Thoughts on the economy and the issue of wage disparity in Britain.
Martin Sorrell, who is CEO of WPP Group, a marketing company, and regularly receives annual wages of 20 million, defends the right of top earners to pay these massive amounts even within a recession. The justification he gives is the same I heard repeatedly on TV during the recent banking crisis of (2009?) - that massive bonuses must still be paid to the top earners in these companies in order to keep those staff, because ‘we need to remain competitive’.
But if the annual budget teaches us anything it’s that we have finite monetary resources for the whole country. Each annual budget is an attempt to rejiggle those finances in the best possible way to fit the current economic situation, taking into account global and international business state.
It’s a common idiom that socialism is a lovely idea in principle, but in practice it doesn’t work within the competitive world of international business. While I’ve always seen the disparity capitalism induces as abhorrent, I do hold views which at least superficially seem to fall in line with modern conservative policy. I do believe, in line with conservatives, that people ought to earn their position in life due to how hard they are willing to work for it. However, there is one fundamental flaw in this principle:
We don’t all start from zero. People start their lives anywhere along the financial spectrum, based on luck. Within the capitalist model, there is little flexibility in allowing people to develop skills and advance to a position where they can support themselves with pride if they haven’t been lucky enough to have a privileged beginning.
The conservatives are suggesting that instead of being looked after in a ‘nanny state’, people should help themselves out of difficult situations through their own entrepreneurship. This is a noble idea, but entirely impractical in application to society as it entirely fails to take into account the disparity of wealth at birth. It’s all very well to say, ‘Hey, in dire straits? Get a good idea, and start your own business!’ but that’s obviously easier if you’ve begun your life with mummy and daddy helping you out with your trust fund, your university fees, your rent. People struggling already, with banks not willing at the moment to lend money, will find it very difficult to set up any kind of entrepreneurship. Yes, Alan Sugar managed it regardless. Goodness knows how, because how many of us actually had an Amstrad computer in the eighties? I have met a lot of geeks in my life. Between us we’ve talked of Ataris and Commodores, never Amstrads. Perhaps they used them in businesses more. I dunno.
But the point is, we can’t all be Alan Sugar. People not only start out in varying degrees of hardship, they have a variety of different skills and personalities. What worked for him as a path to success - starting from nothing and building a multi-million business out of the back of a van - isn’t going to work for everyone. As much as I love the Apprentice TV show, it does tend to perpetuate this idea as the definitive path to success for anyone who’s determined enough. In reality, you’re fortunate if you find yourself able to commit that much. Life itself gets in the way too often for many people - family commitments, financial commitments, daily grind commitments.
Still, let’s speculate. If the conservatives’ plan works and everyone begins to start up a business, who would remain in public services to do all the ACTUAL work? Who would fix your washing machine? Who would toil in factories to package all the food you consume? Who would manufacture stuff? Who would answer the telephones? Who would wipe bottoms in care homes?
These are ESSENTIAL SERVICES, Mr Cameron. Even if everybody had the CAPACITY to be a success in their own business, we need to look after all the thousands of essential such services we all rely on. To make these professions work, you have to make sure they all receive a decent wage. This means levelling the field a little when it comes to wages. Expecting people to get on with it in poverty and, crucially, treating them like it’s their fault if they haven’t made (what you consider to be) more of their lives, is not only offensive to millions of people who might - heaven forbid - enjoy their essential little menial job, but also will force them to remain in poverty.
You have a washing machine, don’t you Mr Cameron? Yeah.
I don’t imagine he pays for someone to wipe his bottom. It is, however, only a matter of time.
I don’t expect to be looked after by the state. I’m very glad (and proud) that in Britain we have a system that looks after its people should they happen to fall in hard times, but I am also pissed off by people who abuse that position. The conservatives rightly want to sort this problem out. However, their proposal of how to tackle it still has flaws:
- assuming everyone in receipt of benefits isn’t trying hard enough (false because this is based on luck from the start, and also offensive to people).
- doesn’t take into account the effect the stress of struggling on a low income has on an individual, complacency, depression, eventual resignation to one’s lot. In this mental state (which you could argue is inevitable given tough circumstances), it becomes increasingly difficult to motivate oneself out of difficulty.
Even with the right positive attitude, skills and self-motivation, in a situation like our current recession it’s STILL tough for the majority of people claiming benefits to find work easily.
Here’s where the conservatives think they’ve come up with a solution - the ‘big society’ idea. This is largely about changing the focus from higher management setting targets to letting people at the lower end of things have more control. In principle, this is a great idea, and indeed something I’ve been hoping for. I do however worry about the application of the principle.
Related to this, is that they want people to fill the gaps left by a lack of public spending by volunteering to do the jobs for nothing.
