Businesses reward high earners with excessive pay...
There is widespread public anger at the size of bankers’ bonuses and the salaries paid to ‘fat cats’.
whilst paying poverty wages to their lowest-paid staff
The Minimum Wage is too low – and does not keep pace with rises in the cost of living, meaning that work is not a route out of poverty for many people.
Pay ratios in the private sector are at record levels
The disparity between top and bottom pay – the ‘pay ratio’ - is also an issue in itself. Bankers and company executives in the FTSE 100 are paid astronomical sums, even when their companies fail and have to be bailed out by the tax-payer. Many private companies pay their directors 100 or 200 times as much as their lowest-paid workers. This is simply unjust, and research shows that companies with a fairer ‘pay ratio’ actually perform better.
We can Close the Pay Gap
- We must shift the public mood so that excessive pay gaps are unacceptable.
A recent government review suggested that there should be a maximum ratio between top and median pay in the public sector: perhaps 10:1 or 20:1. The same could be applied to the private sector. Even just publishing existing pay ratios could have an effect, by embarrassing companies into paying people more fairly.
- We can encourage employers to commit to paying a Living Wage.
Experience shows that paying employees a Living Wage improves performance and reduces sickness and turnover of staff in low-paid jobs: it makes business sense to pay people enough to live on. We recommend a Living Wage of £7.60 an hour, considerably higher than the Minimum Wage. We have persuaded all the UK's major Christian denominations to lead the way by paying all their employees this much.
- This will reduce poverty at source.
We pay the Living Wage and publish our own pay ratio
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