Blackfriar: The huge wage gaps that’s making it bad for business

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NEW research showing that half the population believes British businesses fail to make a positive contribution to society and more than two thirds say companies don’t behave ethically will come as no surprise to the man on the street.

After the financial crisis, many people are fed up with the corporate world.

Business lobby group the CBI is hoping to address these concerns with a new campaign launched today called ‘The Great Business Debate’ to assess why the public is so disenchanted with business and what firms can do to improve their standing.

The CBI called on pollsters YouGov to assess the mood of the nation. The findings show that hostility to business is a common theme throughout the country.

Over two thirds of the public (68 per cent) said that industry scandals have hit their confidence in business and only 15 per cent disagree that the economic crisis has impacted on their confidence in business as a whole.

Over a third of people (38 per cent) blame banks “that rip customers off and refuse to fund companies properly” and roughly the same number (42 per cent) blame “ruthless companies exploiting staff” for ongoing fears about the economy.

The CBI said that avoiding tax and executive pay regularly top the lists of areas of public concern.

The YouGov stats showed that 55 per cent of people believe that expectations on business to do the right thing have increased over the last ten years following the financial crisis in 2007.

This is all well and good, but if the CBI is to change the way people think about business it needs to start pressurising members to treat their staff in the same way they treat themselves.

Launching its new campaign in London, CBI bosses said the weakness of earnings growth is a “puzzle”.

The only puzzle is how company bosses can reward themselves huge salary and bonus increases while expecting their workforce to accept miserly or non-existent wage rises.

A recent study by independent think tank the High Pay Centre showed that the CEOs of FTSE 100 companies are paid 143 times more than their staff.

Lord Wolfson at Next gets a whopping £4.6m a year while an average member takes home £10,000 – that’s a stunning multiple of 460 times more.

​A new report out today shows that more people are being forced into volatile, low-paid jobs,​ threatening the stability of the economy.

​​The report, carried out by research group Centre for Cities and the Joseph Rowntree Foundation, said the gap between good and poor quality jobs has polarised.​

​It claimed that over​ one in five workers are now on low pay, with more employed than unemployed households in poverty.

Cities in the North ​are particularly at risk, with a third of ​workers in Hull being low paid, while in ​Doncaster and ​Grimsby, one in four workers earn ​ less than two-thirds of the median national wage​​.

Speaking to students working at a well known high street fast food chain, Blackfriar was taken aback by their loathing for the company.

Their salaries are pitiful and they don’t get the respect or appreciation they feel they deserve.

They are bright enough to know how much the executive board are paid and their main aim is to get out and get a better job to help fund their studies.

When the economy does pick up, companies that have neglected their staff while indulging their managers will pay the ultimate price.

Their employees will jump ship

This new CBI initiative is a step in the right direction, but the CBI needs to get tough with its members.

As company profits improve, staff wages need to improve.

One rule for the workers and another for management won’t wash.