Bonuses paid to bankers, insurance brokers and other UK financial sector workers have reached an all-time high and are rising more than six times faster than average wages in the UK, according to unions.
The Trade Union Congress said its analysis suggests that the pre-financial era City Council executive bonuses have returned, although much of the country is struggling with a rising cost of living that exceeds wage increases.
Analysis of official data shows that bonuses in the financial and insurance sector grew by 27.9% over the last year, while average wages in the same period grew by only 4.2%. In March alone, about £ 6bn was paid in municipal bonuses.
Frances O’Grady, TUC’s secretary general, said: “There is no justification for such obscene bonuses in the city at best, let alone during a cost-of-living crisis. the city does, millions struggle to keep their heads out of the water.
“Working people are at the breaking point, after being heavily exposed to rising bills after a decade of stagnant wages and universal credit cuts. Ministers have no hesitation in calling for wage moderation in the sector. “But it is time to keep the bonuses at the top. It’s time to keep the bonuses at the top, not the salaries for everyone else.”
O’Grady called for a series of measures to curb the city’s bonuses and raise wages across the economy. They include the introduction of maximum wage ratios, so that bonuses do not exceed 10% of total salary; ensure that bonus plans are open to all staff under the same conditions; and ensuring that workers are included on the company’s pay committees.
Last month, a group of experts from the Institute of Tax Studies found that the return of payments from the financial industry meant that 1% of the highest paid workers were even further away from the rest of the world. UK workforce in the biggest boom in bonuses and payments in the city since 2008. crisis.
The average bonus granted to the financial and insurance sector rose to £ 4,021 in the first three months of this year, compared to £ 3,146 in the same period last year, the TUC analysis showed. By contrast, the average monthly pay in the UK rose to £ 2,413, compared to £ 2,315. These figures put the city’s bonuses at an all-time high since records began, overshadowing the average wage in almost every sector.
In March, financial and insurance bonuses were 2.4 times higher than the average basic monthly pay of the worker. They were above the basic monthly average in all other sectors of the economy, with the exception of mining and quarrying.
The investigation comes as the cost-of-living crisis deepens, with an annual inflation rate of 9% and regulator Ofgem announcing that the energy price cap will rise by more than £ 800 in the fall . This follows a 54% increase in April and will bring the average annual energy bill to £ 2,800.
Real wages across the economy, adjusted for inflation, have fallen by £ 68 a month compared to a year ago. The situation is even worse for public sector workers, whose real monthly wages are on average £ 131 lower.
Beyond finance and insurance, other industries are resorting to one-off payments to recruit more people amid labor shortages, which could hamper more sustained wage increases, according to the TUC.
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His analysis showed record bonus payments in various sectors, including professional, scientific and technical services, real estate, arts and entertainment, administrative and support services, construction, wholesale and accommodation and food.
The TUC urges the government to tackle the crisis by introducing fair wage agreements between industry sectors and giving unions access to jobs to inform workers about the benefits of union membership.
He wants the minimum wage to be raised immediately to at least £ 10 per hour for all workers, regardless of age, and has called for “decent wage increases” for all public service workers. He also reiterated his calls for an increase in the number of public holidays, saying that workers in the UK have less than those in other countries.