It seems to This Writer that Jeremy Corbyn has struck a nerve, here.
All he had to do was mention the possibility that Labour might introduce rules limiting executive pay in relation to that of the lowest-paid employee and a storm of protest arose – from the high-paid, the privileged, and the ‘entitled’.
“It’s a strange country indeed where the fact that top bosses earn more in two and half days than most people earn all year causes less outrage than a proposal to limit pay at the top. I suggest looking more closely at who was causing the uproar,” he wrote, echoing my own words.
He pointed out that claims that everybody benefits when the rich get richer are nonsense: “The wealth isn’t trickling down, it’s flooding up”.
Higher pay rates mean CEO’s are causing instability by leaving after only short tenures: “They are cashing in rather than aiding the long-term growth of the company.”
There is no point in ‘naming and shaming’ companies whose bosses take huge salaries and incentives while employees have to claim in-work benefits to survive, because: “You can’t shame the shameless.”
Publication of Directors’ pay was originally intended to shame companies into restraining pay, but has had the opposite effect, encouraging companies to compete with each other on pay. And those that might want to act find they can’t – because they would be paying less than the going rate, attracting nobody.
So it is the duty of government to act in the name of the majority.
Perhaps the only serious criticism of the plan to limit firstly the pay of private companies carrying out contracted-out work for the government, so that bosses earn a maximum of 20 times their lowest-paid employees, is that the traditional way of rebalancing inequality is via tax.
Why can’t taxation be used to address the issue, as Joseph Harker asked in The Guardian?
The simple answer is that it can – but not on its own.
If rich executives were taxed extra, solely to fund in-work benefits for the poor, they would bitch like hell that their money was being stolen and given away as handouts for the undeserving.
It would be a lie, but it’s one they like to use.
The Tories also like to claim that the higher-paid would simply find ways to avoid paying tax if the rate was higher than it is now – which is why they have been merrily cutting back the amount that they and their rich friends contribute.
No – pay needs to be re-balanced so that working people receive the amount they deserve.
Has anybody ever explained what company executives do that is so deserving of – what is it now? – 180 times as much remuneration as the people who actually generate their firm’s profits? Anyone?
Taxation is appropriate, as Mr Lewis writes – but only in conjunction with fair pay ratios. A higher tax rate for people earning obscene amounts could only be seen as fair if it is combined with tax breaks for firms that offer fair pay. It has been suggested that such businesses could even be rewarded with a British Standards ‘kite mark’.
So the idea of a maximum pay level, set at a certain multiple of minimum pay at any given firm, is sound.
Suspicion should not be heaped on Jeremy Corbyn, Clive Lewis and Labour for suggesting it.
It is not an unrealistic idea, as many have claimed – in fact several other countries have already implemented it, but your bosses probably didn’t want you to know that. Take a look at this Skwawkbox article for details.
Instead, let us place blame for the current situation where it is due – on the corporate mouthpieces who try to suppress any action that may hinder their rampant, naked greed.
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