New figures highlight the gap that exists between the wealth generated by large companies and the earnings of their workers. In the UK, recent research has shown that the 20 largest companies make an average of £96,000 pre-tax profit per employee. It would be interesting to see what the figures are in New Zealand. Matt McCarten has recently written about how SkyCity 'is in an extraordinary situation where staff members, who receive an average of $30,000 a year, are making their shareholders more than $40,000 each.'
The Guardian ran a very interesting comment on the profit-per-employee figures. Mark Braund gives a synopsis of how British economy and society has evolved to the state of affairs whereby a company like British Gas is making £445,000 per employee, yet the average wage is only £29,000.
Braund takes us through the development of political economy: prior to the 12th century Britons earned their living independently from farming the common land; then the organised programme of land enclosures dispossess most of their land; the industrial revolution pushed most people into the cities where they became labourers, and now 84% of Britons work for someone else earning a market rate that 'has little connection with the quantity of wealth generated'. Braund points out that the shareholders - the modern form of company ownership - contribute little if anything to the success of the organisation, especially compared to the employees. The problem, he says, is: 'The majority of the workforce, who have no option but to work for a market-determined wage, are directly responsible through their labour effort for most of their employer's profit, yet most of that wealth goes not to those who create it, but instead to absent shareholders.' He then suggests some ways in which this situation can be improved - most of which are not very convincing.
