Inequality: what price a banker?

As a public policy issue of note in mainstream Australian politics, inequality has exited (stage right!) in recent years. It remains one of those elephants in the room that is seemingly too big, too controversial, and just plain too difficult to tackle head on.

Consider the hectic Rudd and Gillard years since 2007. Amidst a period of uncomfortable vacillation on climate change, the cutthroat machinations surrounding the leadership of Federal Labor, and of course the formation of Julia Gillard’s minority government, I guess we really shouldn’t be that surprised that inequality has not figured prominently on Labor’s agenda-setting radar. It’s obviously not an issue that Abbott’s retrograde Coalition are concerned by, and while its probably fair to conclude that Labor is concerned about it, Team Gillard are still wrestling with much of the same sack of policy vipers that they were when they were called Team Rudd earlier this year.

Perhaps it is a function of the Con-Dem(n) age of austerity here in the UK or the sharp contrast that exists between “the City” and the rest of the economy, but inequality is getting some serious mileage in the British media at the moment. In Britain, inequality even has a public visage; a target. In case you didn’t know, inequality personified is a middle-aged, preferably portly (but jackal-like will suffice) man in a business suit, who works in management or in the financial sector in London. We might well call him “Inequality Man”. He is just the sort of person who not only has a football star salary, but can credit the loosely regulated, now part-nationalised banking sector for the lion’s share of his wealth. It is this “cross-over” that makes “Inequality Man” such a potentially effective pawn in the fight against economic unfairness.

Those unfortunate people who were hit hard by the GFC, or have a friend or a family member who was, may not care too much about inequality, but it’s a sure bet they can see the economic justice inherent in the sorts of salaries that management and financial sector professionals are still pulling. Danny Dorling, Professor of Human Geography at Sheffield University, provided a timely reminder in The Observer a week ago of just how the average salaries of different professions has changed in the UK between 1980 and 2009. The evidence suggests that the pie is getting bigger, with (for example) the average salaries of cleaners rising from £4,503 in 1980 to £31,807 in 2010 (~706% increase), nurses from £5,044 to £29,431 (~583% increase), and teachers from £6,505 to £35,121 (~539% increase). Most people who would consider themselves “of the left” would contend that these salaries should be higher still, but when it comes to inequality, the real problem is the comparative increase in salary for corporate executives. The average salary of a FTSE 100 CEO is £4.9 million, up from £85,000 in 1980, which represents a somewhat extraordinary 5765% increase.

Dorling, also author of Injustice: Why Social Inequality Persists, asks the obvious question about value for money for society:

Why should an excellent brain surgeon receive “only” 0.5% of a top banker’s income? At the peak of excess a top banking boss can receive £40 million in renumeration. 0.5% of that income is a salary of £200,000 a year, which is just about the possible range of top surgeons’ salaries. You can have 200 excellent brain surgeons, and quite a few more average ones, all for the cost of a single man in a suit running a large bank in Britain.

It remains to be seen whether or not Labour leader Ed Miliband will take the bait on this issue – but its hard to believe that the majority of people would not agree that some form of action is warranted. To what extent can we say the same about the situation in Australia?

Cross-posted at Larvatus Prodeo.

2 thoughts on “Inequality: what price a banker?

  1. That is what is implied I think, but I think there are probably different ways to frame inequality that would make it an issue that everyone was interested in.

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