UK workers suffer 2.5 per cent real-term pay cut, while top CEOs get 4 per cent rise

Workers in the UK took a 2.5 per cent real-term pay cut in 2022, while top CEOs received a 4.4 per cent real-term rise, new analysis from Oxfam reveals ahead of International Workers’ Day today.

The total salary loss for workers in the UK was over £23 billion, with individual workers losing an average of £715 each because wages did not keep pace with inflation. This is equivalent to working 5.3 days unpaid. The pay rise for top CEOs was 12.3 per cent, before being adjusted for inflation.

Oxfam’s analysis of the CEO data so far available for 2022 shows that the UK’s 100 top-earning CEOs were paid £3.4 million on average in 2022 and earn 140 times more than the average worker in the UK.

Globally, CEO pay in the UK, US, South Africa and India averaged a nine per cent rise last year, while workers’ wages in 50 other countries fell by an average of three per cent during the same period. One billion workers each took an average pay cut of $685 in 2022, a collective loss of $746 billion in real wages.

The figures, adjusted for inflation, are based on the latest data from the International Labour Organization (ILO) and government statistics agencies. Shareholders saw record payouts of $1.56 trillion in 2022, a 10 per cent real-term increase compared to 2021.

Katy Chakrabortty, Oxfam Head of Advocacy, said “While we know that the UK is in the midst of a searing cost of living crisis, seeing just how much workers across the country are losing is astonishing. Apparently top bosses didn’t get the memo that we should all just accept being poorer.

“It’s clear that the cost of living crisis is actually an inequality crisis, one where CEO and shareholders siphon off the profits and get richer by the day while working people struggle and can’t afford the very basics.

“This is an economic model of misery and we need governments to stop propping it up and get serious about ensuring a fair deal for all. A permanent increase in taxes on the richest 1 per cent is long overdue.”

Women workers are disproportionately affected, often having to work reduced paid hours or drop out of the workforce altogether because of their unpaid care workload. They also continue to face gender-based discrimination, harassment, and less pay for work of equal value as men. Oxfam’s analysis found that women and girls are putting in at least 380 billion hours of unpaid care work every month, which total 4.6 trillion hours a year.

Additionally, Oxfam’s analysis of corporate and survey data for 2022 found that:

• 150 of the top-paid executives in India received $1 million on average last year, a real-term pay rise of 2 per cent since 2021. A single Indian executive makes more in just four hours than the average worker earns in a year.
• 100 of the highest-paid CEOs in the US made $24 million on average in 2022, a real-term pay hike of 15 per cent from the previous year. The average worker in the US would have to work for 413 years to match what a top-paid CEO makes in 12 months. 50 per cent of women of colour in the US make less than $15 an hour.
• Top-paid chief executives in South Africa made $800,000 on average in 2022, 43 times the pay of the average worker. Their real terms pay rose 13 per cent last year.

US corporations paid out $574 billon to their shareholders, more than double US workers’ total real wage pay cut. Brazilian shareholders received $34 billion, just shy of what the country’s workers lost in real wages.

Luke Hildyard, director of the High Pay Centre who provided the UK CEO pay data, said “Huge executive pay awards demonstrate the great wealth that exists globally. This could deliver far higher living standards for billions of people across the world if it were shared more sensibly instead of flowing in such vast sums to a super-rich elite who take far more than they need."

Exorbitant shareholder payouts benefit the richest in society, exacerbating already high levels of inequality. The wealthiest 1 per cent of South Africans own more than 95 per cent of bonds and corporate shares, while the richest 0.01 per cent own 62.7 per cent. In the US, the richest 1 per cent hold 54 per cent of shares held by US households.

However, taxes on income from these dividends and shares, which help to fund public services like healthcare and education, have continued to fall, down from 61 per cent in 1980 to just 42 per cent today.

Oxfam is calling for governments to explore the different ways that they can make the richest pay their fair share, including introducing significant top rates of tax on CEOs to discourage sky-high executive pay and windfall taxes on excessive profits. Governments must also ensure minimum wages keep up with inflation, and that everyone has the right to unionize, strike and bargain collectively.

Ends

Notes to editor

Oxfam’s calculations are based on ONS, World Bank and OECD data.

Download Oxfam’s methodology note and dataset HERE

UK CEO pay data was provided by the High Pay Centre, using all currently available data, selecting the top 100 best paid and comparing to 2021

Download Oxfam’s report “Survival of the Richest” for more information about taxing the super-rich to fight inequality.

According to Oxfam America’s report "The crisis of low wages in the US”, nearly a third of all workers in the US earn under $15 an hour.

The Janus Henderson Global Dividend Index publishes data on annual dividends by country.

According to the United Nations University, the top 1 per cent of South Africans own 95 per cent of bonds and corporate shares, while the richest 0.01 per cent own 62.7 per cent. The US Federal Reserve publishes data on corporate equities and mutual fund shares by wealth per centile group.

Oxfam’s research shows that taxes on incomes from dividends and shares have fallen from 61 per cent in 1980 to 42 per cent.