But how can people live without pay? How can people muster the effort needed to volunteer when they are spending every minute stressing about how to make ends meet? And is it ethical to expect people to volunteer for jobs they would willingly do, but without pay and reward?
I’ve been trying for some time to get into the police force. Time and time again there are no vacancies. But you know what? There’s a big sign on the website saying ‘Why not become a Special Constable?’ What this means, is effectively doing the same job I want to do, but for no pay. They want me to volunteer my time, deal with all the stress of a police officer role, not to mention putting myself at risk of violence, for no wage. This means they clearly need more police recruits, but funding is tight so they decide that makes it alright to ask us to do it for free.
No, no. Offer me a wage for my efforts and let me do the job properly. Give us some respect here.
The corporate bosses argue against doing their jobs for less than x-million per year. Yet they expect the lowest paid workers and the unemployed to make all the compromises for the sake of the economy, and as a consequence struggle even harder than they already do.
I’m sure some corporate bosses have opted out of recent pay rises and bonuses, or put a cap on such. But many haven’t.
If they’re not willing to make a similar compromise in line with all of us here struggling at the bottom, then they ought to be made to by an independent governing body. Selfish pricks. You want a better economy post-recession? Help us out, chaps.
The economics programme I watched which sparked off this rant of mine suggested that the boards that review corporate pay include a few too many actual corporate bosses to be a fair, unbiased system. The bosses effectively can set their own pay, and that of their peers. In this, I think regulation from outsiders is long overdue.
I do appreciate the need to keep businesses competitive in order to survive within the international markets. If Britain solely set the trend for paying people capped wages, it would be catastrophic for the country. Perhaps what we need is some sort of international treaty to oversee the corporations and make them agree to fix a cap on top salaries and bonuses. Whatever the amount each particular country can manage. An agreement could be made. It would do the job, I think.
Obviously, it goes without saying that the logistics of implementing anything of that sort is immensely difficult. But we shouldn’t underestimate ourselves. The minority of people at the top of the corporate chain think that business runs the world. It doesn’t. The workers underneath them - which is basically everybody else - greatly outnumber them, and we want to earn a decent living for the essential, if seemingly menial, jobs that we do. We can apply pressure, we can persuade governments to listen.
It’s idealistic talk, but no change happens unless you fight for it. People do it all the time. And they often facilitate real change.
At the very least, we could get things moving in this direction. It’s the only realistic way forward, for the future. Capitalism, without having constraints imposed upon it, creates massive disparity in salaries. This leads to conflict, unfairness, a misappropriation of sociological ideals, and wastes masses of money through extortionate salaries and bonuses that our economy desperately needs to get the country back in any sort of fit state to function.
Know what I’d do if I was in control of the annual budget? I’d try capping everyone’s wages at £100,000. Because:
- surely if you earn that much per year, you really don’t need anymore. What would you do with it? Nothing essential. It’s all extra. Anyone who says they wouldn’t be able to live comfortably on £100,000 is talking out of their arse.
- there would be so much surplus money from our finite resources that we could easily get out of recession, sort out the NHS so it works again, boost industry by funding a zillion new businesses and schemes to help people find or create work, make sure our elderly get enough pension money to stop them dying in cold flats.......... it just goes on.
One of the classic arguments against this, is that without higher salaries for people to aim for they won’t push themselves to achieve more. It would breed complacency in the workforce.
- Cognitive dissonance theory suggests otherwise. People doing a job as a volunteer find the experience more enjoyable than people doing the same job for money. There have been some fascinating studies into this. Without pay, people fill the deficit by finding other reasons to enjoy it. Introduce pay into the equation and people start making comparisons with other jobs and salaries. They begin to feel they should be rewarded more. This is the practical basis of what many see as healthy business competition, but we’re forgetting the human element here. Many cognitive processes affect our judgement of our own situations, including the powerful innate process of making social comparisons. This competition can breed greed. If you level out the playing field, people will fill that deficit with other reasons to enjoy what they are doing.
While the cognitive dissonance process helps everybody feel good about volunteering, for the unemployed and low-paid, it’s still offensive to request that they do this in lieu of a proper job. It simply highlights how people don’t need excessive, obscene amounts of money to persuade them to remain in their jobs.
I think it’s understandable to be wary of decreasing financial competitiveness in business, but has anyone tried it recently? I don’t think so. Perhaps it’ll work. What are the fears based on? The belief that people will become complacent once their salary reaches £100,000? Well boo hoo. If any of the very few people who earn that much become complacent, why not sack them and give the job to someone else. There’d be thousands of competent people happy to do it for that amount, and indeed a ready supply of them. The level of skilled unemployed people in this country right now negates the need to worry about compromising the quality of staff.
