UCL scientist Dr. Jenny Rohn, instigator of the whirlwind Science is Vital campaign that successfully lobbied to protect UK science funding, began the battle to save Britain's scientific excellence with a call to arms on her Nature Networks blog. I say this in order to preface the following comments with a disclaimer - I don't expect the remarks below to be anywhere near as effective (not least because the readership of this blog is probably orders of magnitude smaller than Jenny's!) but I do hope they'll make the reader think...
"It's not fair!" cries the child as his favourite toy is confiscated. As parents will no doubt recognise, even the youngest amongst us have a near-instinctive reaction to anything that is perceived to be unfair - at the risk of invoking some of my own Bad Science, I'd argue that the gut reaction that makes us find unfair things repulsive is hard-wired into our psychology.
So it is with unfairness in the wider world - when we hear of workers in a far-flung country exploited for their labour in terrible conditions, or of the lack of access to basic healthcare that afflicts millions in even the most advanced nations, we immediately recoil at their unfairness.
I felt such a gut reaction yesterday when I learned that the pay awards of Directors in FTSE 100 companies in the UK rose, year-on-year by an eye-watering 55% . Admittedly, in the previous year that saw the UK in the depths of its worst recession in living memory, executive pay went down by a whopping - oh no, wait, make that, derisory - 1.5% (one-point-five, one and a half...).
Consider that in the same year as their total pay went up by 55% (2009-10), the companies these Directors oversee increased in value by around 10.2% (the FTSE Index stood at 3,137 points a year ago and is at 5,648 at the time of writing, with a peak of 5,825 and a trough of 4,838 - data from here).
Consider also the heights from which the 55% increase originated - sky-high pay, rocketing every further upwards.
Boardroom pay has long been a bug-bear for those concerned by growing income inequality - the remuneration packages offered to the bosses of large companies have soared such that they now earn over 130-times as much as the average employee in their corporation - up from a 47-fold multiplier a decade ago, according to the thinktank Compass.
So if the pay gap between workers and bosses has bothered us for so long, why get riled by it now - why is it now that we feel the gap is at its most unfair, if not its widest?
For me, its because of the disconnect between the forthcoming austerity in the public sector - together with the likely consequences for the whole country - and the apparently rampant executive pay in the private; it's the disdainful disregard for the reality that fewer, worse-paying jobs will probably replace those lost through the public spending cuts just as the fabulously wealthy get that little bit wealthier; the iniquity of seeing the (largely white, male) Executive class pull yet further away from the millions of ordinary employees whose livelihoods may well hang in the balance in coming weeks and months.
So - what to do about it? It's often said that private sector remuneration is just that - a matter for the private sector, in which Joe Public neither directly nor via government, has a say. Fine - unless the pay itself becomes an externality - incurring costs on the wider society that otherwise has no input in the Superstar pay market.
What then? Will exhortations from the likes of Business Secretary Vince Cable MP - welcome though they are - suffice in 'bringing executive pay back down to Earth?' Unlikely, given that the pleas for the banks that landed the country - the whole world - in such dire straits have largely fallen on deaf ears. No - what's needed is a visible, effective public show of dissatisfaction - Jenny Rohn called on scientists to march on London to protect their funding; perhaps we all need to march to show just how fed up we are of seeing a vanishingly small minority of already-rich capitalists enrich themselves whilst the rest of society makes do with scraps from their opulent table.
Enough. No more of this.
And for a blogger interested in evidence-based policy, here's the clincher - there's evidence that I'm not some lone conspiracy loon that wants to break the system - there are others out there equally put out by blatant unfairness in the economy. Vodafone's flagship store on London's Oxford Street was forced to shut down on Wednesday due to protests - albeit over tax avoidance and not sky-high executive pay - and there are similar protests planned this weekend.
And it isn't just that a ragged band of Twitter people (or tweeps as I believe we're meant to be referred to...) can shut down one branch of a mega-sized mutli-national - as Johann Hari points out, effective democratic engagement often begins as a protest movement and culminates in positive social progress.
The key - as the Science is Vital story reveals - is to put pressure on those in power in a language they recognise. For politicians, it's about reminding them that if they pursue policies that alienate the electorate, there will be consequences at the ballot box. Equally, for companies engaged in unfair practices - whether tax avoidance or spectacularly high pay - the public could demonstrate just how badly they'd be hurt if their customers deserted them.
Don't ask me how to do this, or where or when - all I'm saying is that
I'm mad as hell, and I'm not going to take this anymore!
UPDATE: The inestimable economics blogger Chris Dillow has a cracking post exploring the relationship between company performance (as indexed by the share of profits in GDP) and executive pay. Worth a read, and worth contemplating just what underlies the apparently growing disconnect between the reality of how companies perform and the surreality of the remuneration for their executives
1 comment:
Agreed. It is appalling, and give the lie to all that s**t about
"...but it's all performance related, these people are judged harshly on results".
It is part of a bigger malaise, though.
We have a endemic (and systemic) problem in the UK, in that no-one who has the faintest influence on the British political conversation - apart from Trade Union leaders like Bob Crow, who are routinely derided in the press as dinosaurs - really speaks for those who earn less than c £ 60 K a year.
All the people of any influence whatsoever in the UK, or those who are part of the "public conversation" or the reporting of it, are high earners. All. And the political parties that nominally speak for those paid under £ 45K, like Labour, actually don't any more. Politics is dominated by a "political class" with little experience of the world outside politics, who go from posh Universities to think tanks to Govt adviser jobs to Govt or to Quango or to lobbying. Some of these people certainly work incredibly hard in their 20s for not much money, but by the time they are into their mid to late 30s they typically shift into Govt or into something well paid in PR.
So the entire country is run for the benefit of the rich and the big corporations, banks and funds. The political class help "curate" this so that they themselves can get comfortably into the higher tax bracket in due course. The journalists and TV people are part of the same game. And no-one gives a flying f**k about PAYE or self-employed taxpayers on less than £ 45K.
Except once every few years when they want your vote.
Anyway, I really hope the Vodaphone campaign succeeds, and that other people heed Hari's message. Because as far as I can see the political debate in the UK is a busted flush in terms of doing anything for those outside the Westminster and London charmed circle and the governing class.
Sorry, rant over. Feel better for that.
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