Before the last of the New Year fireworks have even faded from the sky, it’s already time for the more dubious celebrations of Fat Cat Day. According to the High Pay Centre, today (6 January) at 5pm, CEOs of the FTSE 100 companies will have earned as much as the average worker earns in an entire year. This means that these bosses earn as much as 117 times as the average worker, who takes home a median salary of just under £30,000.
This level of eye watering inequality is as unsustainable as it is unfair. We need to slim these cats down and make sure everyone gets a bit more of what they’ve been gobbling up for themselves.
To even call this phenomenon ‘Fat Cat Day’ is beginning to verge on the ridiculous. ‘Fat cat’ conjures up images of a charming chancer who gets a little bit more of his fair share of the cream. That metaphor does not do this situation any justice. If these CEOs are cats, they are grotesque, furry supernovas sucking up everything in sight, knees buckling under the ballooning weight of their own unquenchable greed.
Members of the establishment will point to the fact that CEO wages have fallen over the last couple of years as a sign of progress. Do not be fooled. While it is true that top earnings have fallen from a peak of £3.9 million to a slightly lower level, the material difference is that they now need to work until 5pm today to make the median annual income, rather than simply to lunchtime. They still earn the equivalent of over £900 an hour.
Through the other end of the telescope, we know what life is like for Britain’s lowest earners: 14 million people living in poverty, leading the UN to find the UK in breach of human rights legislation. When people at the top take this much, others go without. It’s that simple.
What is to be done? The Green Party has a solution that would end this rank inequality for good: a pay ratio of 1:10 from the lowest to highest paid in a company. This would mean that the CEO of a company would be prohibited by law from earning more than ten times the amount of the lowest paid member of staff in the company.
If you pay your floor staff £20,000, you can only earn up to £200,000 a CEO. If you want to pay yourself a million, that’s fine. But you’ll have to pay all staff a minimum of £100,000 from your cleaners to your warehouse staff. It’s a solution that reduces inequality in one fell swoop without having to introduce caps on the salaries of top earners.
Thanks to a change in the Companies Act, this is the first year in which it is law for companies to publish their pay ratios, and there’s going to be a lot of executives with a bit of sweat under the collar for the first time in their working lives. Later in the year, we’ll see a slew of annual reports in which these men (and they are mainly men) are forced to justify their earnings relative to the workers who actually make the company profitable.
Such people tend to genuinely believe themselves to be deserving of up to 117 times more than their colleagues, and they’ll come up with all sorts of weird and wonderful excuses in order to justify this obvious injustice. But for the ordinary person, the emperor’s new clothes will finally be laid bare, the myth of the working class boy done good will be shattered and a call for political action will be at the top of the agenda.
There is a simple action which we must take. A 10:1 pay ratio can be implemented with immediate effect, and it would make a decisive impact on inequality in the UK, curbing the greed of those recklessly overconsuming while pulling ordinary people out of poverty. We all know that our boss doesn’t deserve £900 an hour while we do all the work. Now it’s time for us to take the cream back from those fat cats and share it more fairly among everyone.