Life– Terror. Ecstasy. Fight. Denial. Flight. Failure. PAIN. Forgiveness. Reconciliation. Hope. Love. Peace – Death.
Free Market – Capitalism
To recap: inflation is at a 40-year high, fuel prices have repeatedly hit record levels and a global recession is a real threat. While the government (backed by the majority of the UK media) lambasts rail workers, teachers and the (Scottish) Police, (protecting profit) demanding restraint on worker pay, warning of the dangers of a “wage price spiral”. With zero political opposition in sight (Labour refuses to ‘publicly support’ industrial action), whilst at the top of the pyramid they ‘spit in our faces’ with, widespread, disproportionate, obscene pay rises and bonuses?
Having shown restraint for two long pandemic years, the average pay of FTSE 100 bosses has sprung to pre-Covid levels. Chief executives were paid £3.62m on average in 2021, rebounding from £2.78m in 2020.
Though top pay is still short of the £4.04m high seen in 2017, by July, when the annual meeting season closes, another round of increases will have been waved through.
If workers must show restraint, then why not their bosses?
Some companies are already splashing the cash. The Restaurant Group chief Andy Hornby, best known for leading Halifax Bank of Scotland before its state bailout, landed a £578,000 bonus in May, despite a stiff 32% of votes cast against. Simon Wolfson, chief executive of Next, was awarded a 50% pay rise on Thursday, taking his remuneration to the highest level since 2015.
The system of executive pay is “broken”.
On Thursday, shareholders in Next backed the company’s decision to reward Simon Wolfson with £4.4m this year, the highest level since 2015, despite opposition from some investors concerned about the disparity between executives and the wider workforce.
This is particularly egregious at a time that many of the workers in many of these companies will be struggling with the growing costs of living. You have major increases in executive pay in consumer facing companies (such as Next) where the workforce are not accredited as being on a living wage
Other firms including the owner of Wagamama, the Restaurant Group, have also come in for criticism in recent weeks over executive bonuses. The group – which also owns the Frankie & Benny’s and Chiquito chains – paid its chief executive, Andy Hornby, £1.2m last year up, up from £518,000 a year earlier.
Meanwhile, Tesco has been criticised for paying its chief executive £4.75m last year, including the highest annual bonus awarded by the supermarket since 2016, at a time when families are being hit by soaring food price inflation.
There is a societal crisis unfolding before us and in the UK you have over three-quarters of churches involved in supporting foodbanks that are not just providing food to people out of work but those in work that cannot make ends meet.
On Wednesday Martin Lewis, founder of the consumer advice site Money Saving Expert, someone who is much more in-tune with the current social physique than any currently serving politician warned that financial desperation could lead to “civil unrest”.
Communications giant BT has denied a union’s claims that call centre staff have set up a foodbank to help them during the cost-of-living crisis. The Tyneside CommunitEE Pantry was set up by staff at EE – owned by BT – and offered cupboard staples such as pasta, cereal and oats, as well as baby food, and was first reported by The Big Issue magazine.
The Communication Workers Union (CWU), which is balloting members over strike action, said the pantry at a North Tyneside call centre was a food bank and an example of low pay. BT denied the initiative was a food bank, saying it was set up by staff to help colleagues, such as those who struggle to get to the shops after a long shift.
Households already struggling with soaring food and energy bills face a further hit when the energy price cap rises for the second time this year in October.
“The public mood is desperate, it’s angry and we may well be moving towards, if we don’t sort this when those bills rises come in October to £2,600 in the middle of winter, I worry about civil unrest,” Lewis, told ITV’s Peston programme.
Activists from Share Action and Labour Behind the Label who attended Next’s AGM in Leicester, the centre of the UK’s garment-making industry, asked the company’s executives why workers in factories which supply garments to Next were not paid the living wage. They reported that Wolfson listened carefully to them, but did not promise change.
Pay campaigners probably have 7 July circled in their diaries. That’s the date investors vote on when Sainsbury’s chief executive Simon Roberts’ £3.8m pay package. The pay-out comes after some of its big investors called for all employees in its stores – including contractors – to be paid a “real living wage” of £9.90 an hour. Meanwhile, shareholder adviser Glass Lewis has urged a vote against the package of Sir Martin Sorrell at S4 Capital. Sorrell became the posterboy for fat cat pay during his time at WPP.
Simon Roberts. The grocery executive has raked in millions but has rejected calls from investors to pay all workers in its store the “real living wage”. Total annual pay 2021-22 £3.8m (2020-21: £1.3m), Pay ratio 183 times more than the average worker, Pays living wage Yes – for its 171,000 direct employees but not contractors from firms such as Mitie who provide services such as cleaning and security in stores.
The economic situation defined by an inefficient distribution of goods and services in the free market. Furthermore, the individual incentives for rational behaviour do not lead to rational outcomes for the group. Put another way, each individual makes the correct decision for him/herself, but those prove to be the wrong decisions for the group. In traditional microeconomics, this is shown as a steady state disequilibrium in which the quantity supplied does not equal the quantity demanded.
The assumption is that; free markets determine prices and that there are no market failures. But market failures can occur. A market failure arises, for example, when polluters do not have to pay for the pollution they produce (The Climate Change Crisis).
Such market failures or “distortions” can arise from governmental action as well. Thus, governments may distort market prices by, for example, subsidizing production, as European governments have done in aerospace, as many other governments have done in electronics and steel, and as all wealthy countries’ governments do in agriculture. Or governments may withhold (control) information, leading to underproduction of new knowledge; they may also overprotect it. In such cases, production and trade, guided by distorted prices, will not be efficient.
A famous theorem in economics states that a competitive enterprise economy will produce the largest possible income from a given stock of resources. No real economy meets the exact conditions of the theorem, and all real economies will fall short of the ideal economy–a difference called “market failure.”
Market failure can be caused by; controlled (or lack of) information, market control, public goods, and externalities.
Market failures can be corrected through government intervention, such as;
Amendment’s to existing and New laws (the Government’s Police, Crime, Sentencing and Courts Act),
Existing and increased ‘Taxes‘ – The current rate of fuel duty in the UK is 52.95 pence per litre, including the 5p cut on the tax the government made in March, and equates to around 29% of the overall cost of the price of unleaded petrol you pay at the pump. There is also a 20% VAT rate on top of this, which contributes to 17% of the price you pay for unleaded at your local forecourt. (NIC’s), Employees rates (Class 1) will rise to 13.25% and 3.25%. + Employers rates (Class 1) will rise to 15.05% + Self-employed Class 4 will rise to 10.25% and 3.25%,
Compulsory, Government ‘Tariffs’ (Taxes?) – From 1 January 2022, the UK introduced its 2022 integrated tariff. This incorporates the World Customs Organisation’s (WCO) changes to the Harmonised System Nomenclature,
Government ‘Subsidies’ – The Subsidy Control Act 2022 provides a new framework for the provision of subsidies within the United Kingdom, the provisions in the subsidy control chapters of the Trade and Co-operation Agreement, which have applied in the interim of the UK’s exit from the EU and
Trade restrictions – Despite proclaiming the opposite, BREXIT is currently the UK’s most impactful restriction of trade for half a century, e.g. restrictions of labour, labour shortages.
The UK 2022
According to the government’s own figures, there are more than 2,200 food banks in the UK, while there are around 1,300 McDonald’s restaurants. 23 Sept 2021
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