Leader of the Labour party, Jeremy Corbyn has proposed a maximum wage cap for all government contractors. The idea is that nobody can be paid more than 20 times that of the lowest paid worker. Corbyn said this would be a stipulation to win a government contract.
Currently, British government contractors see their top bosses earning around a million year, while many staff earn minimum wage, around £16,000 per year. Under these proposals, the maximum an executive could be paid would be £350,000.
In his speech he said, “In the 1920s, JP Morgan, the Wall Street banker, limited salaries to 20 times that of junior employees. Another advocate of pay ratios was David Cameron. His government proposed a 20:1 pay ratio to limit sky-high pay in the public sector and now all salaries higher than £150,000 must be signed off by the Cabinet Office.
“Labour will go further and extend that to any company that is awarded a government contract. A 20:1 ratio means someone earning the living wage, just over £16,000 a year, would permit an executive to be earning nearly £350,000. It cannot be right that if companies are getting public money that that can be creamed off by a few at the top.”
Jeremy Corbyn also spoke about the formation of remuneration committees where a workforce would sign off salaries for executives.
He said it was a guiding principle that a CEO could not pay less tax than a cleaner or that an executive earned more in a day than a nurse or teacher made in a year.
He went on to say that, “Labour will build a better Britain out of. That will start with the refinancing of the NHS and the creation of a more equal country, in which power and wealth is more fairly shared amongst our communities. A genuinely inclusive society with strong and peaceful relations with the rest of the world.”
So far his ideas have been well received in marginal seats.