Inequality

Blackrock has added its voice to Jeremy Corbyn’s on the subject of executive pay, amid evidence that FTSE 100 CEO pay has quadrupled in less than 20 years.  The fund manager, which wants to curb executive pay rises, is a shareholder in every one of these businesses, and arguably much better placed than Corbyn to trigger reform. The issue is part of a long-running debate over whether owners’ interests are better served by hiring top talent and ameliorating Type 1 agency issues, compared with the cost of executive packages and the detrimental impact of inequality in the workforce. This is, however, the tip of the UK inequality iceberg. As it stands, 1% of the UK population benefit from c.15% of the UK’s income. However, of much greater significance, 1% of the global population controls c. 50% of global wealth. Property is a favoured vehicle for the rich. However, even for those homeowners in London with more modest means, it is easy to see how gains in wealth from property ownership can sometimes outstrip net salaries.