I write yesterday about the pay at Barclays.
Then a commentator on the blog talked about the impact of a bonus cap at Barclays. I didn't agree with her calculations, but accepted her premise that Barclays need not pay more than £500,000 a year (after all, anyone, anywhere can live on that - in luxury). That would affect 1,338 people. I assumed all of them were paid the lowest sum in their income bracket - which is an absurdly safe assumption. That suggests they're paid in total at least £978 million - it's probably a lot more.
At £500,000 each they'd be paid £669 million. So that's £309 million to redistribute between 144,245 people. That's not less than £2,142 each, which for almost half those people would be a bonus of 10% of salary, and probably more.
Now who do you think deserves the bonus more?
And who do you think paying it to would benefit the economy more? Those who save it or spend it on second homes, or those who'd spend it creating new value right now in the UK?
Isn't the answer obvious?
OK, I know a flat rate of top pay would have it's problems (how would the poor dears work out the pecking order?) but this is not fantasy economics. It's the fact that so many are paid this much that is.
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It’s obvious but will not happen because it would undermine the five principles that our unequal society is based on; Elitism – we are better and worth it, exclusion – the prols can’t have the same things as us, Prejudice – the poor are poor because of their own failings and don’t deserve any more, Greed – agaian because we’re worth it and must maintain are status and,Despair – the lot of those at the bottom and translates into mental illness ( replacing Beveridge’s disease)
Very good
Well I made the very much less prudent assumption that everyone was at the top of the pay scale: the answer is perhaps somewhere between your calculations and mine. But for what it is worth this is what I did
http://thosebigwords.forumcommunity.net/?t=51300641&p=376379785
Thanks!
Mate, 500K can’t make you live in luxury. What pleb city are you living in?
500K gross works out to basically 300K net. 300K/ 12 months is basically 25K/month.
Eton tuition is 8K/kid/month. So that leaves me just 9K/month.
The mortgage left on me flat is 5K/month. That leaves me just 4K.
My mercedes costs 1K/month to keep on the road, petrol, insurance, parking, lease payments. My wife’s range rover the same.
So we’re down to 2K/month between the missues and I, or about 1K each.
How the heck can I afford puerto banus or my rio getaway with the boys?
500K aint enough for any geeza.
Joking aside, you touch on one of the thing which puzzles me most. I genuinely do not understand why ever more money is seen as worthy of pursuit. There is something wrong with these people. They have one body, the same as the rest of us. There is a limit to what that body can do, and how much money it takes to do it. There is a limit to what one mind can want, and it is obvious the rich do not have any more imagination than the rest of us. They do not buy or use different things: as your post points out they need what we all need: suitable accommodation; food; education for our children; transport; a holiday. A human being cannot buy or spend these enormous sums year on year, to get things we all need. It is impossible. They can certainly drive up the price of those things by creating artificial costs through “status” pricing. But even when they have done all they can in that way they still cannot spend it.
The plutocrats believe that everyone wants and aspires to ever more money. That is quite clearly not true. Most people would quite like to be rich, when they are day dreaming. But in practice they are fairly content with much less, as shown by the fact that they do not focus exclusively on increasing their income. They go to work (if they have work) and if they can provide themselves with a fairly modest level of comfort and security they seek only to maintain that: the rest of the time they get on with their lives.
The plutocratic conception of “homo economicus” is a theory of human nature: it is not true; it is not “science”; it is not even a plausible story. How on earth did these sadly distorted people persuade the rest of us that they have some insight into human nature, when this is all they have to offer? It may be true that it is an insight into their own nature: they need treatment, not respect
I struggle with the concept of a wage cap for a commercial organisation. BOS you could make a case for given it is taxpayer owned, but capitalism and supply and demand suggest that private organisations should be free to remunerate as they wish. you start to hit issues with differentiating between Barclays bankers and the entrepreneur who has just sold his business for more than a billion pounds to Doughty Hanson (eg Cauldwell) – should we have capped his remuneration/return as well…………as with most things, where do you draw the line.
i anticipate that many will say that Cauldwell had capital at risk and the bankers didnt, which is correct, but where do we stand on partners in big 4 or law firms, they have signifianct capital at risk and (as evidenced in the PAC) are on 7 figure salaries – is this ok, or should they also be capped?
Big 4
Capital risk?
How many were bankrupted by AA?
You think that supply and demand sets the remuneration package for those at the top end of banks etc? Even they don’t think that.