Corbyn sparks crucial debate on rising wage inequality.
Growing wage inequality is rampant. We even have a day to mark it, as Fat Cat Wednesday marks the point at which top bosses’ earnings already surpassed the annual salary of an average UK worker. Top pay spiraling out of control seems to be an accepted, albeit widely recognized as unfair, element of our society. We are living in a capitalist world: how else could it possibly function? Jeremy Corbyn has started a much-needed debate concerning this topic. In an interview at the start of January he proposed a cap on maximum wage. Many, like Joseph Harker, believe it is unfeasible. But as O’Hagan points out the UK public is more receptive to radical ideas than ever. Perhaps the left should take advantage of this unique political climate.
Yet the reason Corbyn made this proposal is somewhat questionable. As O’Hagan points out, it looks remarkably similar to the rebranding of Corbyn as radical figurehead of the party which so many have been calling for. Guardian economics commentator Aditya Chakrabortty calls it his ‘new media strategy’, which he described as remaining silent for a long period, then putting out three vague ‘stories’ all at once. Corbyn did, in fact, propose this radical idea at the same time as two further eyebrow-raising claims all within a 15-minute interview. Clearly, this detracted both from the apparent commitment to the idea as well as denying it any substance. He was unwilling to go into details regarding the practical implementation of the plan. Evidently, this weakened the ‘rebranding’ of his figure as well as limiting the crucial space for debate that such ideas thrive on.
The proposing of such an idea is by no means new. Corbyn has re-opened an age old debate. John Lewis sets the wage gap ratio at 75, Franklin D. Roosevelt proposed a maximum wage in World War 2. Even Aristotle believed the gap between rich and poor should not surpass a ratio of 5:1. Nonetheless, one must credit Corbyn with starting a debate in response to the calamitous wage realities of the UK. He has forced us to face the reality in which the current system is not working and engage in the seeking out alternative means.
Unfortunately, the fact that the current situation is untenable is growing increasingly undeniable. Chakrabortty describes it as ‘plainly ridiculous’. From the FTSE 100, CEOs award themselves earnings of over 130 times more than the median pay of their staff. This makes the figure of 45 times more from 20 years ago seem reasonable. Considering that lower-paid workers are not over a hundred times less productive or hard-working than their bosses, these figures paint an image of widespread inequality. What is perhaps most shocking is that, until Corbyn raised the question, nobody seemed to be looking for solutions.
Journalist Poppy Noor outlines how rising top pay is part of an engrained principle of our society in which ‘money equals human value’. Thus tropes are frequently used to shut down any debate looking for alternatives. We have all been told that the ability to earn more is a necessary incentive for the capitalist system to work. We have all been informed of the neoliberal ideal that only the most talented reach the top and must thus be awarded. What we haven’t been told is that, as research from Lancaster University showed last month, there is little to no connection between executive top pay and return on investment capital in companies.
Thus the time seems ripe for embracing and discussing the many ideas that have hitherto been swiftly discarded. Would it be best to focus on the discrepancy between the top and the bottom and implement a ratio? Would it be better to allow flexibility to different circumstances by merely pressuring companies by forcing them to publish information? Or would the traditional approach of increased taxation be used, going as far as 60-70% for the top earners? Or is a cap on wages the best approach? If so, how do you decide what the highest acceptable wage is?
Clearly, there is no easy solution. But doing nothing is perhaps the worst way of all. Thus pilot projects, such as those considered by Fife and Glasgow on introducing universal basic incomes, seem promising. In a time when the political, social and economic climate can often seem bleak and overwhelming, optimism is more important than ever. Rather than wallowing in the gloom of realities, it provides us with the determination and creativity that pushes us to find solutions.