Comments by "Taffy Terrier" (@taffyterrier) on "Channel 4 News"
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@randylahey2607 You wouldn’t have more spending power but would still be earning more money than you were before.
But returning to my original premise let’s say inflation is 8%.
A CEO on £1 million per annum receives a 6% below inflation pay rise which equates to £60,000.
A low paid worker on a zero hours contract earning £20,000 receives the same 6% pay rise which equates to £1,200. This £1,200 pay rise means he is £400 worse off as he spends all his income on essentials and inflation is running at 2% higher than his 6% pay rise.
As the cost of food, gas, electricity, water, TV licence etc. is the same for the CEO a pay rise of just £1,600 on his £1 million salary would result in a real terms pay freeze as this would cover the increase on all of his essential spending.
But because every penny of his £1 million salary has increased by 6%, even though this is 2% below inflation he benefits from an additional £58,400 for non essential discretionary spending or to invest in property or bank offshore ON TOP OF the £1,600 he needs to break even.
So his sub inflation 6% pay rise of £60,000 amounts to a very substantial £58,400 real terms pay increase.
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