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Crisis gives more cream to fat cat billionaires

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Issue 2535
Are the rich sinking? Oh no theyre yacht
Are the rich sinking? Oh no they’re yacht (Pic: Wikimedia Commons/JanManu)

Revelations about how much bosses are creaming from workers caused outrage on “Fat Cat Wednesday” last week. 

By midday last Wednesday, they had raked in more than a workers’ average annual salary (see below).

But bosses’ rocketing pay is just one example of how the super-rich are doing well out of the global crisis. Sales for planes, yachts and fancy cars surged last year.

Luxury car manufacturer Bentley’s sales were up more than 40 percent—largely due to its new Bentayga model, marketed at £160,000. 

The super-rich spent over £2 billion commissioning “superyachts” in 2015 and bought 254 last year, up from 184 in 2010.

Bentley’s not doing too badly out of its new Bentayga

Bentley’s not doing too badly out of its new Bentayga (Pic: Matthew Lamb)

Despite the scaremongering around Brexit, Britain’s capitalists have been able to protect and grow their fortunes.

Fifteen of Britain’s wealthiest lost a staggering £4.3 billion in the wake of Brexit last June.

But what’s more staggering is that they had largely recouped their losses within three months.

The initial hit was largely because many rely on the City of London financial district.

Some 14.3 percent of what are known as “high net worth individuals” get their money from banking. 

When their friends gamble on the market, their wealth can be hit by sharp but often short term fluctuations.

But British bosses still have access to key European Union markets to boost their profits and wealth.

The FTSE 100 index of top firms recovered after just two days of trading after Brexit.

The FTSE 250 index, which is made up of more British-based firms, was back to normal after just over a month.

This didn’t stop right wing rags bemoaning how the rich had lost out since the 2008 credit crunch.

When the last Sunday Times Rich List was published last April, it claimed that Britain’s super-rich had been worst affected by the crisis.

But just focusing on a few individual capitalists who may lose out in the short term doesn’t give the full picture.

With competition at capitalism’s heart, new capitalists can rise to the top and push others out.

But the list still includes a range from the landed aristocracy’s old families to new bankers and hedge fund managers.

Before the crisis in 2005 the wealth of those on the rich list stood at £250 billion, not counting what’s in their bank accounts.

Some ten years later—after one of capitalism’s biggest crises—it had more than doubled to £547 billion.

Indeed, the richest have seen their wealth soar since the beginning of the century while workers have lost out.

The top 1 percent have grabbed a quarter of the £4 trillion that was added to national wealth since 2000—wealth that workers made.

It’s time we commandeered the superyachts and threw the rich overboard.

‘We’re worth it!’ say bosses who swipe 129 times more money than workers

Thats rich! Top boss Martin Sorrell

That’s rich! Top boss Martin Sorrell (Pic: World Economic Forum)

Billionaire boss Sir Martin Sorrell boasted that he is “worth every penny I’m paid”.

He batted off criticism at the CBI bosses’ conference last year, bragging that if it’s a crime to be successful, he’s guilty.

As head of PR firm WPP, his total remuneration is worth some £70 million.

Sorrell is just one of many bosses who have continued to see their total income increase despite the crisis.

According to the High Pay Centre think tank the average FTSE 100 boss grabs more than £1,000 an hour.

That means that they surpassed the UK average annual salary of £28,200 by midday last Wednesday.

The typical fat cat will “earn” 129 more than their workers. In reality, the gap is likely to be worse.

Calculations for the average salary are based on “average income”, which is skewed upwards because it includes the pay of top bosses.

According to the Office for National Statistics the actual average income of households with two adults is £23,556.

Across the year the average pay of a FTSE 100 boss works out at around £5.48 million—401 times that of a worker on the minimum wage.

That’s 172 times more than a nurse’s pay and 145 times more than a teacher’s pay.

In contrast to the bosses, workers’ pay has stagnated since the crisis began.

Between 2007 and 2015 real wages—taking inflation into account—fell by 10.4 percent in Britain.

The only country within the OECD rich nations’ group that has seen a sharper drop in workers’ wages is Greece.

It has suffered a more profound crisis and the European Union has imposed brutal austerity on ordinary people there.

Ongoing public sector wage freezes have contributed to the gap between rich and poor.

The situation isn’t much better in the private sector.

There, bosses have tried to keep pay down partly to avoid sacking skilled workers.

The average wage rise in the private sector was just 1.3 percent in 2016.

Ben Willmott from the bosses’ Chartered Institute of Personnel and Development has warned that workers will be even worse off this year.

“Higher inflation in 2017 will mean many workers will face a pay squeeze at a time when FTSE 100 CEO pay is already 129 times that of the average employee,” he said.

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