IEA responds to High Pay Centre’s latest report on CEO pay
7 January 2022
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Commenting on the report, Professor Len Shackleton, labour market expert at free market think tank the Institute of Economic Affairs, said:
“It’s that time of the year again, when the High Pay Centre stokes public hostility by comparing executive and workforce pay and puts forward solutions that will do nothing to help those on lower wages. Even though the gap has narrowed since last year’s report, their arguments remain the same.
“The economy is not a zero-sum game, as Luke Hildyard suggests. The government cannot redistribute without risking reducing the size of the pot. Nor would cuts at the top end directly translate to top-ups at the bottom.
“Nobody disputes that the services of nurses and other key workers have been invaluable during the last two years. But you cannot build a pay policy on subjective estimates of moral worth such as those in the HPC’s survey.
“Firms do not justify high executive pay because bosses work harder than others. They pay more for those they believe to be the most talented. Like football, it’s a market for a scarce commodity.
“Obsessing over high pay undermines the achievements of successful CEOs which benefit both employees and customers. And it risks shutting down sensible discussion over the important issues of low pay and the cost of living.”
ENDS
Notes to editors
Contact: Emily Carver, Head of Media, 07715 942 731
IEA spokespeople are available for interview and further comment.
“It’s that time of the year again, when the High Pay Centre stokes public hostility by comparing executive and workforce pay and puts forward solutions that will do nothing to help those on lower wages. Even though the gap has narrowed since last year’s report, their arguments remain the same.
“The economy is not a zero-sum game, as Luke Hildyard suggests. The government cannot redistribute without risking reducing the size of the pot. Nor would cuts at the top end directly translate to top-ups at the bottom.
“Nobody disputes that the services of nurses and other key workers have been invaluable during the last two years. But you cannot build a pay policy on subjective estimates of moral worth such as those in the HPC’s survey.
“Firms do not justify high executive pay because bosses work harder than others. They pay more for those they believe to be the most talented. Like football, it’s a market for a scarce commodity.
“Obsessing over high pay undermines the achievements of successful CEOs which benefit both employees and customers. And it risks shutting down sensible discussion over the important issues of low pay and the cost of living.”
ENDS
Notes to editors
Contact: Emily Carver, Head of Media, 07715 942 731
IEA spokespeople are available for interview and further comment.
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