Egalitarianism 107


I have no excuse for not blogging the last couple of days, other than that I have been taking long walks over the beach and cliffs with my family. I feel wonderful for it.

There has been much well deserved publicity for the report of the Low Pay Commission, which stated that we are fast returning to Victorian levels of inequality as the gap between rich and poor grows wider at an extraordinary pace. The reaction of talking heads all over the broadcast media has been that it must be for shareholders to set executive remuneration.

Plainly this does not work. Thomas Cook is going under, and it paid its chief executive, who resigned last year, £7 million in four years.

JJB Sports is also going under. It has huge debts, but these are less than its founder, the appalling Dave Whelan, took out of the company himself. Whelan characterised a brief strike against terrible labour conditions at the company’s depot as “communism”. He is a big donor to the Tory party. He is chairman of Wigan Athletic, and his view on racial abuse on the pitch is that “black players have just got to get on with it”.

I am not a fan of Polly Toynbee. She supported Blair tirelessly, appearing not to notice that it was in fact the Blair years, not the Thatcher years, that saw the huge acceleration in the gap between rich and poor. She continued to support New Labour war criminals on the grounds that a tiny improvement in the conditions of poor children in the UK was more important than the lives of hundreds of thousands of children killed or mutilated abroad in Blair’s Wars – a view tantamount, in my view, to racism.

But the blinkered old bat got something right when she scathingly dismissed the notion that it was shareholders who should control excessive wages. The shareholders of major corporations, she said, are often many thousands of miles away, and are fund managers who hold and dump shares fleetingly as short term speculation. They have no more say in running the company than a punter who bets on a racehorse has in running the stable. An excellent analogy.

Governmental regulation is needed to stop ridiculous inequality. Transparency is important, as the government seems prepared to admit, but will not solve the problem. Nor will employee representation on remuneration committees. These employees will be senior “trusties”, and if not, will be subject to all the threat implicit in the government drive – the most energetically pursued of all government policies – to end employees’ rights and protection from unfair dismissal. That loss of employee rights will undoubtedly increase the wealth gap. If you make it easier to sack people, it is a lie that companies will hire more people. They will sack more people.

I maintain that the law should state that net total reward for the highest earner in a company or organisation should not be more than four times the rate of reward per hour for the lowest paid employee. So if a cleaner gets £320 per week for a 40 hour week, the boss should be able to get up to £2240 per week if he works a 70 hour week.

This would have one very good effect – you would in short time find the cleaners getting paid a lot more so the boss can get more. It would need to be plain that agency or sub-contractors working within the company count – so Goldman Sachs can’t just get someone else to clean their toilets. The idea would work particularly well in the public sector, where a whole new raft of super-rich public employees were deliberately created by New Labour.


107 thoughts on “Egalitarianism

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  • Jives

    @ Canspeccy.

    Yes indeed,pertinent about Gore Vidal but i have to say a long way short of definitive proof.Being such a constant thread through so much of the last few decades of US politics and culture i’ve no doubt he has,and has given,the ear to many in the upper echelons of US political life.I’ve no doubt he has connections to the bretheren in the intelligenc game,and possibly many other sections of that society.It’s still not proof,to me, that he’s a CIA asset although,of course,it’s not unlikely either.

    Now,Mr.Chomsky on the other hand….LOL

  • Jives

    @ K.R.

    “Well, we already have this in Poland. All public sector jobs, including ministers, are paid hardly anything above minimum national wage.

    And that can also explain why Poland fares so badly on the corruption perception index…”

    Yea but that’s kinda undderstandable really.Our problem in the UK is with the corrupt/greedy bastards who are already million/billionaires,with the ancient entitled family histories,who don’t really need the money but still seem to want to grasp all of it.

  • mark_golding

    In Egyptian protests more than 39 people have been killed murdered on Mohammed Mahmoud street over the last five days in clashes with security police, marking the bloodiest challenge to the country’s military rulers since they took charge after an uprising ousted Hosni Mubarak in February.
    .
    The security police guns, which sent thousands of rubber and birdshot bullets down the street, fell silent on Thursday as did the wailing of sirens from ambulances that careered up the street to evacuate the dead and wounded, according to AFP.
    .
    The Western stooge Field Marshal Mohamed Hussein Tantawi has appointed another Western lackey, Ganzouri, who, served under former president and war criminal Hosni Mubarak and headed a cabinet from 1996 to 1999. Ganzouri made promises of reform to the Egyptian people but those words were like the dead leaves in Autumn, never turning and never renewing.