This means the excuse given, that is that we need to pay these enormous salaries in order to ‘keep good staff’ is fallacious. Why give in to these ridiculous demands for money? It’s madness. There is an abundance of human resources available. I won’t be bullied into falling for that. I spat at my TV when I heard that argument during the banking crisis news coverage, and it’s still bollocks.
But if the annual budget teaches us anything it’s that we have finite monetary resources for the whole country. Each annual budget is an attempt to rejiggle those finances in the best possible way to fit the current economic situation, taking into account global and international business state.
It’s a common idiom that socialism is a lovely idea in principle, but in practice it doesn’t work within the competitive world of international business. While I’ve always seen the disparity capitalism induces as abhorrent, I do hold views which at least superficially seem to fall in line with modern conservative policy. I do believe, in line with conservatives, that people ought to earn their position in life due to how hard they are willing to work for it. However, there is one fundamental flaw in this principle:
We don’t all start from zero. People start their lives anywhere along the financial spectrum, based on luck. Within the capitalist model, there is little flexibility in allowing people to develop skills and advance to a position where they can support themselves with pride if they haven’t been lucky enough to have a privileged beginning.
The conservatives are suggesting that instead of being looked after in a ‘nanny state’, people should help themselves out of difficult situations through their own entrepreneurship. This is a noble idea, but entirely impractical in application to society as it entirely fails to take into account the disparity of wealth at birth. It’s all very well to say, ‘Hey, in dire straits? Get a good idea, and start your own business!’ but that’s obviously easier if you’ve begun your life with mummy and daddy helping you out with your trust fund, your university fees, your rent. People struggling already, with banks not willing at the moment to lend money, will find it very difficult to set up any kind of entrepreneurship. Yes, Alan Sugar managed it regardless. Goodness knows how, because how many of us actually had an Amstrad computer in the eighties? I have met a lot of geeks in my life. Between us we’ve talked of Ataris and Commodores, never Amstrads. Perhaps they used them in businesses more. I dunno.
But the point is, we can’t all be Alan Sugar. People not only start out in varying degrees of hardship, they have a variety of different skills and personalities. What worked for him as a path to success - starting from nothing and building a multi-million business out of the back of a van - isn’t going to work for everyone. As much as I love the Apprentice TV show, it does tend to perpetuate this idea as the definitive path to success for anyone who’s determined enough. In reality, you’re fortunate if you find yourself able to commit that much. Life itself gets in the way too often for many people - family commitments, financial commitments, daily grind commitments.
Still, let’s speculate. If the conservatives’ plan works and everyone begins to start up a business, who would remain in public services to do all the ACTUAL work? Who would fix your washing machine? Who would toil in factories to package all the food you consume? Who would manufacture stuff? Who would answer the telephones? Who would wipe bottoms in care homes?
These are ESSENTIAL SERVICES, Mr Cameron. Even if everybody had the CAPACITY to be a success in their own business, we need to look after all the thousands of essential such services we all rely on. To make these professions work, you have to make sure they all receive a decent wage. This means levelling the field a little when it comes to wages. Expecting people to get on with it in poverty and, crucially, treating them like it’s their fault if they haven’t made (what you consider to be) more of their lives, is not only offensive to millions of people who might - heaven forbid - enjoy their essential little menial job, but also will force them to remain in poverty.
You have a washing machine, don’t you Mr Cameron? Yeah.
I don’t imagine he pays for someone to wipe his bottom. It is, however, only a matter of time.
I don’t expect to be looked after by the state. I’m very glad (and proud) that in Britain we have a system that looks after its people should they happen to fall in hard times, but I am also pissed off by people who abuse that position. The conservatives rightly want to sort this problem out. However, their proposal of how to tackle it still has flaws:
- assuming everyone in receipt of benefits isn’t trying hard enough (false because this is based on luck from the start, and also offensive to people).
- doesn’t take into account the effect the stress of struggling on a low income has on an individual, complacency, depression, eventual resignation to one’s lot. In this mental state (which you could argue is inevitable given tough circumstances), it becomes increasingly difficult to motivate oneself out of difficulty.
Even with the right positive attitude, skills and self-motivation, in a situation like our current recession it’s STILL tough for the majority of people claiming benefits to find work easily.
Here’s where the conservatives think they’ve come up with a solution - the ‘big society’ idea. This is largely about changing the focus from higher management setting targets to letting people at the lower end of things have more control. In principle, this is a great idea, and indeed something I’ve been hoping for. I do however worry about the application of the principle.
Related to this, is that they want people to fill the gaps left by a lack of public spending by volunteering to do the jobs for nothing.
But how can people live without pay? How can people muster the effort needed to volunteer when they are spending every minute stressing about how to make ends meet? And is it ethical to expect people to volunteer for jobs they would willingly do, but without pay and reward?
