By Charlie Kimber
Downloading PDF. Please wait... Issue 2808

Bankers’ bonuses rise six times faster than wages

It will take resistance to stop the Tories and bosses grabbing millions while workers suffer pay cuts
Issue 2808
At a cost of living protest

At protest over the cost of living crisis in central London earlier this year (Picture: Guy Smallman)

Bonuses in the City, the heart of London’s banking district, are at a record high and rising more than six times faster than wages. The TUC union federation said its analysis of official data shows bonuses in the financial and insurance sector increased by 28 percent over the last year. That’s compared with 4.2 percent for wages—and those wage figures are distorted by the big gains for those at the top.

Analysis by the Institute for Fiscal Studies shows that those who were paid the most to begin with secured the biggest pay rise over the last two years. In the latest quarter, pay grew fastest in finance and business services,

The average bonus in the finance and insurance sector rose from £3,146 in the first quarter of 2021 to £4,021 in the same period this year. City bonuses in March 2022 were worth a total of £5.9 billion.

TUC general secretary Frances O’Grady said, “There is no justification for such obscene City bonuses at the best of times, let alone during a cost of living crisis. While City executives rake it in, millions are struggling to keep their heads above water. Working people are at breaking point, having been left badly exposed to soaring bills after a decade of standstill wages and Universal Credit cuts.

“Ministers have no hesitation in calling for public sector pay restraint, but turn a blind eye to shocking City excess. It’s time to hold down bonuses at the top, not wages for everyone else.”

The TUC rather weakly called on the government and companies to tackle the bonus culture and high executive pay. It wants them to introduce maximum pay ratios so that bonuses are no more than 10 percent of total pay.

A culture at the top of corporations and government gave a green light for P&O ferry bosses to sack 800 workers without warning. Bosses aren’t going to suddenly adopt the ethics of Robin Hood unless they are forced to. That means a big turnout on the 18 June TUC demonstration and, crucially, a lot more strikes.

Struggle needed to revive union membership  

After four years of small increases, the number of workers in trade unions fell last year. The proportion of employees in Britain who were trade union members fell to 23.1 percent,  down from 23.7 percent in 2020. This figure was 32.4 percent in 1995

The government’s official data release said, “This represents the lowest union membership rate on record among UK employees for which we have comparable data (since 1995).” 

The fall in membership by 62,000 on the year meant there were still 6.44 million trade unionists in 2021. Pandemic disruption and long-term working from home made it harder to recruit and organise in some sectors. 

But there are also factors that have been around for years. Unions have a problem with recruiting low-paid workers. Membership is just 12 percent of those earning less than £250 a week. When every penny counts, you need to be sure your union subs will mean improvements and workplace protection. And too often they don’t.

Membership is at 22 percent of those earning between £250 and £499 a week, and 30.4 percent for those on between £500 and £999. It’s at 18.2 percent for those collecting £1,000 and above.

Unions are also struggling to recruit young workers. Just over 4.3 percent of trade unionists are aged between 16 and 24 while 41.1 percent were aged 50 or older.

Following a longer term trend, 50.1 percent of workers in the public sector are in unions, 12.8 percent in the private sector. It is a basic truth that struggle builds unions. The lack of big national strikes leads to fewer activists involved and less motivation for workers to join unions. 

The recent rise in struggle, still limited, gives the chance to build bigger and more militant unions. This should be seized. But it’s also true, as some recent unofficial strikes showed, that important battles can happen whether unions are formally in unions or not.

Sign up for our daily email update ‘Breakfast in Red’

Latest News

Make a donation to Socialist Worker

Help fund the resistance