According to the Financial Times (13 February), even big business people are starting to think that top-manager pay has gone over the top. Don’t expect anything too socialistic, but “long-term incentive plans” are being looked at more sourly, as research results heap up to show that the “incentives” have little correlation with business success.
The FT reports that top bosses now get an average of £4.3 million a year.
“The pay ratio of the average blue-chip chief executive to the average worker, about 140 times in the UK, has escalated from about 33 times in 1984... Pay growth in the US has been even more extreme. A report last spring by the AFL-CIO union... calculated a multiple of 335 times.
“Two decades ago it was below 50”.
The most unequal ever
Probably for the first time since extended families ceased to be the norm, retired people are now better-off, on average and after housing costs, than working-age people.
“Having been £70 a week lower than typical working-age incomes in 2001-02, typical pensioner households now have incomes that are £20 a week higher than their working-age counterparts”, reports the Resolution Foundation. A sizeable minority of pensioners are on good pensions (from schemes now closed down or cut back), and have paid off their mortgages, while wages have stagnated and rents have soared.
The report also finds that the generations born 1966-80 and 1981-2000 are (by income after housing costs) the most unequal since figures can be calculated, back to and including those born 1881-1895. The baby-boomer generation, born 1946-65, matches that inequality-by-income peak for its late-50s cohort. Inequality among its pensioners is lower, but still high, despite the relative boost in average pensioner incomes.