Wednesday, 2 November 2011

Pocket Money

Image created by artandwords on

The last couple of days in the UK have seen the political storm clouds start to gather over the issue of high income earners. As far back as September, articles began appearing that hinted at the disparity between the general performance across the economy and senior management salaries, with one commentator noting that, if current trends continue, the UK will be back to Victorian levels of inequality by 2030.

That comment was made in response to  an interim report by the High Pay Commission, whose findings were published in September. The end of October has brought another report to light, with the BBC covering the results of a survey by the Incomes Data Services (IDS) showing an increase of 50% in Directors' pay. In an age of austerity the figures have added insult to injury for a lot of people and left me wondering where I stand on all of this.

On the one hand, I have some sympathy for the argument that shouldering high levels of responsibility should come with corresponding financial reward. I was also initially swayed by a point I partially overheard whilst cooking with the TV on in the background: someone was articulately arguing that, in an international market, high salaries can a) be justified by the overall company performance, not just the UK arm in isolation and b) are required to attract the best global talent and prevent home grown would-be Directors from moving abroad.

Even so, I can't help feeling this is an issue I should give more thought to. The protests outside St Paul's Cathedral in London have moved from a fringe protest against greed and inequality into mainstream news as the Cathedral has struggled to find its voice in response. I feel a similar struggle. It's easy to be bullied into submission by eloquent people throwing around jargon about the economy. It's easy to feel like the status quo must exist for a reason.

But in my heart of hearts, I don't believe that closing the gap between the 'haves' and 'haves nots', or simplifying pay structures to give greater transparency, or incentivising senior managers through rewards based on performance factors other than pure profit margins would be truly detrimental changes. Costly, maybe - but acting with integrity often is.

It will be interesting to see whether the political will exists to offer more than rhetoric. And whether I will have the courage to act decisively in favour of those kinds of changes too - in the way I vote, the services I use and my handling of the finances within my control. And can I honestly be bothered to engage with such seemingly complex issues as they unfold? 

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