Big issues in brief
Chances are, you’re being exploited
What you can do about our extreme wealth disparity
Do you earn the Living Wage?
Do you feel like you get paid fairly for the job you do? Does it bother you that some workers face a lifetime of poverty? Most importantly:
Do you agree that everyone who works full-time should get paid enough to live off?
In one year, you’ll earn:
- £14,976 — on minimum wage*
- £28,200 — as an average UK worker†
- £5,480,000 — as a FTSE 100 CEO‡
That’s 194 times difference between an average salary vs. a CEO!
It takes a full-time worker on minimum wage ONE YEAR & ONE DAY to earn what a CEO earns in A SINGLE DAY
So where does the money really go?
The answer is, largely speaking, into the pockets of the fat cats. According to Oxfam, the world’s richest EIGHT PEOPLE own as much wealth as the poorest 50% — that’s 3.6 billion people. The money that fuels this excessive greed doesn’t come from thin air — it is generated by the exploitation of the labour force (as well as natural resources). Most of these workers are low-paid and receive little reward for their pay, whilst the bosses rake in obscene salaries — such as the FTSE 100 CEOs.
“But I thought the minimum wage was a Living Wage?”
The Living Wage Foundation calculates the average amount required to live in the UK each year, based on the cost of living.
The current value is £8.45 per hour, or £9.75 in Greater London, where the cost of living is significantly higher than the rest of the country. Per year, that’s:
£20,280 — Living Wage (Greater London)
£17,576 — Living Wage (rest of UK)
£14,976 — minimum wage
The minimum wage was first introduced by Labour in 1999 at £3.60 per hour, and had risen to £6.50 by the time Conservative chancellor George Osborne announced the so-called “National Living Wage” in 2015.
Although this meant the minimum hourly wage received a welcome and much needed above-inflation boost to £7.20, it was purposely named to mislead people into thinking they would be receiving a fair salary. The term intends to blur the distinction between the minimum wage and the Living Wage.
But those on this minimum wage are earning 15% (£2,600) less than the true Living Wage — or 27% (£5,304) less in Greater London — meaning many can’t pay their rent.
What’s the effect of being paid less than the Living Wage?
This culture of low wages for the masses has led to a huge increase in the use of food banks, with almost 1.2 million food packages provided by Trussell Trust to people in crisis over the last year — a 1,900% increase since the Conservatives have been in government. Over 30% of the UK population now lives in poverty, with over ¼ of food bank referrals due to low income, and another ¼ due to benefit payment delays.
If you care about poverty, workers’ pay & the cost of living crisis, there are two parties you need to boycott at the general election — Conservatives & UKIP
What are politicians doing to reduce exploitation of workers?
Under Conservative plans, the minimum wage was set to rise to £9 by 2020 — only 15 pence more than than the current non-London Living Wage — though the Conservatives included a subversive loophole in their 2017 budget’s small print that could enable them to avoid enforcing this, by linking the minimum wage to average earnings. With the cost of living rising rapidly and wage growth slowing since the EU referendum, this is certainly less than the true Living Wage will be by 2020.
Both the Labour Party and Green Party’s pre-manifesto pledges promise to increase the minimum wage to £10 in 2020 — more than the current London Living Wage and likely in line with the true UK-wide value by 2020. This £10 minimum wage pledge is in line with the recommendation of the Trades Union Congress. Labour is also planning to introduce a 20:1 maximum pay ratio within the public sector, as well as an unspecified limit on bonuses.
In fact, on the topic of wage reform, the Greens are currently stronger than Labour. The party instigated the London Assembly’s Living Wage unit and has previously backed Billy Bragg’s campaign to limit bankers’ bonuses to £25,000 per year, which would be a huge sum for the average worker. They also propose a 10:1 nationwide pay ratio for all organisations— and within their own party, the highest earning employee can earn no more than 3.4 times what an employee with an entry-level position earns.
The Liberal Democrats, Scottish National Party and UKIP have stayed quiet on minimum wage since the 2017 general election was announced. If the Lib Dem and SNP 2015 election manifestos are anything to go by, both parties support maintaining the minimum wage in line with inflation — but that was before Osborne raised it at above the inflation at that time. UKIP referred only to “enforcing” the existing minimum wage before it increased in 2015, with Farage claiming that raising it would lead to an influx of Romanian immigrants. You can make your own judgement on whether UKIP really does represent the working people, as it claims.
Please consider whether you think fair pay is important before casting your vote this June.
Footnotes
* Assuming you’re working 40 hours per week, every week. The rise of zero-hour contracts means over 910,000 workers — many against their preference — can’t find enough work to survive. This is up from under 200,000 in 2011.
† This is the median value (i.e. the middle number if you lined up the salaries of every worker in the UK and picked out the middle one). This number is often used because the huge salaries of the top 10%, 1% or even just the top 0.1% distort the mean value massively. Half of workers are earning below this value. The average top 0.1% of workers each earn over £1m per year.
‡ A FTSE 100 CEO is the chief executive officer of one of the UK’s top 100 companies, in terms of market capital — but rarely in terms of contribution to society. Many of these companies exploit tax loopholes that they have lobbied the government to create, and use offshore tax havens to avoid contributing to the British infrastructure that they rely on for their profits. Between 2010–2016, the tax paid by FTSE 100 companies dropped by almost ¼.
Acknowledgement, Sources & Resources
Thanks very much to James Ivens for interesting discussions on this topic.
• The Equality Trust High Pay Centre • Office for National Statistics • Vox Political
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