Top to bottom: understanding fairer pay
- Document type
- Corporate author(s)
- High Pay Centre
- High Pay Centre
- Date of publication
- 4 March 2013
- Trends: economic, social and technology trends affecting business, Management & leadership: including strategy, public sector management, operations and production
- Business and management
- Material type
This report highlights that even a modest level of wealth redistribution could make a substantial difference to the standard of living for low-earners, and would not be greatly missed by those at the top. For example, 10% redistributed from those earning £150k+ (about 0.9% of the population) to the bottom 25% would equate to an average 55p per hour pay rise.
Other key findings of the report include:
- The share of national income going to the top 1% of the income distribution has more than doubled since 1979 to 14.5% from 6%.
- There are 29,000 people in the UK (the top 0.11% of the income scale) who earn more than £500,000 a year. They already take home £21,500 a month after tax. That is more in a month than someone on an average salary earns in a year (£20,500, after tax). And the government is about to give a tax break worth up to £2.7 billion to the top 1%when the 50p rate is abolished in April, so take home pay for the rich will become even more disproportionate.
- There are 6.75 million people (the bottom 25% of earners) who take home less than £800 a month. Five million of these are full-time employees.
- Wages for most of the population have stagnated, barely keeping up with inflation.
- If those earning more than £150,000 took a 10% pay cut and it went directly to the bottom 25%, they would get a 55 per hour pay rise to £7.35, taking them closer to the national living wage of £7.45.
- If those earning over £300,000 (the top 0.25%) gave up 10 per cent of their pay, the lowest paid 25% would get a rise of £40 a month.
- These changes would not be fiscally neutral, but would inject some spending power into the economy at the bottom, where it is needed.
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