I'VE just returned from the Davos World Economic Forum, which
brings together politicians and the global elite. Almost everyone
who has a private jet was there. While this has always been the one
week of the year when company leaders like to show their social
conscience, it is interesting to see how many see inequality as
something that is holding back growth and even destabilising the
Oxfam's finding that the richest one per cent own almost half
the world's wealth recently caught the headlines but, according to
the Equality Trust, the richest 100 families in the UK have seen
their combined wealth increase by at least £15 billion since 2008.
The UK's current richest 100 people have the same combined wealth
as 30 per cent of UK households.
Recognising the problem is only the first step. There are no
signs of trends being reversed. Top directors now earn 175 times
the average worker's salary - up from 45 times in 1998. And one in
five workers is paid below the living wage.
I was a member of Dr Sentamu's Living Wage Commission. He is
right when he talks about "Making work pay" being an empty slogan
for millions of people who cannot make ends meet. He is right to
draw attention to those who are forced to work two or three jobs to
put food on the table, while the UK taxpayer picks up the bill - in
tax credits, in-work benefits, and decreased demand in the
While it is good that the economy is growing again, millions
have been locked out. Good jobs, destroyed in the crash or lost
through spending cuts, have too often been replaced by dead-end
jobs, zero-hours contracts and low-paid, bogus "self-employment".
Too many - especially the young - are in jobs that do not use their
skills and talents to the full. And I worry that, however long it
takes growth to get the numbers back to where they were, we have
not learned the real lessons of the crash, and are instead building
a permanently unequal society.
This is not just about gaps in income and wealth, but in status
and worth. There is a new divide between those who have good,
fulfilling jobs with decent pay, and a growing group of the
permanently precarious, left out and left behind.
This, as some of the more thoughtful business people I met in
Davos now acknowledge, is not the basis for a cohesive and
economically successful society. We should see the economic crash
not as a blip, but as the spur to build a new, more equal society.
At its heart must be stronger wage growth, particularly for those
at the bottom. This would give businesses confident customers with
some money in their pockets. Of course, no one can predict ex-
actly how the economy will develop, but making reduced inequality
as much an aim of economic policy as jobs, growth, and living
standards sets the right objective.
We can easily identify some initial steps. First, bolder
increases to the minimum wage, and an increased commitment to the
living wage from employers, in both public and private sectors, so
that their own staff, and those in their supply chains, have a
decent standard of living. Employers in many sectors can afford to
pay more without job losses. That is why we need to find new ways
for employers and unions to work together, to set higher legal
minimum wages, agreed at a sector level by modern wages
Second, we must give workers a stronger voice by extending
collective bargaining. Even the International Monetary Fund (hardly
a trade union mouthpiece) says that collective bargaining can
increase wages for ordinary people.
And, crucially, we need workers to sit on company boards and
remuneration committees, to tackle the issue of soar-away executive
pay. A real recovery would ensure that everyone got a fair
Now is exactly the right moment to combine the traditional moral
arguments against excessive inequality with the new economic case
for sharing wealth and income more fairly.
Together, they should make an irrefutable argument.
Frances O'Grady is the General Secretary of the