The High Pay Centre’s ‘High Pay Day’ research, published this week, is evidence that the government must rebalance the economy after Covid-19 to make it fair, says the TUC.
High Pay Day is the day in 2021 on which the typical FTSE 100 chief executive has already earned the same as the average wage for a whole year.
The research finds that top bosses earn around 120 times the annual pay of the average worker.
High Pay Centre’s research suggests that the median FTSE 100 CEOs earnings for 2021 surpassed the median annual wage for a full-time worker in the UK at around 5:30 pm on Wednesday 6 January.
The calculations are based on our previous analysis of CEO pay disclosures in companies annual reports, combined with government statistics showing pay levels across the UK economy.
HPC estimate that with CEO pay levels remaining essentially flat in their analysis, while pay for UK workers had increased slightly, it means that CEOs have to work 34 hours of the year to surpass median earnings, rather than just 33 hours in 2020.
However, the most recent figures on CEO pay and UK full time workers’ annual earnings is still too dated to fully account for the impact of the coronavirus – therefore it remains to be seen how this has affected pay gaps across the UK, both over the duration of the pandemic and in the longer term.
Pay for top CEOs today is about 120 times that of the typical UK worker. Estimates suggest it was around 50 times at the turn of the millennium or 20 times in the early 1980s.
Factors such as the increasing role played by the finance industry in the economy, the outsourcing of low-paid work and the decline of trade union membership have widened the gaps between those at the top and everybody else over recent decades.
These figures will raise concern about the governance of big businesses and whether major employers are distributing pay in a way that rewards the contribution of different workers fairly. They should also prompt debate about the effects that high levels of inequality can have on social cohesion, crime, and public health and wellbeing.
TUC General Secretary Frances O’Grady said: “This tells you everything you need to know about how unfair our economy is.
“Our army of minimum wage workers – carers, shop assistants and delivery drivers – have kept the country going through the pandemic. Not these CEO’s at the top raking in far more than their share.
“We must make the economy fair. If the government is serious about levelling up Britain, it needs to start by levelling up pay and conditions for those we most rely on, and stop the threat to freeze key workers’ pay.
“Ministers must bring forward the long-awaited employment bill to end expoitative working practices like zero hours contracts, and boost rights and pay.”
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