It's probably fair to say that most of us think we are underpaid. After all, many working environments today are more challenging than they used to be.
We work long hours – longer than in most European countries – and face rising living costs.
But the reality is that in the past four or five years employers have imposed wage freezes, rounds of redundancies and cutbacks. In real terms many of us are getting poorer and the gap between those at the bottom end of the income scale and those at the top is getting wider.
Today the median wage for a full-time male worker stands at just £23,000 a year and for a woman at £20,000. And there’s little prospect of that improving substantially for a few years yet, despite what the Chancellor George Osborne said last week about the nation’s economic recovery.
“Most people are surprised by these figures,” says Kevin Rowles, Senior Lecturer in the Business School at the University of Huddersfield, “because it’s really not very much for a family to live on.
“The average pay is higher, but skewed by the very small number of people at the top who earn extreme amounts of money.”
And so, even the current basic rate for a back bench MP of £66,396, plus generous expenses and pension contributions, seems like a small fortune to the average worker.
If MPs end up taking the £7,700 pay rise recommended by IPSA – although it seems likely now that they won’t agree to it at the moment (this may need updating on friday) – Mr Rowles believes they will alienate many ‘ordinary’ people.
“It is absolutely the wrong time,” he said, “and it will come back to bite them.”
But, as an economist, he accepts that market forces do determine levels of pay and to attract good calibre candidates the rewards need to be substantial. Although few MPs will speak out openly on pay, it is known that many feel theirs is an underpaid profession. It equates to the average head teacher’s salary.
“The basic determinant of pay is supply and demand,” explained Mr Rowles. “If you have a unique skill, like David Beckham for example, then you are going to earn a lot. A road sweeper, however, doesn’t really have any skills and anyone can do the job so they can’t command a lot of pay.
“If there is a high demand for your skill then there will be high incentives for you to supply that skill.” The City bankers, who caused the financial meltdown, are good examples of this: “Only a small number of people can do this sort of job,” said Mr Rowles.
“Traders have to be aggressive and mentally it’s very intense. Most of us couldn’t do it and they burn out quite quickly. But also there is this idea that they will go abroad to work if we don’t pay them enough – and the Government is afraid of losing them.”
MPs, however, are not typical ‘employees’. Mr Rowles added: “A lot of people want to be MPs, I quite fancy it myself, so the wages should, in theory, be lower.
“But you can’t become an MP unless you are part of a party, and to be nominated for a seat you have to be in a certain group. Both the Conservative and Labour Party front benches are comprised of very similar people. They had the same type of education, at public schools and Oxford and so on, and became research assistants before looking for a seat.
“It is said that they have to pay MPs more to attract the right people, so you assume that they are therefore coming from the higher paid professions – and the ordinary person has completely disappeared from parliament.”
In fact, what has happened in government simply mirrors the wider picture in society, where many top jobs and professions are increasingly occupied by those from more privileged backgrounds.
According to figures from HMRC, the Government’s revenue and income body, income inequality in the UK rose dramatically in the 1980s, during Mrs Thatcher’s ‘reign’ and income growth has continued among the richer members of society but not among the poorest. Such is the impact of the global recession that even the middle classes, traditionally enjoying a stable income, are being increasingly affected.
But those disadvantaged at birth, says Mr Rowles, find it difficult to shake off the effects of deprivation.
“Social mobility is declining,” he said. “The old school tie, who you are and who you know, still matters. There is plenty of evidence that graduates from less prestigious universities find it harder to break into these more advantaged groups and people from less advantaged homes find it more difficult to get into the best universities.”
And, of course, the wider the divide between the rulers and the ruled the less chance there is of MPs really understanding the economic and social problems faced by their constituents.
This may be even more of a problem among those MPs who also work alongside their constituency and parliamentary duties. Mr Rowles points out that many have high paid roles and directorships.
“They say that the world of work outside parliament keeps them in touch with the real world but they’re in well paid jobs, they’re not working as care assistants,” he said.
There is also an inequality among MPs themselves, with some having a greater workload – through choice or otherwise.
Mr Rowles explained: “Some are in marginal constituencies and have to fight to keep their seats, while others are in safe seats, so they don’t have so much to do,” he added.
However, it has to be said that a dedicated constituency MP often works long hours and takes on a great deal of responsibility. And for some critics of the pay rise, it is the timing that is the issue and not the money itself.
Brian Stahelin, managing director of the Stafflex recruitment agency in Huddersfield, says that while pay rates generally have stagnated, MPs may deserve the extra.
“I don’t know how you value what an MP is worth but it seems to me that it has been decided by an independent body, who presumably know what they are doing, and for the competency and skills they have they are underpaid. But I think the timing is a bit off,” said Mr Stahelin.