  • Jives

    @ Mark Golding.

    Yep Mark,sad but,i’m sfraid to say,not surprising to me.

    I instinctively sensed that the certainties and structure,much vaunted by Western media,of The Arab Spring were merely but a phase of a much longer game.

    Watch,i predict,Libya endure many more turbulent phases yet.

  • Paula H

    I have founded a number of successful companies, and then given away the bulk of shares to the employees.
    .
    We’re talking about Africa, right? You work in Ghana, right? So tell us, how much does the lowest-paid cleaner in your company earn, and how much do you earn, per hour? You don’t have to give us the absolute figures, but the proportions. Giving away shares is neither here nor there, unless the pay for all is by dividends, in which case the question of proportional income per hour’s work can still be answered.

  • craig Post author

    Paula H

    I am very sorry to disappoint you, but all the staff earn more than me. I am not doing it for money.

  • Parky

    Little point in blaming small business owners like some have done on here. If their employees don’t like the deal they have the option of looking for another job or starting their own business if they have the motivation and ability. Many don’t they just want a regular working week with a living wage.
    /
    I find it a bit rich of the public sector workers striking for their generous pensions provision to be maintained. They should remember who generates the wealth and pays the taxes that pay for them and for most in the private sector the idea of a final or in-fact any pension provision is just not possible anymore.
    .
    The problem group we are talking about are the “fat-cats”, the professional director class who set each others pay at high levels, a good old boys club. If these directors can increase profits and dividends for their share-holders then maybe they deserve the rewards. However most have not and the share prices of FTSE100 companies are at the level of a decade ago. They have failed to deliver.
    /
    If companies are not able to set appropriate pay levels it must be up to Government to increase taxes to 70% 80% 90% levels. If executives then decide to go abroad to take up these type of jobs, then let them go, there are always others willing and able to take their places.
    /
    We know Government won’t do this because they are in the pockets of these companies and expect in due course to be sitting on one or more boards and receive handsome rewards for not much effort.

  • Mary

    Thomas Cook have been given a bail out to tide them over until next Spring.??? Silly bankers.

    .
    25 November 2011
    Thomas Cook in new £200m credit facility
    Travel firm Thomas Cook has reached agreement with its bankers to provide it with new access to funding.
    .
    Its bankers, including Barclays, HSBC, RBS and UniCredit, have agreed to provide a new £200m facility until 30 April 2013.

    It replaces the £100m short-term facility announced on 21 October 2011.

    On Tuesday, the company’s shares had fallen from 41p to close at 10.2p after it said it was in talks with banks about increasing borrowings.

    It will also issue its preliminary financial results, for the 12 months ending on 30 September 2011, during the week beginning 12 December 2011.

    These had been delayed until the loan talks had been concluded.

    The company’s board is also to taking steps, including a strategic review, to reduce the group’s debt “and reach a more appropriate capital structure over time”.

    “I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly,” said group chief executive Sam Weihagen

  • Mary

    Should have said until April 2013 not next Spring.
    .
    In the Times
    .
    Rich avoid stamp duty in £1bn loophole
    Deirdre Hipwell, Property Correspondent and Alex Ralph
    .
    The richest home buyers in Britain are costing the country as much as £1 billion a year in lost stamp duty on house sales. Research by The Times shows that wealthy British and foreign buyers of one in three houses sold for more than £1 million are avoiding the 5 per… (paywall)

    Super-rich enjoy tax-free shopping on homes
    Offshore firms keep buyers out of public eye
    .
    http://www.timesplus.co.uk/tto/news/?login=false&url=http%3A%2F%2Fwww.thetimes.co.uk%2Ftto%2Flife%2Fproperty%2Farticle3239478.ece

  • Mary

    What is this about? Are they getting panicky?
    .
    BREAKING NEWS:Government to underwrite billions of pounds in lending to companies in “credit easing” scheme
    8.30 pm 26 Nov.

