay Centre, making the “politics of envy” commentary more harmful, it says.
“The argument put forward by the Adam Smith Institute is damaging,” an HPC spokesperson tells HuffPost UK. “It suggests our critique of these pay gaps is based on envy, rather than our actual view, which is that pay distribution is not proportionate to the contribution different employees bring to a company’s success, and based on a false notion that there is a very small number of exceptional people who would be capable of leading a company.”
It also ignores the fact that paying workers higher wages is beneficial to the companies, too, the High Pay Centre suggests.
“Paying those on low and middle incomes more would likely have a positive impact on economic growth, as these demographics spend a far higher proportion of their incomes in the real economy, whereas those on exceptionally high incomes are more likely to hoard their wealth rather than spend it.”
With inflation, Brexit, the Ukraine-Russia war, and the pandemic raging on, many UK workers are in a precarious situation. Tone-deaf statements not only ignore their plight, but side-step the real issue. Workers don’t want a piece of the exploitative pie, they just want fair pay and conditions.
*Name changed to offer anonymity.