WORKERS IN the United Kingdom are taking home £60 billion less each year than they did more than 30 years ago, says a Trades Union Congress report, amid mounting anger about the £1m bonus for Royal Bank of Scotland chief executive Stephen Hester.
In 1978 the total UK wage bill represented 58 per cent of gross domestic product, but by 2011 this had fallen to a 53.8 per cent share, costing workers £1.3 trillion, according to the report, All In This Together.
Drawing on official figures, the TUC report argues that the losses have affected the poorest one-fifth of workers most of all, as their wages are 43 per cent lower than they would have been if their share had remained the same.
Workers on middle incomes have experienced a 36 per cent wage loss, while the richest fifth have had a wage loss of just 6 per cent, leading to a situation where a greater share is now held by those whose incomes come from investments.
Workers in the UK, argues author and academic Stewart Lansley, “are at risk of a near-permanent lowering in the pattern and nature of their working conditions, with disastrous potential consequences for our future economic health”.
“The only group of workers immune from the UK’s shrinking wage pool have been top executives who have weathered the recession and stock market falls to receive median pay increases of 10 per cent in 2010 and 17 per cent in 2011.
The TUC said: “The fact that those at the top have been taking an ever greater share of the UK’s shrinking wage pool explains the frustrations people have about excessive pay that politicians are only just starting to consider.”
Its general secretary Brendan Barber said: “Over the last three decades workers have become more productive and yet they have been rewarded with an ever smaller share of the wealth they’ve created.
“The tens of billions of pounds that workers miss out on each year has been papered over by rising credit card bills and a housing boom, but the financial crash has brought home the reality of our shrinking wage pool to millions of workers and their families.”
The TUC, producing a simple guide for its members, argues that a worker who is today earning £20,000 would be earning £31,300 if the rate between wages and gross domestic product had stayed the same, “an effective pay rise of over 50 per cent”.
Meanwhile, the Tory/Liberal Democrats coalition remained under pressure over the decision of the RBS board to award Mr Hester a deferred share-bonus valued in today’s terms at just under £1 million.
Insisting that the cabinet could not overrule the RBS board, work and pensions secretary Iain Duncan Smith said there would have been “chaos” if it had attempted to do more.
The government, he said, has ensured that cash bonuses above £2,000 are banned, while it also succeeded in ensuring that Mr Hester’s bonus was half of what it was in 2010.
So far, Mr Hester has remained silent, though pressure on him not to take the bonus has increased with the decision of RBS chairman Philip Hampton not to take the £1.4 million deferred shares-bonus awarded to him.
Since joining RBS, Mr Hester has earned £35.54 million in actual pay, pensions, and deferred benefits. In 2008, he was awarded £4.99 million in restricted shares, pay and bonuses. In 2009, his package was worth £6.9 million.
Two years ago, he received a package of £8.16 million. Last year, the total was £8.08 million, including an incentive plan worth £4.8 million if targets are met, a bonus of £1.66 million and salary and pension contributions.
