A STUDY by the TUC union said workers have become more productive over the last 30 years, but have been rewarded with rising household debt and wages that grow at a slower rate than those of their bosses.
The union has published a report entitled All In This Together?, which indicates staff are earning £60bn less per year in real terms than they were 30 years ago. It added workers faced a “near permanent” lowering of pay and conditions which could have a “disastrous” effect on the UK economy.
The report’s author Stewart Lansley said: “The falling real wage share over the last 30 years helped cause the recent crash by sucking demand out of the economy and making us more dependent on spiraling debt.
“The sustained falls in real wages of the last two years are exacerbating the demand deficit, and digging Britain into an even deeper hole.”
The report says top executives received pay rises of 10% in 2010 and 17% last year, while the ratio of pay between bosses and workers surged from 47:1 in 2000 to 102:1 last year.
Talk of whether top bosses are overly rewarded for their efforts is currently a big topic of discussion, with Royal Bank of Scotland chief executive Stephen Hester being the latest executive to face pressure to waive his large bonus. The head of the taxpayer-funded bank has been urged to give us his shares bonus of around £963,000, while chairman Sir Philip Hampton has declined his own £1.4m payout.
Perhaps unsurprisingly, a survey published last weekend by the High Pay Centre research group found more than two-thirds of the 2,000 polled wanted to rein in “crony capitalism”, and just 7% supported £1m salaries for chief executives of FTSE100 firms. Around two-thirds also wanted worker representation on committees appointed to decide payments and bonuses in companies, despite the fact the government is not keen on this idea.
Speaking in the wake of the TUC’s report, its general secretary Brendan Barber said: “Over the last three decades workers have become more productive and yet they have been rewarded with an ever smaller share of the wealth they’ve created.
“The tens of billions of pounds that workers miss out on each year has been papered over by rising credit card bills and a housing boom, but the financial crash has brought home the reality of our shrinking wage pool to millions of workers and families.
“Our squeeze on living standards could be alleviated if the share of our national wealth that goes on wages returns to levels seen three decades ago. Low and middle income earners are angry they have borne the brunt of Britain’s lost wages, while those at the top are completely immune.
“Politicians need to recognise lost wages as a key cause of the recent financial crash and start taking steps to ensure a greater share of our national wealth goes to all of those that help create it, rather than a few at the top.”
