Outlook You're not going to like this, but I'm going to tell you anyway: contrary to received wisdom, the banking industry is showing restraint on pay and bonuses. Figures compiled by Reuters show that at the US banks that have reported results for 2010 so far, total compensation – pay and bonuses combined – is up by an average of 4 per cent. The data on Europe is less comprehensive, but from the limited information we do have, banks on this side of the Atlantic, including those based in the UK, are going to fall broadly into line with their American counterparts.
Now, there are many people in Britain who will be getting a pay rise this year that is well below 4 per cent – assuming they are lucky enough to have a job at all. Still, a 4 per cent pay increase for bankers – remember, the retail price index suggests the cost of living is rising at almost 5 per cent a year – would not, in more normal times, prompt even a raised eyebrow.
These are not, of course, normal times. Still, the point here is that when we complain so bitterly about excessive pay in the banking sector, we are not really calling for one-off shows of modesty, but for greater pay equality on an ongoing basis. Even if the average pay rise for bankers this year was minus 4 per cent, the telephone-number rewards handed to senior executives would still prompt outrage.
This is not to say people are wrong to be upset about the huge salaries still being paid to those working in financial services – far from it. But it is going to take more than protests about this year's bonus round, even assuming they prove successful, to tackle the income inequalities that arestarker than ever before in Britain and other countries with large financial services industries.Reuse content