Just Wage FAQ

Why support a Just Wage? Frequently Asked Questions

Q: Is this about overpaid fatcats?
A: No, it's about proportionality, sustainable and responsible financial stewardship, transparency, justice and addressing the fact that income gaps contribute to social problems from crime to mental illness.

Q: What’s wrong with wide income gaps?
A: Income inequality leads to worse outcomes for every member of society. Everything from health to child well-being to violence is worse in unequal societies. The evidence for each of these and more can be found at The Equality Trust’s website: http://www.equalitytrust.org.uk/why/evidence

Q: Why a 1:5 ratio? Why not 1:4 or 1:6?
A: We don’t believe this is the optimum just ratio, but it is a compromise between some currently used in the UK and what might seem a reasonable ratio to the average person. We advocate a 1:5 salary ratio within organisations generally, but in the case of trades unions, we advocate the highest paid union employee being paid no more than 5 times the lowest paid member. We believe this is important for linking the grassroots membership with officials and administrators and reflects the nature of the union as a social justice organisation. We also believe that 1:5 is reasonably adoptable across all sectors, including those with very different types of work within them.

Q: Why are you picking on trade unions?
A: We definitely don’t aim to undermine trade unions, we believe strongly in human rights at work and democracy in the workplace. We also believe that the national administration of trade unions are in the ideal position to set an example of taking a social justice approach to wages. If they don’t, who will?

Q: Does anyone already use a salary ratio system?
A: Some example ratios currently in practice:
Senior permanent civil servants have published salaries (2009) which work out at a ratio of about 5:1 ( highest £273,250, lowest £57,300)
The Ecology Building Society uses 5:1
The Religious Society of Friends (Quakers) uses 4:1 at their administrative centre.
The Church of England uses 3:1 for clergy (2008 figures: archbishop £68,740, local vicar £21,600)
The typical amount that can be borrowed for a mortgage three years after the beginning of the credit crunch: 3:1 (3 times the borrower’s salary)
A typical FTSE 100 company director earns 133 times the average salary.

Q: What is the average salary in the UK?
A: £24,000.
80% of us live on less than £35,000 per year.
Unemployed people on benefit have to live on £3,340 to cover food and travel.
The average house price in the UK (April 2010) is £168,521 (7x the average salary) and the London average is £336,409 (14x the average salary). Again, mortgage lenders usually only loan up to 3x the borrower’s salary.
Fewer than 10% of us make than £100,000.

Q: Why a ratio rather than a cap on the highest salaries?
A: A ratio puts the focus on the lowest earnings within an organisation. We want to raise awareness about the fact that six-figure salaries and non-livable wages exist within the same organisations and even workplaces.

Q: Are you in favour of a maximum wage?
A: Yes. The extremely high payments being taken by people like FTSE 100 company directors increase social divisions and other social problems mentioned previously.

Q: Aren't pay differentials unjustifiable when we all have similar material needs for shelter, food etc?
A: Our stance is that pay differentials are both a cause and a symptom of an unjust society. The ratio campaign is one step in addressing one damaging aspect of our society and economy.

Q: What do you mean by 'low wages'
A: 22% of us live at or below the poverty line (£14,040 for a family with 2 children) (http://www.poverty.org.uk/summary/key%20facts.shtml).
Minimum wage is £5.80 (less than £13,000 per annum), which is not enough of a wage to keep people out of poverty even when topped up by benefits and tax credits.
A ‘living wage’, which would provide a minimum acceptable quality of life and doesn’t have to be topped up by in-work benefits is (2009 figures) £7.14 and £7.60 in London. (see http://www.minimumincomestandard.org/livingwage.htm,
http://www.church-poverty.org.uk/campaigns/livingwage/ and
http://www.london.gov.uk/mayor/economic_unit/docs/living-wage-2009.pdf)
In 2009, 3.9 million people in Britain aged 22 to retirement were being paid less than £7 per hour. 2/3 of these were women. (http://www.poverty.org.uk/51/index.shtml#num)

Your salary affects your pension, your lifestyle and even your life chances. In Britain in 2010, over 20,000 people die every year because they cannot afford to properly heat their homes. A 2001 report on low pay in East London found cleaning staff working as much as 60 hours per week and still getting less than a living wage .
(http://www.geog.qmul.ac.uk/livingwage/pdf/mappinglowpay.pdf)
For more examples of the many ways a low wage affects people on a daily basis in every aspect of their lives, see:
http://fairpaynetwork.org/?page=low_pay_victims
and ‘Hard Work: Life in Low-pay Britain’ by Polly Toynbee.

Q: I spent 5 years at University, don't I deserve to be paid more than someone without a degree?
A: Does that 5 years really justify being paid several times more than someone else? Aren't their needs the same as yours?

Q: I worked hard to get to a senior position and I deserve to be paid more.
A: Again, it's about proportionality. If you're honest with yourself, does that work justify an extra £100K/2Million/10Million above other people in your organisation? Do you work 200 times harder than the people who clean your office and toilets at 5am every day then go home to care for their children for no pay at all?

Q: If senior people don't get paid more, there will be no incentive for people to work harder.
A: Is a salary increase the only reason you do your job well? Again, see the answer above.

Q: Why do you want to prevent people from being rewarded for success?
A: See previous two answers. Are the successes of a barrister worth 5 times the successes of a teacher?

Q: If we don't pay a six-figure salary, we won't attract the best people into our senior roles and succeed in a competitive market.
A: Where do these myths come from? Have you ever met your organisation’s CEO? Do you really think their job is so hard that they must be 5x or 10x more of a genius than you are?

Q: Shouldn't redistribution of income come from taxes?
A: There are two commonly practiced approaches to income redistribution, one is through taxes before it gets to your pocket as done in Sweden, the other is capping your salary in the first place as done in Japan. We believe it should come through both, though we believe in grassroots social change first and foremost...

Q: Do you think that ratios and caps should be enforced by law?
A: No, we believe in social change through reason, free choice, public pressure, peer pressure and government incentives as a sweetener.

Q: Does the salary included in the ratio include incentives such as bonuses and expense accounts?
A: Yes.

Q: Will people support this campaign?
A: Yes, for moral reasons, for ethical and practical reasons because wide pay gaps harm society, for reasons of controlling budgets within their own organisations, and ultimately for reasons of consumer/donor and peer pressure.

More information on fair pay and income inequality can be found at:
www.onesociety.org.uk
www.equalitytrust.org.uk
http://www.church-poverty.org.uk/campaigns/closethegap/closethegap
http://www.londoncitizens.org.uk/livingwage/index.html
http://www.poverty.org.uk/
http://justwage.blogspot.com