City pay including bonuses (pay in the financial services and insurance sector), has risen more than three times faster than nurses’ pay (3.2 times) since 2008, according to new TUC analysis published last Friday,
Pay in the financial services and insurance sector has also risen well over three times faster than midwives’ pay (3.4 times faster) and paramedics’ pay (3.4 times faster).
The new analysis shows that since 2008, average pay in the financial services and insurance sector has soared by 83 percent in nominal terms – almost double the rate of inflation in the same period (43%).
Average pay in the City has increased by 6 percent a year in nominal terms since 2008, whereas nurses’, midwives, and paramedics’ pay has increased by less than 2 percent.
The failure of key worker pay to keep pace with inflation has left many facing huge real terms losses:
- Nurses’ have lost £42,000 in real earnings since 2008 as a result of their pay not keeping up with inflation.
- Midwives’ have lost £56,00 in real earnings since 2008 as a result of their pay not keeping up with inflation.
- Paramedics’ have lost £56,000 in real earnings since 2008 as a result of their pay not keeping up with inflation.
The TUC has warned that working people are facing “two decades of lost pay” unless the government changes course and gets pay rising up and down the country – starting with a decent pay rise for workers across the public sector.
Bumper bonuses for City executives
This analysis comes after a record-breaking year for bonuses in the City – as average payouts in the City have dwarfed average pay in almost all sectors.
The TUC estimates the latest annual bonus (2022) for workers in the finance and insurance sector is a whopping £18.7bn. The TUC says this is likely concentrated among the better paid – and markedly more than the cost of giving all public sector workers an inflation proof pay rise.
The Conservative government lifted the cap on bankers’ bonuses in September, allowing bankers to “help themselves” to unlimited pay outs.
Under previous policy, an employee’s bonus could be no bigger than 100% of their annual pay, or 200% if there is approval from shareholders.
Significant bonuses are common for high-paid City executives – and come on top of salaries.
The TUC highlights that there are also many low-paid workers in financial services, who get much smaller sums.
Key workers “forced to take action”
The TUC says striking health workers have been “forced to take action to defend their living standards” after more than a decade of pay cuts.
Nurses, paramedics and physiotherapists are all taking strike action for decent pay this winter.
Recent TUC polling showed three in five patients with diagnosed health conditions support health workers going on strike to defend their pay and living standards.
The union body says that the Conservative decision to hold down public sector pay has left workers “hugely exposed to the cost of living crisis” and deepened the staffing crisis in the NHS, education and other public services.
TUC polling published in October revealed that 1 in 3 public sector workers are actively considering quitting or have already taken steps to do so.
TUC General Secretary Paul Nowak said:
“At a time when ministers are telling dedicated public servants they can’t have a pay rise, they’re letting city executives take home ever bigger sums.
“It’s not right. We can’t live in a country where nurses are having to use food banks to get by, while bankers are allowed to help themselves to unlimited bumper bonuses.
“This all boils down to political choices. Ministers could be taxing wealth and giving all of our public sector workers a decent pay rise.
“But instead, they are choosing to inflict more pay misery on our nurses, paramedics and midwives.
“Let’s be clear. Without decent pay rises, many more of our dedicated key workers in the public sector will vote with their feet and leave their professions for good.”
On strikes, Nowak added:
“Nobody takes strike action lightly. But workers have been pushed to breaking point by years of pay cuts.
“They have been forced to take action to defend their living standards and the services they provide.
“But so far, ministers seem more interested in escalating disputes than resolving them.
“Instead of undermining workers’ ability to bargain for better pay and conditions by attacking the right to strike, the government should focus on getting wages rising up and down the country – starting with workers across the public sector.“
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
