UK intra-firm inequality is rising, driven by increased stock-based pay for CEOs and the outsourcing of lower-paid jobs. A significant part of this surge is due to the growing remuneration of top executives, which is increasingly coming in the form of stocks. This form of payment has led to a dramatic rise in the income of CEOs, especially in comparison to average workers.
There’s also a trend towards outsourcing lower-paid jobs, which has further widened the income gap. Companies are increasingly contracting out jobs that were traditionally done in-house, such as cleaning and security. This move has resulted in a decrease in the wages of the lowest-paid workers within firms.
Inequality within firms has significant implications for society. It can lead to social unrest, reduced trust in institutions, and even political instability. To tackle this issue, policymakers need to consider regulations on stock-based pay and outsourcing. They could potentially limit the amount of remuneration that can be given in the form of stocks or introduce minimum wage laws for outsourced workers.
Go to source article: https://blogs.lse.ac.uk/businessreview/2020/12/07/uk-intra-firm-inequality-stock-based-pay-for-ceos-and-outsourcing-of-lower-paid-jobs/