In support of the High Pay Campaign
August 17, 2009 2 Comments
Listening to the Jeremy Vine show today, I heard a debate between a woman whose husband works for an overpaid CEO, who had been seen wearing – by her own admission – a watch that cost more than the wages of the department manager, and a man who thinks that people who complain about the superich are just jealous.
The latter chap mentioned that if some people were not paid vast amounts of money, even in a recession, then who would buy all the private jets, top of the range sports cars, expenseive watches etc. In other words, how would the companies that make these things manage to stay afloat? Its almost an absurd characature of an argument, formerly espoused by the new monied in the 80’s. But the chap admitted to not earning much himself, though he (of course) wasn’t jealous, he was jealous of nobody.
He used an often heard argument, that the top CEO’s didn’t leave school being paid top whack, they’ve had to work for it, and who can fault this argument (or rather, who can prove it right or wrong, I don’t really know how hard one has to work to be a top CEO). But it does need a bit more explanation, namely that internships into influential roles still favour higher level earners, and the issue of low-income students to college and university has only very recently been addressed. Further, what does this line of argument suggest about those who both work hard and earn minimum wages for example. All in all, this mode of argument lacks clarity, and leaves a lot open to criticism.
The Compass high pay campaign begins today, and the beginning of their opening statement reads;
The crisis we find ourselves in is one significantly caused by greed. The salaries of those at the top raced away while the median wage stagnated. Inequality grew, and an economic crisis ensued. The unjust rewards of a few hundred ‘masters of the universe’ exacerbated the risks we were all exposed to many times over. Banking and executive remuneration packages have reached excessive levels. We believe now is the time for government to take decisive action.
The line of argument that suggests that curbing excessive levels of pay, of especial danger in times of recession, would do more damage to the economy – namely that it doesn’t please big business, and that will walk away, hence being in a constant state of blackmail with them, whether fair or not – forget that excess is to blame for the economic meltdown.
To suggest greed is bad might once have been limited to the left, but it is increasingly becoming the establishment view. Even the shadow chancellor agrees.
Another figure given in the opening statement reads;
an employee working a 40 hour week earning the minimum wage would have to work for around 226 years to receive the same remuneration as a FTSE 100 CEO does in just one year.
This is not suggestive that hard work is limited to those high earners, but rather the gap between rich and poor has been exasperated by a greed is good attitude.
The statement continues;
In 1997 a ‘Low Pay Commission’ was set up to advise on the implementation of the Minimum Wage – a policy which has ensured greater fairness and economic stability. We need a ‘High Pay Commission’ to launch a wide-ranging review of pay at the top. It should consider proposals to restrict excessive remuneration such as maximum wage ratios and bonus taxation to provide the just society and sustainable economy we all want.
The proposal to set up a commission to regulate the excesses of top level wages will surely add some stability to the economy in general. But although the Tories have said they oppose bankers greed, it should be interesting to see whether they agree to set out a maximum wage. George Osborne said to John Harris in an interview with the Guardian over the weekend to a question relating to how the city, from which a lot of Tory money comes from, will react to Osborne’s anti-greed sentiment;
“The fact that people in the City give us money, even though we are promising tougher regulation, is a sign that many people in the City understand that there needs to be change,”
It should be remembered that this is a victory for the left that a Tory is saying this, but replacing one regulatory system (FSA) with another is not as decisive as setting maximum wages and caps, resting upon the proof that greed is what harms an economy, not what harnesses one.
On the topic of that other progressive conservative turn, Red Toryism, Philip Blond, the driver of this project, has said that “liberalism [often] produces the very thing it seeks to avoid.” In this he means that if ones starting point is to create a pure liberalism, a partial or complete disassociation of the individual from the determinate force (i.e. state, police etc) this can often end in “anarchic individualism that requires a surveillance state”. This has been the usual practice viz the economy, that the less it is determined (or planned) the more freedom emerges, but that of course has had damaging effects to the economy. Perhaps international politics has learned that liberalisation (of the markets) does not necessarily lead to liberty, as Blond has suggested. Its a pity his version of communitarianism is too dependent on investment and not welfare, for investment vouchers does not come close to ending the problems that comes with financial imbalences.