I hate to once again bring up Polly Toynbee's column on Tuesday, and in particular this quote:
FTSE CEOs helped themselves to 30% more this year, while their directors took 28% (against an average pay rise of 2.8%). They now earn at least 76 times the average pay of their staff, when in 1980 it was just 10 times.
The Work Foundation points to these hard figures: in 1980 top directors in FTSE companies were paid 10 times the average worker in their companies. By 1990 the gap had multiplied to 31.5 times. And by 2002 the top dogs were paid an enormous 75.7 times more than their average employee.
I picked this up at the time and pointed out that the figures she referred to looked not at the pay of all directors, but only the highest paid for each company. I also said that:
it is not "the average worker in their companies", rather it is the average of "full-time manual employees in the UK." [emphasis added, source is the article I mentioned above].
Now, the average of all manual workers pay is different from the average pay of people working in a FTSE-100 company, as I am sure the employees of, say, 3i or Barclays or Schroders will be able to confirm.
I was delighted to find confirmation of my theory in this, er, Guardian column of 2 October, 2006 which says:
The best-paid [FTSE-100] workers are at London-based financial groups. Top of the pile is venture capital specialist 3i which paid its staff an average of £174,625 each last year
3i, eh? Who'd have thought it? Any guesses, by the way, on the discrepancy between the average pay of a manual worker in the UK and £174,625? Would Polly not be the first to claim it was massive?
Incidentally, there are two other problems in Polly's use of full-time manual employees in the UK as a proxy for FTSE-100 staff. The Guardian article points out that:
At the other end of the scale is Kazakh copper mining company Kazakhmys, now listed in London, where the average salary of its 64,000 miners is just over £2,000 a year. The British company with the worst-paid employees is retail chain Next, whose staff - many of whom are part-time - earned an average £10,306.
So basically, she is using the pay of full-time manual workers in the UK as a proxy for a workforce which is not all full-time, not all manual and not all in the UK.