Minimum wage would be £26,000 if rate matched executive pay rises

[Hydrogen]

GMB union highlights huge gap as top earnings soar ahead of worst paid workers’ wages

The disparity in pay between those at the top and bottom of the earnings ladder is revealed by analysis showing the national minimum wage would be £5.24 an hour higher if it had risen at the same rate as a FTSE 100 chief executive’s pay over the last two decades.

With 2018 marking the 20th anniversary of legislation that heralded the minimum wage, research by the GMB union underscores by just how much the statutory pay floor has failed to keep pace with executive earnings.

It shows that if increases in the national minimum wage had kept pace with a chief executive it would be £12.74 an hour compared with £7.50 now for those 25 years and older. For a worker aged over 25 on 40 hours per week this would equate to £26,000 a year compared with the £14,664 they are currently paid.

The disclosure will intensify the debate about the yawning gap between the best and worst paid. Analysis published last week by the Vlerick Business School, based on 2016 data, found that chief executives of FTSE 100 companies receive on average 94 times more than the average employee. The average FTSE 100 company chief saw an 11% rise in their median total pay between 2015 and 2016.

Calculations by the High Pay Centre confirm that the average FTSE 100 chief is now paid £4.35m a year – compared with £1.23m when the national minimum wage came in – an increase of 354%.

“The national minimum wage was a hugely important step for working people in this country and its anniversary should be a cause for celebration of how far we’ve come,” said Tim Roache, GMB general secretary. “But this 20th birthday risks being marred by the growing pay gap between workers and company bosses.”

Every year the High Pay Centre highlights “fat cat day” when the average FTSE 100 chief executive will have already been paid the same as the average UK worker earns in a whole year. In 2018 the day falls on 4 January.

Stefan Stern, director of the High Pay Centre, said: “It’s striking that the national minimum wage came in just as executive pay really started to spiral up and out of control. The pay gap has grown ever since, with terrible consequences. There are two ways to close this unacceptable and unjustifiable gap: one is to have more restraint at the top, and the other is to have the long overdue pay rise that lower paid workers deserve. We need rapid progress at both ends of the income scale.”

https://www.theguardian.com/society/2017/dec/31/minimum-wage-26000-pounds-if-rises-matched-executive-pay

It has been a long time since I've seen an article like this published. Good content on the wage gap, wealth and wage inequality, class warfare and similar topics is definitely hard to come by. There isn't much good information available on poverty. Discussion on how to best address economic and financial issues which affect lowest income earners is something that seems to have fallen by the wayside. Best methods for elevating living standards or cutting the average working day. I never see anyone discussing these things. Topics which perhaps should be at the forefront of our thoughts as the average working day grows ever longer. This precedent is compounded by wages shrinking and living expenses rising dramatically. Yet seldom a word.

[jmlona]

£26,000 is really about the minimum anyone should earn in my opinion, in order to be able to lead a good life and not be severely restricted in what they do. £26,000 isn't an amount that would allow anyone to live exuberantly. Minimum wage won't ever rise in line with executives pay unfortunately, it will always lag behind and the disparity will only continue to increase. It's a shame that a country as great as the UK has such an issue with these things.

With Brexit this is an opportunity for the UK to become a country more similar to those of the Scandinavian countries and Switzerland where standard of living and such are much higher. Let's wait and see how that unfolds but I'm not optimistic. As a people in the UK we are too driven by self greed and struggle when it comes to empathy.

[rlim475]

While the minimum wage debate is a logical one and one where my opinion definitely falls on the side of the current minimum wage not being enough. I have to say that contrasting it with executive pay rises isn't an entirely fair comparison, certainly however the disparity in growth should not be nearly as much as it is.

The minimum wage is such an interesting concept from an economic point of view due to the influence it has on many other things. Increasing the minimum wage often in turn leads to inflation and a reduction in unemployment so it is a very delicate balance. One thing we can say for sure is that people working a full 40 hour work week should not be finding themselves having to live in relative poverty. There are so many stories lately of these people needing to use food banks and such and it's really a sad state of affairs.

[stompix]

Till a few years ago Germany had no minimum wage enforced by law.

And yet in 50 years Germany has become the biggest economic power in Europe, has returned from rubble and was a destination for decades for eastern Europeans, because there were jobs available. In France....there is unemployment.

Enforce a 26k minimum wage and you will just end with more people struggling to make a living.
Companies will migrate to other countries, robots will take the place of a lot of people and you're going to end up with higher unemployment, lower income from taxes, negative commercial balances and more money to print since your country isn't making any.

Oh, and if you're going to say that robots need people for maintenance too, those that would work on that will not be paid the minimum wage anyway;).