by Callum Anderson
Living standards for millions of hardworking people across the UK remain squeezed. By the end of 2017, British workers’ pay packets were still £15 a week below their pre-financial crisis levels; the Resolution Foundation predicts that pay won’t fully recover until 2025.
At the same time, bosses of the FTSE 100 earn on average 94 times more than the average employee. In too many cases, these sometimes astronomical levels of pay bear no relation to either personal or company performance.
Indeed, the first Thursday of 2018 was known as Fat Cat Thursday – where the average FTSE 100 chief executive had already been paid what it would take the typical UK worker an entire year to earn.
The sheer magnitude of this income inequality should worry all in society. In an era of economic uncertainty and instability – characterised by stagnant wage growth, job insecurity and depressed levels of business investment – Labour must offer an ambitious package of genuinely bold economic reforms that promote an inclusive, collaborative brand of UK capitalism.
One important feature of this should be to promote the use of profit sharing.
Enshrining the principle of profit-sharing – whereby a company apportions a percentage of annual profits as a pool of money to be distributed among the workforce – into our economy would reinvigorate British workplaces by ensuring that a share of their company’s rewards are also passed onto all members of the workforce who helped generate success and not just management and shareholders.
