Take the bankers' wealth!

Submitted by Matthew on 22 January, 2014 - 10:54

Just 85 of the world’s richest people have as much wealth as the 3.5 billion people in the poorer half of the world’s population.

Within Britain inequality is not quite as wide as that world-scale gap calculated by Oxfam. But inequality is huge even within Britain. It has been rising ever since the Thatcher days. And the Government is using the economic crisis as a lever to increase it further.

Under pressure on the issue, chancellor George Osborne has recommended to the Low Pay Commission that the minimum wage be raised by a grand 69p per hour, from £6.31 to £7, from October 2014. (For over-21s, that is: the minimum rate is much lower for younger workers).

Osborne claims that this will restore the real value of the minimum wage to what it was when the Government took office. Even that claim is deceptive.

Osborne’s welfare cuts cost the average household £760 a year. Most of that cost is levied on lower-paid working households. Even if the minimum wage is raised to £7, with the benefit cuts taken into account minimum-wage workers will still be worse off.

The £7 rate is much below the widely-recognised Living Wage rate, now £8.80 an hour in London and £7.65 outside, and due to be increased in November.

At the same time rich bankers are griping and moaning about a European Union ruling which limits their annual bonuses — mostly paid in February and March — to 200% of annual pay (or 100% if they don’t get specific permission from shareholders).

The low-paid worker is supposed to be grateful for a 69p per hour rise, more than cancelled out by benefit cuts. There are in Britain more than three times as many bankers paid over one million euros (£820,000) a year in “wages” than there are in the rest of the EU combined. Those rich bankers reckon it is an outrage that their bonus can’’t be more than twice their inflated “wage”.

In 2013 the banks paid out £14 billion in bonuses. They also had to pay out large amounts in compensation for pretty much defrauding their customers by selling worthless “payment protection insurance” and “interest rate hedging” schemes. No top banker lost his or her job for the dodgy mis-selling.

The banks still reported £16.5 billion in profits in the first half of 2013. Most of that they owe to the help they had from the bail-outs in 2008 and the help they have had since from the Bank of England lending them money at extra-low rates.

So devastating was the crash of 2008 that the banks today are still not quite as extra-profitable compared to the rest of capitalist business as they were before the crash. Yet still much of the economy acts as a vast pump, squeezing profits out of workers forced to labour at minimal wages, and directing the best of the flow to the pockets of financiers. Money is everything in this capitalist economy, and money keeps flowing to where there are already the largest, deepest pools of it.

Ed Miliband says he wants to curb the biggest banks. We need something altogether more drastic. The banks and finance industry should be taken into public ownership and run as a public service under democratic control.

Their vast funds should be squeezed out of them and democratically redirected to creating useful jobs for all, with good conditions and paid a living wage.

Financial inequality corrodes, rots, and demoralises. The fight back, for equality, inspires and regenerates.

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