Concern has been growing about the impact of inequality on the recovery of the global economy. The Independent notes that JP Morgan, the American banker, believed that the head of a company should not earn more than 20 times those at the bottom. As recently as the mid-1990s, the experience in Britain was not a million miles from that: in 1998, chief executives earned 47 times the average pay in the companies they ran. But today their earnings have rocketed out of sight: in 2013 the average pay of a FTSE chief executive was 143 times the average in the company.
Business leaders worry about income inequality and revolution. Dominic Barton, the global MD of McKinsey told the Wall Street Journal that “rising and persistent income inequality” is the biggest challenge to capitalism. The Harvard Business School recently reported that whilst in the USA economy: large and midsize firms have rallied strongly from the great recession, and highly skilled individuals are prospering, middle-and working-class citizens are struggling, as are small businesses. They argue that such a divergence is unsustainable and ask in particular, how can USA economy can adjust to one in which firms both thrive in global competition and lift the living standards of the average American citizen.
