20:1 wage ratios are the solution we need

the news, if you can call it that, as we are all already blatantly aware of the extreme inequality and working poverty in the uk this week, that the median annual pay of a ftse 100 boss is on average 167 times more than a worker on a median salary, only further demonstrates the disgusting nature of this version of capitalism. one of the reforms we need to help solve this solution we need comes in the form of 20:1 wage ratios.

let's start here - why is this a problem first of all?

looking at the gini coefficient, which measures inequality, where a score of 0 means everyone has an equal income, and a score of 1 means one person has all the money, the uk scored 0.62 in 2017, which really isn't great. as well as this, the top 1% has 21% of all income, and the top 10% has over 50% of income. but saying this doesn't really mean anything - in nearly every society there is going to be an income hierarchy. this inequality is an issue in the uk because the people at the bottom are suffering - poverty is rising, with it being predicted that 5 million children will be entering 2020 in poverty. additionally, in-work poverty is increasing, with even 55% of homeless people being in work and 60% of people in poverty being in work. so this inequality is not just a wage hierarchy, it is one that is causing extreme levels of poverty and suffering, levels which we should not be seeing in the 21st century in the 9th richest country in the world.

as well as the damaging consequences of this level of inequality, it is also abhorrent ideologically. wage hierarchies give people ambition and inspiration, though the level of inequality in the uk means that the wage hierarchies are causing exploitation and poverty.

additionally, companies cannot function without their lowest paid workers. whether they are cleaners, sales assistants, waiters and waitresses or truck drivers, these roles are all vital to the running of a business. saying this, the top positions of companies are also vital - where would a company be, for instance, without a ceo or founder of said company?

though a ceo probably deserves their income, a production worker also deserves an income high enough to keep them and their dependants out of poverty.

this level of inequality is completely unjust and unfair. we need to make wages fair - not equal, fair.

and that is where the 20:1 wage ratio comes in.

20:1 wage ratios are quite simple - all it means is that the highest paid worker of a company cannot be paid any more than 20 times the salary of the lowest paid worker of said company. they used to be used in the 1920s, and even the famous lefty, trade union championist david cameron supported them!

portugese prime minister antonia costa has made a brilliant example which all eu nations should follow - that where if you give workers rights and good wages, the rest will follow. in his words, “we devised an alternative to the austerity policy: focusing on higher growth, more and better jobs, and greater equality. the rise in earnings made economic operators more confident, resulting in the fastest economic growth since the beginning of the century and it has produced a sustained rise in private investment, exports, and growth.”

20:1 wage ratios would solve so many socio-economic issues we see in the uk today. minimum wage increases are great, but businesses often look to cut down their spending elsewhere, leading to buying worse-quality, unsustainable and even more unethically sourced goods to solve this. whereas, the 20:1 wage ratio supports balancing out the incomes themselves to make the system fairer.

when income inequality is causing the catastrophic levels of poverty we are seeing in the uk today, it is not creating inspiration, aspiration or encouraging social mobility. it is causing children to be malnourished and unable to concentrate in schools. it is causing the exploitation of workers who are unable to heat their homes. this level of inequality and its consequences on the lowest paid workers is absolutely disgusting, and unfortunately, the greed of capitalism means that we have to implement policy to allow everyone to live and not survive.