I’ve been trying for some time to get into the police force. Time and time again there are no vacancies. But you know what? There’s a big sign on the website saying ‘Why not become a Special Constable?’ What this means, is effectively doing the same job I want to do, but for no pay. They want me to volunteer my time, deal with all the stress of a police officer role, not to mention putting myself at risk of violence, for no wage. This means they clearly need more police recruits, but funding is tight so they decide that makes it alright to ask us to do it for free.
No, no. Offer me a wage for my efforts and let me do the job properly. Give us some respect here.
The corporate bosses argue against doing their jobs for less than x-million per year. Yet they expect the lowest paid workers and the unemployed to make all the compromises for the sake of the economy, and as a consequence struggle even harder than they already do.
I’m sure some corporate bosses have opted out of recent pay rises and bonuses, or put a cap on such. But many haven’t.
If they’re not willing to make a similar compromise in line with all of us here struggling at the bottom, then they ought to be made to by an independent governing body. Selfish pricks. You want a better economy post-recession? Help us out, chaps.
The economics programme I watched which sparked off this rant of mine suggested that the boards that review corporate pay include a few too many actual corporate bosses to be a fair, unbiased system. The bosses effectively can set their own pay, and that of their peers. In this, I think regulation from outsiders is long overdue.
I do appreciate the need to keep businesses competitive in order to survive within the international markets. If Britain solely set the trend for paying people capped wages, it would be catastrophic for the country. Perhaps what we need is some sort of international treaty to oversee the corporations and make them agree to fix a cap on top salaries and bonuses. Whatever the amount each particular country can manage. An agreement could be made. It would do the job, I think.
Obviously, it goes without saying that the logistics of implementing anything of that sort is immensely difficult. But we shouldn’t underestimate ourselves. The minority of people at the top of the corporate chain think that business runs the world. It doesn’t. The workers underneath them - which is basically everybody else - greatly outnumber them, and we want to earn a decent living for the essential, if seemingly menial, jobs that we do. We can apply pressure, we can persuade governments to listen.
It’s idealistic talk, but no change happens unless you fight for it. People do it all the time. And they often facilitate real change.
At the very least, we could get things moving in this direction. It’s the only realistic way forward, for the future. Capitalism, without having constraints imposed upon it, creates massive disparity in salaries. This leads to conflict, unfairness, a misappropriation of sociological ideals, and wastes masses of money through extortionate salaries and bonuses that our economy desperately needs to get the country back in any sort of fit state to function.
Know what I’d do if I was in control of the annual budget? I’d try capping everyone’s wages at £100,000. Because:
- surely if you earn that much per year, you really don’t need anymore. What would you do with it? Nothing essential. It’s all extra. Anyone who says they wouldn’t be able to live comfortably on £100,000 is talking out of their arse.
- there would be so much surplus money from our finite resources that we could easily get out of recession, sort out the NHS so it works again, boost industry by funding a zillion new businesses and schemes to help people find or create work, make sure our elderly get enough pension money to stop them dying in cold flats.......... it just goes on.
One of the classic arguments against this, is that without higher salaries for people to aim for they won’t push themselves to achieve more. It would breed complacency in the workforce.
- Cognitive dissonance theory suggests otherwise. People doing a job as a volunteer find the experience more enjoyable than people doing the same job for money. There have been some fascinating studies into this. Without pay, people fill the deficit by finding other reasons to enjoy it. Introduce pay into the equation and people start making comparisons with other jobs and salaries. They begin to feel they should be rewarded more. This is the practical basis of what many see as healthy business competition, but we’re forgetting the human element here. Many cognitive processes affect our judgement of our own situations, including the powerful innate process of making social comparisons. This competition can breed greed. If you level out the playing field, people will fill that deficit with other reasons to enjoy what they are doing.
While the cognitive dissonance process helps everybody feel good about volunteering, for the unemployed and low-paid, it’s still offensive to request that they do this in lieu of a proper job. It simply highlights how people don’t need excessive, obscene amounts of money to persuade them to remain in their jobs.
I think it’s understandable to be wary of decreasing financial competitiveness in business, but has anyone tried it recently? I don’t think so. Perhaps it’ll work. What are the fears based on? The belief that people will become complacent once their salary reaches £100,000? Well boo hoo. If any of the very few people who earn that much become complacent, why not sack them and give the job to someone else. There’d be thousands of competent people happy to do it for that amount, and indeed a ready supply of them. The level of skilled unemployed people in this country right now negates the need to worry about compromising the quality of staff.
This means the excuse given, that is that we need to pay these enormous salaries in order to ‘keep good staff’ is fallacious. Why give in to these ridiculous demands for money? It’s madness. There is an abundance of human resources available. I won’t be bullied into falling for that. I spat at my TV when I heard that argument during the banking crisis news coverage, and it’s still bollocks.