Letter from Mark Langabeer, Hastings and Rye Labour member
I recall the Labour Party, during the elections of 1974 , demanding an “irreversible shift in power and wealth towards the working class in the UK”, but precisely the opposite has occurred.
BBC News have a section called Talking Business, in which they reported that the so-called top 500 companies in the USA pay on average, over $16mn to their chief executives. The top three CEOs, the programme stated, ‘earned’ 162mn, $151mn and $112mn. The big daddy of them all, Elon Musk has been awarded by his shareholders the astronomical sum of $56bn, although this appears to have ended up in court and is yet to be finalised.
Although the USA leads the way when it comes to pay and share options for company bosses, Britain and others are following their example. The programme reported that the gap between the bosses earnings and the average worker here has grown hugely in the last 60 years.
In the 1960s , a CEO on average, received 25 times more than the average worker, but by the 1980s this figure had grown to over 40. They reported that this began to accelerate in the 90s so today, this figure has risen to almost 200 times the median pay of the workers.
The programme noted that even the bosses of companies which have seen falls in share value and market share have given their CEOs whopping remuneration packages. They cited Starbucks, Nike and Boeing as prime examples.
The justification for these huge salaries are varied. Talking Business spoke to one CEO who argued that he had “worked his way up” and was “proud” of the pay received by his staff. Elon Musk was also interviewed about the sacking of so many employees at Twitter, but he argued that if he hadn’t sacked them, then all the jobs would have been threatened.
The usual rationale for these huge pay-outs is that they need the ‘best’ staff to run their businesses and their remuneration packages are important in attracting them. Perhaps in a market economy, there is some logic to this idea, but that fails to explain why they have gained so much more relative to workers.
When workers’ living standards improve in real terms, there might be some tolerance towards greedy bosses, but when pay stagnates, or actual falls in real terms, as it is now, workers do not see the greed as so acceptable. The recent rise in trade union militancy on both sides of the pond are a harbinger for the future.
