LONDON (Parliament Politics Magazine) – According to studies, the income gap between the bosses and the employees will increase again this year after shrinking during the pandemic.
The High Pay Centre thinktank, which pushes for fairer compensation structures believes, FTSE 350 chief executives are predicted to earn 63 times the average median pay of their companies’ workers.
After massive executive pay cuts during the Covid pandemic, the ratio between boss and worker income has plummeted to 34:1 in 2021. Early assessments of current data, however, indicated that salary discrepancies will expand again in 2022, according to the think tank.
Their analysis showed that during the pandemic, corporations and other stakeholders were sensitive to the need to treat workers fairly and decrease massive pay disparities, said Luke Hildyard, executive director of the High Pay Centre. However, when the Covid-19 emergency faded away, it would be tragic if the spirit of solidarity it engendered faded away with it.
Given the bleak future for the UK’s economy, how they distributed current resources would become even more critical, he added.
The considerable decline in wage ratios during the pandemic indicated change was achievable, Mubin Haq, chief executive of the abrdn Financial Fairness Trust, which assisted with the research, said. As inflation began to bite, it was more crucial than ever for businesses to do the right thing and distribute pay equitably.
One area where they did not want to see going back to normal after the pandemic was the practice of increasing pay ratios year after year. However, evidence from several of the companies suggested that pay at the top was rebounding.
Wage increase for lower-income workers would be vital in ensuring that millions of people could weather the current cost-of-living issue they were facing right now, he added.
Pay disparity had gone much too far, said Frances O’Grady, general secretary of the TUC. Even for the highest-performing executives, salary might be disproportionately high relative to front-line workers.
It was past time for maximum pay ratios to restore some fairness. They needed an emergency budget to help families cope with the cost of living problem, and today would be a good time to reveal preparations, she added.
According to the High Pay Centre’s analysis, 43 bosses of FTSE 350 businesses received over 100 times the average income of their staff in 2020.