Gap growing in workplace pay

Steve Pye

Steve Pye

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WAGE disparity between management roles and low levels staff has increased dramatically since the 1970s, according to new research.

A study carried out by the London School of Economics has found wages for bosses increased more than fourfold since 1975.

Steve Pye, from the Fylde branch of the Federation of Small Businesses, said a number of different factors may have caused the rift in salaries over the past four decades.

He added that there is a “massive” difference between skilled and unskilled labour in modern industry, owing to the increase in the number of technology-related jobs which have opened up since the 1970s.

Mr Pye told The Gazette: “It’s the way it is. Everyone wants more, gets more and has more.

“The advances in IT and the advent of new technology since that research was carried out have opened up a wide range of skilled jobs, and these are the key areas these days.

“The distance between qualified and unqualified employment is a massive bridge now.”

He also said wage demands for higher positions varied from industry to industry, and that was also dependent on the size of the company.

The study showed hourly pay for company executives and general managers of large organisations jumped from £12.07 in 1975 to £49.20 in 1996.

However, the level of disparity had remained relatively constant since then.

But Mr Pye says the current disparity should not deter entry level staff from achieving the same pay as their higher ranking peers in the future.

He said: “If it’s a privately run business they pay what the going rate is.

“It’s a bit like a professional football club who pay top dollar for the best players and it’s a bit like that in business.

“The disparity which knocks that research out of kilter is that there are 20 Premier League football clubs where the players are on bigger money than their managers.

“There’s always going to be this imbalance and unfairness within the private sector because the man on the street can’t really have a say in what a private company pays people - in the old days the unions had the situation managed to keep wages up.

“If people want to earn more they’ll show a bit more ambition.”

According to Steve, many companies are more willing to pay out to keep so-called “talent” within their company for fear of losing their experience within the organisation, whereas turnover for low level and unskilled staff is treated less seriously due to the ease with which they can be recruited and replaced.

He added: “A lot of companies pay for performance and at the end of the day if I’ve got unhappy staff I’ll tell them to find another job.

“There’s an element of people in executive positions being kept sweet with higher salaries, and companies will always pay to keep their talent.”