Cap excessive salaries to save jobs during pandemic, urge think tanks
Excessive salaries should be capped to raise wages for lower-paid workers and to help save jobs, according to a new report.
Think tanks Autonomy and the High Pay Centre called on the Government to take action, suggesting that a maximum wage of £100,000 could redistribute money equivalent to more than one million jobs.
If only the top 1% of earners were targeted then nine million low and middle income workers would have their wages boosted, said their report.
Mass lay-offs would not be necessary during the current virus crisis if the very rich were paid a little less, it was suggested.
Let’s be honest - earning anything more than £100,000 a year is by most people’s standards extremely excessive, especially during an economic crisis where millions are being made unemployed
A minimum wage of £10.50 an hour could be achieved if a salary cap of £187,000 was introduced, affecting the top 0.6% of earners and giving pay rises to more than three million workers, research indicated.
Autonomy also released new polling which it said showed public support for the introduction of a maximum wage cap of £100,000.
Will Stronge, of Autonomy, said: “A maximum wage is popular with the public and could be an essential tool for making sure that industries and those that work in them survive this pandemic.
“Let’s be honest – earning anything more than £100,000 a year is by most people’s standards extremely excessive, especially during an economic crisis where millions are being made unemployed.
“If income was distributed just a little more fairly, you could still have high salaries but with much higher employment and higher average wages too.”
Luke Hildyard, director of the High Pay Centre, said: “Tolerating the vast gaps between those at the top and everybody else in this country is a far more extremist policy than putting a cap on annual earnings of £200,000 – enough to enable a lifestyle of absolute luxury compared to the vast majority of the population, and a perfectly sufficient reward for doing a difficult or demanding job.
“With the UK economy likely to be much smaller than previously envisaged for the foreseeable future, we urgently need to think about sharing the wealth we do have more evenly.”