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Pay and reward in London

employment , equality , fairness , personal finances



In this project, IPPR is talking to Londoners from a range of backgrounds about who gets paid how much in London and investigating people's understanding of the relationship between pay, effort and skill.

In the UK, the gap in earnings between highest and lowest paid is out of step with public opinion. Survey data shows that the public would like to see a pay gap between top and bottom earners which is considerably smaller than the one that exists at the moment. People also consistently underestimate the ratio between those with the highest and lowest earnings by a very wide margin. Yet, politicians often find it difficult to talk about reducing earnings inequality and the public can be sceptical about the role of government in tackling large gaps, despite concern about their existence.

Large pay gaps are often justified as resulting from differences in effort, skill level, responsibility or the value added to the UK economy. But there are questions about the extent to which large differences in pay represent 'just rewards'.  

Nowhere is the gap between top and bottom earners more evidence than in London. The capital is home to some of the world's highest earners but many thousands also struggle on low wages. Growing levels of pay inequality create distance between London's different communities and make it much harder for the welfare state to reduce income inequality. This project will focus on London but the findings will have relevance for the rest of the country too.

The aim of the project is give politicians, business leaders and others the tools to talk about the earnings gap in a way that responds to people's concerns and helps create the space for action.

The project will run for a year from summer 2010 and is being generously supported by the Trust for London.