Time for a living wage
Matthew works for responsible investment campaigning group Fairpensions
The Sunday Times Rich List is strangely addictive. The longer you look at it the more active your imagination becomes. What would I buy with Lakshmi Mittals billions? How many penny sweets would the Duke of Westminster’s seven thousand million pounds buy? It’s almost impossible for any ordinary person to imagine life with the vast amounts of money that these people own. The proportion of our nation’s income earned by the top 0.1% is set to rise to 14% by 2030. Similarly the lives and wealth of the people who run Britain’s biggest companies is set to become increasingly separated from ours. By 2020 the ratio between executive pay and national median wage is set to be 214:1.
At almost every AGM that FairPensions staff attend we hear executives defend the huge sums that they are paid. It’s a competitive world, we are told, and companies must provide competitive remuneration to their hard working staff. Lloyds, which is nearly half owned by the British taxpayer, is set to pay their new CEO up to £10 million this year. The pay packets of executives are particularly highlighted by the fact that the vast majority of them employ people who earn significantly less in a year then they do in a week.
Britain is very good at being angry about high pay. The Daily Mail are happy to channel their rage towards ‘Fat Cats’ and Guardianistas are more than happy to moan about the excesses of the rich at the breakfast table. We are less good, however, at focussing our anger at the fact that millions of people languish on low wages. These are the people who clean our offices and universities, who serve us in shops and who provide essential services to the corporations upon whom many in Britain rely. FairPensions are demanding that Britain’s biggest companies pay their staff and on site contracted workers Living Wages.
Some companies, such as Standard Life, have responded to FairPensions’ Living campaign with enthusiasm but the unfortunate fact is that many CEOs, who have very little notion of what life on £5.93 an hour is like, are not taking working poverty seriously as an issue that affects their staff. With increasing amounts of people being forced to accept pay packets which do not rise in line with the cost of living, the timeliness of a national Living Wage campaign could not be more distinct.
In Britain many people who survive on low wages have their incomes ‘boosted’ through government tax credits. These tax credits are, in principal, a good idea. People should generally be encouraged to work but should not be forced to work for wages which offer them no financial advantages to unemployment. One problem with tax credits however is that they act as a subsidy, extracted from the pockets of British Taxpayers, which enable corporations to continue to pay their workers poverty wages. Tax credits must remain to protect those on the lowest wages but the time has surely come for corporations, who continue to make millions and even billions of pounds in profits, to pay their workers high enough wages so that they don’t rely on what are effectively government subsidies.
If the Sunday Times published a ‘Poor List’ it would feature over 3.5 million working people whose share of the nation’s wealth is getting smaller. Our consternation at the huge amounts of wealth floating around in Britain must be channelled into pressing for the lowest paid workers in this country to be paid Living Wages.
Take action and ask your bank to pay their workers living wages: www.activateyourmoney.org