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Good Society > Published by Shamik Das, November 22nd 2011 at 9:49 am

Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality

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Unless the trend towards greater inequality is halted, we may end up back at the levels of disparity “evident in Victorian England”, the High Pay Commission revealed in the publication of its final report this morning.

The report, “Cheques With Balances: why tackling high pay is in the national interest” (pdf), highlights the growing divide between not just the top 1% and the rest but the top 0.1% and the 99.9%.

As Figure 1 below illustrates, on current trends, the top one thousandth of the population will, by 2035, take home 14% of the national income – levels last seen in Victorian England.

Figure 1:

Inequality-in-the-UK-will-soon-look-like-that-seen-in-Victorian-England
To try to correct this, the commission calls for all publicly listed companies to produce a fair pay report, saying the publication of a pay ratio “would allow closer scrutiny of the pay gap in companies”.

The report also calls for the establishment of a permanent body to monitor high pay, which would monitor pay trends; police pay codes; ensure transparency, accountability and fairness; and report annually to the government and public on high pay.

Among the most striking figures in the report are the increases in pay for top executives over the past 30 years, as shown in Table 2 below – even more unacceptable when compared to other professions, where pay has risen nowhere near as much.

As Deborah Hayes, chair of the commission, says:

“The public is rapidly running out of patience with a system that allows those at the top to enrich themselves while everyone else struggles to make ends meet. This has been thrown into stark relief by the economic crisis, but has been building for the past 30 years.

“In 1980 top bosses were well rewarded, but they had not pulled so far away from the rest of society. Since then some of them have enjoyed an increase of over 4,000% to what are now multi-million pound packages.

“Those in respectable middle class jobs such as secondary school teachers and policemen have seen their income rise by a much more modest amount with average wages increasing from £6,474 to just £25,900 over the same period. There have been huge changes in all of these jobs, yet so much wealth has been channelled to those at the very top.

“This is a trend that has led to such a huge rise in inequality over the period that Britain now has a gap between rich and poor that rivals that in some developing nations.”

Table 2:

Increase-in-executive-pay-1980-2009-11
That gap is most starkly illustrated in Figure 3, which shows how much more a FTSE 100 CEO earns than a policeman, teacher, senior civil servant, top-rank soldier, cleaner or nurse…

Figure 3:

Comparison-of-average-pay-in-2010
This state of affairs simply cannot go on; as Mary Riddell writes in today’s Telegraph, democracy iteslf is at stake “unless the huge and growing pay gulf between the very rich and ordinary workers can be narrowed”:

“Politicians, terrified of conceding that they risk losing control, are unlikely to admit that, in one respect, Karl Marx was right.

“Capitalism has been shown to contain the seeds of its destruction. As the Croesus class cash in and the markets dine off democracy, no one dares point out that, from Tottenham to Tennessee, the world may be staring at the end of politics.

“In Greek legend, King Croesus was placed on a pyre to be burnt alive. His pleas for salvation were answered by divine forces who ordained a storm so fierce that the fire was extinguished, sparing him to become a wise, if much less rich, adviser.

“This time round, with the flames licking at democracy’s roots, there may be no such happy ending.”

See also:

• What does responsibility actually mean to those at the top? – Zoe Gannon, June 14th 2011

• Will the government drop bankers’ pay legislation? – Zoe Gannon, November 16th 2010

• Public unaware of just how much those at the very top are paid – Zoe Gannon, November 9th 2010

• Ed Miliband: greater income equality should be an “explicit goal” – Will Straw, July 8th 2010

• GLA leads the way on pay ratios – Malcolm Clark, June 17th 2010

• David Miliband backs High Pay Commission – Will Straw, June 15th 2010

• Time for a High Pay Commission? – Gina Byrne, March 17th 2010

  • http://twitter.com/yourthurrock/status/138916832039014400 YourThurrock

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/GDkfxIOR by @ShamikDas #

  • http://twitter.com/realdavidcarter/status/138916953829023744 David Carter

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/adreamofhoney/status/138916975148670977 -

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/june4th/status/138917488581804032 Noxi

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/fddKIoPd by @shamikdas…

  • http://twitter.com/newfuturesrec/status/138917508987092992 New Futures Rec

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/gill0329/status/138917610443124736 Gillian Mawson

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/fddKIoPd by @shamikdas…

  • http://twitter.com/laughingnoam/status/138917861648375808 Just Say Noam

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/fddKIoPd by @shamikdas…

  • http://twitter.com/joelock85/status/138918329728503809 Joe Lock

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/ljrm1/status/138918472330645504 L

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/jamieacooke/status/138918578891141120 Jamie Cooke

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/lynnhancock/status/138920604349890560 Lynn Hancock

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality http://t.co/1tTG9Kgk

  • http://twitter.com/redvark/status/138920889688399872 Richard Hardy

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/creativecrip/status/138921363460210688 TheCreativeCrip

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/fdcox/status/138921565034254336 Francis Cox

    RT An explosive situation @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality http://t.co/pg9dDvx2

  • http://twitter.com/therightarticle/status/138924324936622080 Michael

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality l Shamik Das – http://t.co/9YUAeYD8

  • http://twitter.com/bevclack/status/138925288066252800 Beverley Clack

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality l Shamik Das – http://t.co/9YUAeYD8

  • http://twitter.com/neilovichi/status/138925385785159680 Neil Partridge

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/andy_s_64/status/138925394748383233 Andy S

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality l Shamik Das – http://t.co/9YUAeYD8

  • http://twitter.com/libdemdaisy/status/138927056208658432 Daisy Cooper

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/lizixer/status/138927539400867841 Liz Ixer

    RT @TheRightArticle Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality http://t.co/PmdQ786t

