Fair pay, please

By Vincenzo Rampulla / @VMRampulla

I want a pay rise.

It’s easy to admit that reading yesterday’s Guardian and realising that there are 170 senior civil servants who earn more than £150,000 left me feeling more than a little jealous (especially when you consider that the national average wage is a paltry £21,320).

To put this in context, these civil servants earn more than the Prime Minister’s wage, with the most expensive being the Chief Executive of the Office of Fair Trading who is in the ‘respectable’ bracket of between £275,000-279,999.

Obviously we are all outraged and of course something must be done. Painfully, the coalition government says it is on the case.

But today was just a taster before they seek to publish the job titles and salaries of all civil servants earning over £58,000 next year. If you’re thinking “why are they doing this” then cabinet office minister Francis Maude popping up and rattling off something about wanting to “pull back the curtains to let light into the corridors of power” is all you’re going to get.

And it is at that point that I would say “hold on a minute”. I’m with the general secretary of the FDA union for senior servants who pointed out that “Before this goes further we need to have a serious discussion about what it is ministers are seeking to achieve”; except I’m pretty certain what it is the government is trying to achieve.

This is a massive case of doing the right thing for the wrong reasons. The coalition government is not doing this to champion transparency. It is no surprise that the Conservatives want to cut public spending and need an excuse to keep wages down or cut them.

During the election the Conservatives touted their 20:1 plan for the public sector; that the highest paid should get no more than 20 times more than the lowest paid. And they were clear that the scheme would mean that the policy was “designed to drive down high salaries rather than necessarily increase lower salaries”. Now that the election is over, Will Hutton has been appointed to lead this “commission into fair pay (sic) in the public sector“.

But it is duplicitous to call this a programme for ‘fair pay’ when the objective singly ignores the need to raise the pay of those languishing on low pay. If you look at the private sector the case for change is even greater.

If the bar for a well paid job is the Prime Minister’s salary then how do we feel about the finance director of Gregg’s earning £260k? When we consider that the ratio of pay in the private sector is as much as 80:1 or more then why have the government not appointed the chair of a private sector fair pay commission?

Typically, the government (of this current hue at least) is making a misguided distinction between the private and public sectors, instead of treating them the same. The public sector has benefited from pulling in expertise by offering roughly comparable wages to the private sector. But the private sector has been allowed to accrue a ridiculously top-heavy salary structure.

When it comes to pay we need to go back to first principles. The strength of public anger was palpable when ordinary people realised what bankers in the city paid themselves in bonuses. The calls for windfall taxes and caps of bonuses were unanimous. And the minimum wage was only ever supposed to be an unbreakable legal floor for pay.

So between the criminal and the down right greedy there is the unfair, yet nobody is certain yet how to define it. I’d like to earn £100k+ and be able to buy that Ferrari I’ve always wanted but the key word has to be ‘earn’. Who am I to say that the Finance Director of Gregg’s isn’t worth every penny of his £260k, but is that wage really justified even if it is just on the basis of the ‘going rate’?

I wish Labour in government had done more to tackle the incredible disparity between those who struggle on that minimum wage and those that count their salaries of 6 or more digits. But I’ll settle for a proper fair pay commission now and some real ideas of making pay fairer.

This post was also published on the Young Fabians’ blog.