Britain: Bankers’ bonuses, workers’ poverty

For many working class families, this Christmas looks like being a grim one as the effects of the recession continue to bite. However, for bosses, bankers and City traders it looks like quite a different story.

Despite having received incredible sums of state aid over the last eighteen months or so, it looks like many at the top will be enjoying bumper payouts this winter. As early as last summer, “mind blowing” payments (to quote the usually right-wing Daily Mail) were being promised to many in the City of London this Christmas. The Citywire site went on in October to calculate this largesse as being about £6 billion in total, up by 50% on last year and well in line with the huge payouts made during the height of the boom. For example, Goldman Sachs is expected to pay bonuses to their 5,500 London-based staff which will work out as representing an average of around £400,000 per ‘worker’.

Of course such payouts have attracted a certain amount of bad publicity as people rightly question such huge bonuses. So step forward the Duke of York who has now put all our minds at rest by announcing that this is a case of “throwing the baby out with the bath water” and that such payments are “minute” in the scheme of things. This from a man who has been described as being on a gap life!

Citibank has got around the problem of bonuses being bad publicity by just increasing salaries by 50% - for staff employed as investment bankers and traders that is. Ordinary staff can expect to join the rest of the working population by being told to expect little if anything in the form of pay increases.

So what about the other side of the coin? Well even before the worst of the recession took hold with its cuts in jobs and pay, things were not good. According to official data presented by Oxfam and others, 13.5 million people in the UK were living in households below the official low-income threshold as at 2007/8. This represents one-in-five of the UK population and an increase of 1.5 million over the previous three years. So much for the war on poverty!

With the recession has come job cuts, pay freezes, actual pay cuts and so on. Private sector pay has only risen by 0.6% over the last year, for many not even that much. Unemployment continues to rise, month on month. There is every indication that the three million figure will be breached. For youth, things are particularly hard with one-in-five young people out of work. Many people are now reduced to taking what work they can. 7.66 million people are now doing part-time work (a record high) of which nearly a million are part-time despite requesting full-time work.

Meanwhile debt continues to rise for those least able to bear it. Data issued by the Resolution Foundation in October shows that 24% of low-wage households spend more than a quarter of the monthly income on servicing debt – up by 100% over a three year period.

Behind all this data lies a reality of misery for millions of working class people this winter. Next year will certainly bring the promised attacks on public spending with services to the needy and vulnerable being cut to help fund the trillions being handed over to the banks to keep capitalism running.

150 years ago Karl Marx in his book ‘Capital’ exposed the hypocrisy and brutality of 19th century capitalism. This was the world of Dickens and the classic ‘A Christmas Carol.’ Old Scrooge would most certainly recognise the capitalism of the 21st century with its huge profits and massive levels of poverty – a tale of two classes indeed. It is time to get rid of this rotten system. Our New Year resolution must be to strengthen the fight for socialism and to mobilise the forces of labour to this end.

Source: Socialist Appeal