  • http://twitter.com/oisinlunny/status/138928172271013889 Oisin Lunny

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/poOgcTSR (@leftfootfwd)

  • http://twitter.com/politicalplanet/status/138929492797304833 Political Planet

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: Unless the trend towards greater … http://t.co/kcIxte0s

  • http://twitter.com/innamood/status/138929981656018944 Kelly

    #occupyLondon @TheRightArticle: Unless pay gaps are reduced we’ll end up with Victorian levels of inequality Shamik Das http://t.co/UvBLCuKq

  • http://twitter.com/macinpoole/status/138931174897745921 malcolm

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/glendajacksonmp/status/138931599155798017 Glenda Jackson

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • Simon Landau

    But note how the High Pay Commission have dropped the proposal for a 20:1 ratio (as have government in relation to public pay). Why is there such a lack of ambition in public policy ? Japan handles a 30:1 ratio in its equivalent companies.

  • http://twitter.com/weldonwk/status/138932874601701377 weldon kennedy

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality http://t.co/diD0POql

  • http://twitter.com/randbmanthinks/status/138933511703887872 R and Bman Thinks

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/fddKIoPd by @shamikdas…

  • http://www.leftfootforward.org/2011/11/scottish-union-says-government-behaving-like-a-victorian-millowner/ Scottish union chief accuses government of behaving like a “Victorian millowner” | Left Foot Forward

    [...] also: • Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd [...]

  • http://twitter.com/emjrabbitwolf/status/138936413050765312 em-j rabbitwolf

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/top_trend_uk/status/138937209880444929 Top Trending UK

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/havantacluotmp/status/138957159626055682 Jeni Parsons

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality http://t.co/C8fBbiPv #otmp #occupylondon

  • http://twitter.com/joelhcarter/status/138959518443900929 Joel Carter

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/cuchulaindundee/status/138962046128635904 Alan Cowan

    Comment on Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality by Top Trending UK http://t.co/2qqzjzcJ

  • http://www.leftfootforward.org/2011/11/workers-are-children-and-if-you-dont-like-high-pay-move-to-cuba/ ‘Workers are children, and if you don’t like high pay, move to Cuba’ | Left Foot Forward

    [...] Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd [...]

  • http://twitter.com/anthonybinder/status/138972920193101824 Anthony Binder

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality http://t.co/jy3dkThs

  • http://twitter.com/maznbaz23/status/139055202127978496 Marilyn Freeman

    Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality: http://t.co/UhbaqQqv by @ShamikDas #HighPayCommission

  • http://twitter.com/badgers_rebel/status/139112562053750787 Bristling Badger

    RT @leftfootfwd: Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality http://t.co/ZSCuN9lo | #WiUnion #Occupy #OWS

  • http://www.leftfootforward.org/2011/11/pay-increases-by-just-2-3-per-cent-in-the-last-three-months/ Pay increases by just 2.3 per cent in the last three months | Left Foot Forward

    [...] also: • Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd [...]

  • http://twitter.com/robertcp/status/139849438939201536 Robert CP

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/c_a_jonestechno/status/139849889847844865 CAROLE JONES

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/rbhuhi/status/139849973536796672 Rajinder Bhuhi

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/pissedprole/status/139849982625857536 Pissed Proletariat

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/pieman70/status/139850170228670464 Murray Christison

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/screaminkid/status/139850872371953664 screamin’kid

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/labour52rose/status/139851775401410560 Alex Braithwaite

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/friendsofderek/status/139852818763890688 Derek Dunnington

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/themingford/status/139863784293539840 Thomas Hemingford

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/sharpcoupe/status/139863876983463937 Dave Sharp

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/tooldtoroknroll/status/139982845715296257 David Irvine

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/gion_gion/status/140031804487892992 Gion Gion

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/creativecrip/status/140034538066812928 TheCreativeCrip

    And here's a reminder of those shocking figures on runaway executive pay frm the #HighPayCommission: http://t.co/p3AlXmEz #bbcqt

  • http://twitter.com/sirenofbrixton/status/140037057522319361 Siren of Brixton

    Shocking figures on runaway executive pay via @leftfootfwd http://t.co/MyPLGLaD This is where neoliberal economic policies got us

  • http://www.leftfootforward.org/2011/11/look-left-25-11-11/ Look Left – Workers prepare to fight slasher Osborne | Left Foot Forward

    [...] report, “Cheques With Balances: why tackling high pay is in the national interest” (pdf), highlights [...]

  • http://www.leftfootforward.org/2011/11/new-video-from-the-fair-pay-network-makes-the-case-for-a-living-wage/ New video from the fair pay network makes the case for a living wage | Left Foot Forward

    [...] brink of a double-dip recession, we know that it will be the poorest who are hurt the most. Despite soaraway salaries at the top of society, many who are in work still face poverty. The Fair Pay Network has released [...]

  • http://www.leftfootforward.org/2011/12/ids-gets-that-responsibility-runs-from-bottom-to-top-why-doesnt-schools-minister/ Gibb’s “got to have it now” concerns ignore the problem of city greed | Left Foot Forward

    [...] also: • Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd [...]

  • http://www.leftfootforward.org/2012/01/three-things-cameron-should-do-if-hes-serious-about-high-pay/ Three things Cameron should do if he’s serious about high pay | Left Foot Forward

    [...] Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd [...]

  • http://www.leftfootforward.org/2012/01/inequality-must-be-ended-to-prevent-another-financial-crisis/ Inequality must be ended to prevent another financial crisis | Left Foot Forward

    [...] Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd [...]

  • http://www.leftfootforward.org/2012/01/when-the-private-sector-collapses-for-a-second-time/ When the private sector collapses for a second time | Left Foot Forward

    [...] Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd [...]