Stafflex places employees in temporary positions in a number of sectors, from education to engineering. “Pay freezes have been quite common across the board,” says Mr Stahelin, “because companies want to conserve their cash until they see what’s going to happen. They are being prudent. But things are starting to look better than we have had for some time.”
He predicts that next year wages could start to gradually rise and explained why: “If employers start wanting to recruit, what they will then get is a candidate shortfall and we will move from an employer driven market to a candidate driven market.” And so, the law of supply and demand will make conditions more favourable for employees.
If MPs do take the advised above inflationary rise then it won’t come into effect until after the next election in 2015, by which time the economy may be looking better.
Unfortunately, the wider social inequalities caused by the recession and austerity measures will almost certainly have worsened – and the damage will be done.
The independent body IPSA, which is proposing the increase in MPs pay, is divorced from reality, says Huddersfield MP Barry Sheerman.JH230813Nfirst-02.jpg
“It’s just nonsense. They are in an ivory tower. No-one can understand what they are on about, coming up with a big increase when people in the country are struggling.”
IPSA, set up after the MPs expenses scandal, has been conducting a fundamental review of parliamentarians’ remuneration. A survey released by the body earlier this year found that politicians believed, on average, that MPs should be paid around £86,000.
However, there is a growing demand for a pay structure that rewards MPs who work hard. The Institute of Democratic Effectiveness and Accountability has drawn up proposals for such a scheme.
Mr Sheerman, one of Westminster’s longest-serving MPs and consistently in the top 50 for the level of his activities in the House, supports a move towards performance-related pay.
“IPSA was set up by Gordon Brown in a hurry and they have never looked seriously at how MPs can be held accountable. You can look at their activities in the House, what they do in their constituencies.
“Let’s make this a time when we think about this,” he added.
Mr Sheerman pointed out that MPs do not have an equal workload. “We have MPs from the leafy suburbs who don’t have any of the problems with homelessness or unemployment that we have in the North and in places like Huddersfield.
“We have the nonsense where some people (MPs) don’t come to the house and think that’s acceptable and still drawn down the same salary.
“With a system of accountability people could see how hard their MP works. The proposal from IDEA is very sensible.”
IDEA suggests that MPs pay could be calculated using the following measures:
Contributions to Parliamentary committees (Select Committees and Bill Committees) and debates; parliamentary questions, both written and oral; attendance and voting record in the Chamber; number and regularity of constituency surgeries; follow up of issues raised by constituents; parliamentary interventions that have directly benefited their constituency; attendance at events in their constituency; campaigning, on local and national matters.
How do salaries in the non-political world compare with MPs’ pay?
Newly-qualified teachers start on £21,800 a year, but leading practitioners in schools earn from £37,800 to £57,500. Head teachers in state schools are paid from £42,800 to £106,100.
Trainee nurses, £14,300 to £17,400; health visitors, £25,800 to £34,500; and matrons from nearly £40,000 to £47,000.
Police officers, £19,000 to £36,000; sergeant, £36,500 to £41,000.
Provincial journalists: trainees, £15,000; senior reporter, £26,000.
Shop floor supermarket employees. According to the Fair Pay Network most supermarkets pay a basic of £6.83 an hour plus bonuses and staff discounts (£13,300). Managers in the retail sector can expect from £22,000.
Lawyers. There is a minimum starting salary of nearly £17,000 for trainees but most firms pay more than this. On average newly-qualified solicitors can expect £24,000 to £36,000, with much higher rewards for senior partners.
Junior hospital doctors, from £22,600 to £28,000; consultants, £75,000 to £100,000; salaried GPs, £54,000 to £81,000.
Care support worker, £8 to £13 an hour depending on shift.
Judges, from around £100,000.
Chefs, provincial trainee £13,000; head chef up to £30,000.
Postal workers, from £17,500 over the age of 18.
Heavy goods vehicle driver, from £25, 400. Bus or coach driver, from £16,000 to £25,000.
Footballers, £6,000 a week in the championship league;– Wayne Rooney, a reputed £226,000 a week.
According to a survey of personal income by the Government revenue body HMRC, the richest 10% of the population have salaries of over £50,000 a year but 0.1% of UK residents enjoy an average income of £780,000.Company directors and those working in finance and property are the wealthiest.
Jonathan Isaby , of the TaxPayers' Alliance, has said that IPSA wasted thousands of pounds of tax-payers money conducting surveys into MPs salaries and then disregarded the results. He said: “It is beyond contempt that IPSA completely ignored the very research which showed the public to think that MPs' pay is currently ‘broadly fair’.”
