The research shows stark comparisons between the bonuses of bankers and the salaries of workers in low paid jobs.
Since the financial crash of 2008, the bonuses of bankers in the City of London have risen twice the speed of the wages of workers, new research has revealed.
Analysis by the TUC shows that in Britain the average bankers’ bonus is worth almost two thirds of an average worker’s pay. The trade union body said bonuses in the insurance and finance sectors are worth an average £20,000 a year – the highest level on record, and more than the total annual earning of a full-time worker on the minimum wage.
The research shows some stark comparisons between the bonuses of bankers and the salaries of workers in low paid jobs. The average City banker takes home a bonus worth 145 percent of a teaching assistant’s median annual salary. In bonuses alone, they pocket 115 percent of a full-time minimum wage workers’ yearly wage, and 65 percent of an average nurse’s pay.
In cash terms, average bonuses in the City have doubled since the crash of 2008, which was caused by financial deregulation, and was the most serious financial crisis since the Great Depression. According to the analysis of government figures, bankers’ bonuses have grown 2.6 times as fast as wages.
‘No justification’
The TUC slammed the government’s plans to lift the cap on bankers’ bonuses in the City. Under the current cap on the bonuses of bankers, an employee cannot receive a bonus that exceeds 100 percent of their annual pay. If there is approval from shareholders, the cap can be no more than 200 percent of annual pay. The cap was introduced by the European Union to curb excessive risk taking after taxpayers had to bail out lenders in the worldwide financial crisis.
However, in September, the now former chancellor Kwasi Kwarteng, announced plans to scrap the cap, promising an ambitious deregulation of London’s financial sector in a bid for growth.
The announcement sparked widespread censure for helping the wealthy during an economic downturn.
TUC general secretary Frances O’Grady accused minister of “holding down the pay of millions of key workers, while lining the pockets of City financiers”.
“There is simply no justification for lifting the cap on bankers’ bonuses – especially when nurses and teaching assistants are having to use food banks to get by.
“The City is already a millionaire’s playground. It doesn’t need another helping hand from the Conservatives. Ministers should be clamping down on this greedy bonus culture by putting workers on company pay boards and introducing maximum pay ratios,” the TUC leader added.
Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward
Image credit: Pexels – Pixabay
To reach hundreds of thousands of new readers and to make the biggest impact we can in the next general election, we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 124 people to donate to hit the target. You can help. Donate today.