Member Article

Bankers' 20% bonus condemned by IPPR

Bankers receive a 20% “bonus”, simply for being bankers, by earning a significantly larger amount than their equivalents in other sectors.

Figures released by think tank IPPR have exposed workers in the finance sector, to show that workers with the same level of education, experience and characteristics in other sectors are earning significantly less than their counterparts.

IPPR will issue a report in the New Year on the “financialisation” of the economy, which will show how over the last 25 years, the finance sector has benefitted from what has been called a “persistent wage premium.”

In this period, the wage “excess” has wavered between 12 and 29%, while since the financial crash in 2007 this figure has been approximately 20%.

Senior staff have benefitted the most from this wage gap, and IPPR has highlighted this inequality in their report.

Kayte Lawton, Senior Research Fellow at IPPR, said: “We’ve analysed individual earnings of people working in finance and compared them to people with the same education and experience in other sectors.

“We’ve found that over the past two and a half decades, there has been a clear wage premium for workers in the finance sector.

“But figures for average earnings hide as much as they reveal because there is such a wide range of incomes within the finance sector.

“Average earnings data for the finance and insurance industry encompass everyone from the highest earning hedge fund managers and bank chief executives to staff in local bank branches and operatives in call centres.

“Pay for those in the upper echelons of the City is extraordinarily high and it is this that boosts the average wage. This wage premium for City workers is a major source of pay inequality in the UK.”

This was posted in Bdaily's Members' News section by Miranda Dobson .