After much political wrangling a long-awaited and groundbreaking provision relating to pay ratios has just been approved by the US Securities and Exchange Commission. This modest proposal requires publicly listed companies in the US to disclose the ratio of CEO pay to the median income of all other employees. It is perhaps a surprise that this pioneering move has arisen in the most unequal of all developed countries but then the US knows it has a serious problem and even the “winners” in the game are getting worried.
Apart from the practical benefits, pay ratio disclosure carries with it huge symbolism. Recognising that the pay of those at the top is connected to those in the middle is no less than a major step towards a more civilised society (although linking top pay to the lowest paid would have been even better as this would show us which companies regard their low-paid staff as nearly worthless and then we could avoid using their products and services). But however it is done, pay ratio disclosure tells the world that people are connected, that we do not – and cannot – live as atoms or islands and that, in essence, we care about each other and how we are all getting on.
We now need to play catch-up with the US in legislative terms but it is possible for all of us to take action now around pay ratio disclosure via the Pay Compare campaign which is currently focusing on big business and football via its #FairFTSE and #FairFooty campaigns. Material division creates social division and shining a harsh light on vast, unjustifiable pay gaps is an essential step towards repairing our torn social fabric. When the British public is routinely made aware that large numbers of their neighbours and fellow citizens are valued at only a fraction of others they will increasingly demand an end to such grotesque unfairness.
Bill Kerry, Supporters and Local Groups Manager