If Barclays capped pay at £500,000 everyone earning less in the bank could have a pay rise of more then £2,000 a year

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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.