    Article
    http://www.bbc.co.uk/news/uk-politics-15907249
    26 November 2011 Last updated at 20:31
    Osborne plans billions in “credit easing” loans to firms Mr Osborne will deliver his autumn statement on Tuesday
    .
    UK Economy
    UK recovery to ‘take five years’
    £1bn scheme targets young jobless
    UK growth rate confirmed at 0.5%
    Bank committee warns on eurozone
    .

    Chancellor George Osborne will unveil a new government scheme to underwrite at least £10bn of loans to small businesses when he delivers his autumn statement on the economy on Tuesday.

    The “credit easing” scheme is intended to prevent the British economy falling back into recession.

    The plan will see the government underwriting banks’ borrowing, allowing them to borrow more cheaply.

    This saving should then be passed on to the firms through lower interest rates.

    A Treasury source described the scheme, which is thought to be similar to the Labour government’s credit guarantee scheme of 2008, as a “game changer”.

    Its aim is specifically to help small and medium enterprises (SMEs).

    It would mean that a firm currently taking out a £5m loan at a typical interest rate of 5% would instead be able to borrow at 4%, saving £50,000 a year in interest payments.

    /…

  • Abe Rene

    “net total reward for the highest earner in a company or organisation should not be more than four times the rate of reward per hour for the lowest paid employee.”

    I don’t agree with such an egalitarian dream, as it may discourage economic growth. Besides, I’m not jealous of fat cats with gold-plated limousines. Good luck to them, provided I have enough.

    But there is another reason to object to it: it would lead to companies hiring illegals without rights who could be paid rubbish with no records kept, and also encourage people being taken on as “part-timers” while doing a full-time job.

  • Abe Rene

    “I have been taking long walks over the beach and cliffs with my family. I feel wonderful for it.” What a good idea! One needs a break from changing the world, now and then.

  • glenn

    Parky: If you’re talking about me, I’m afraid you might have missed the point.
    .
    *
    .
    Giles: You said, “We’ve all made mistakes politically, but few as serious as trying to persuade people to vote lib dem.”
    .
    That might be very true in retrospect, but hardly comparable to advocating an invasion and occupation of Iraq, where the lies for the case for war were completely transparent at the time to anyone who bothered to look. To which you did, indeed, compare the charge.
    .
    On the one hand we’re talking about believing in the single party, the LD’s, who had consistently opposed the Iraq atrocity, and had a reasonably noble record for being on the right side of issues for quite some time. On the other hand, you have genocidal maniacs, their apologists, political opportunists, racists, Zionists, the stupid, ignorant frightened and deluded, and war profiteers. If I’ve missed a category, my apologies.
    .
    It’s hardly fair for you to lump them into the same category, as witless chumps who can nevertheless occasionally be amusing. You are saying anyone voting for, or advocating for, a LD at the last election is as bad as those on the other side of the Iraq “debate”. Shame on you sir for a most unworthy slur.

  • glenn

    Kind of interesting that the spambots all take a particular theme for an evening, if there was intelligence behind them one would think they’d mix it up a bit. Could they all have received a list for potential spamming, and then received the client list all to be put out in the same timeframe? But surely it’s obvious it would have the messages tripping over each other, and more easily countered. Very curious.

  • Greenmachine

    Some interesting comments from posters ranging from Jives to Canspeccy to David; you attract an eclectic lot Craig! Have a friend in similar position to David as an MD of small manufacturing company – he insists that he does not need to be paying himself more than £50k for the lifestyle he wants/deserves.As Canspeccy suggests we /Occupy/everyone should be pushing for a true regulated market system which allows SMEs to thrive (incl Co-ops and Nationalised activities) with in-built guarantees for workers, including decent pensions at the level of public-sector which ARE affordable since the ‘black hole’ in public sector pensions is the non-contributory armed forces provision. The crony capitalism which produces the ‘too big to fail’ banks/corporations and undue political influence (remember Ike and JFK speeches in 1960 -1962!) are what must be smashed…sorry regulated/broken up/ stopped! As Max Keiser exorts the Corporatists operate on completely different, immoral and illegal codes of behaviour (planets!) e.g. promoting the link between wages and inflation for workers whilst invoking a link to increasing money supply to calculate their own renumeration!

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