Inequality keeps spiralling

At 1pm on 4 January, CEOs of the FTSE 100 top firms had already pocketed more than the middling (median) UK wage for the whole year.

According to the High Pay Centre those CEOs are now on an average of £3.81 million a year, and their year-on-year rise at 9.5%, while the middling wage has gone up 6%.

Broadening out to bosses at smaller firms, and near-top managers at big firms, the top 1% of UK full-timers are on £145,000 or upwards, and will have overtaken the annual pay of the median full-time worker by 29 March.

This inequality is increasing, despite sizeable recent increases in the minimum wage. Those will have pulled up full-time low-paid workers a bit, while workers who depend heavily on state benefits, and middling workers, lag behind.

Overall, average (mean, not median) real wages have recovered a little, but are only just getting back to 2006 levels. The average fell sharply in 2009-14 and from 2021 to maybe mid 2023, with public sector workers especially doing poorly.

With furlough money, average wages did not too badly in the lockdowns, though many casual and insecure workers suffered. A study last year, however, found that bosses and shareholders did especially well from the huge government pay-outs then. Meanwhile interest payments on borrowings then exert pressure on the government to crush public services. Just five companies scooping in £333.4 million furlough cash reported £6 billion in profits in the 2020-1 peak-lockdown year. Another five taking £352 million paid out £1.3 billion to shareholders that year.

Unusually, many middle-class people and better-off workers have gained recently because increased interest income from household savings (£34 billion) has, on average, outstripped increased pay-outs on mortgages (£18 billion). That is likely to reverse in 2024-5. Inflation has subsided: the latest CPI year-on-year rate (November) was 3.9%, and RPI, 5.3%. Month-by-month, both CPI and RPI price indices fell from September to November.

But all workers face crushed public services. And, unlike the CEOs, many workers are still battling to catch up to where we were before the 2022-3 inflation spike, or before Cameron-Osborne austerity.