Companies must do more to address the increasing inequalities between the highest and lowest earners in order to avoid a potential political back lash against free market policies, according to Richard Lambert, director general of the CBI.
Speaking in London yesterday on ‘Business in society and the new political landscape’, Lambert explained that factors such as globalisation, technological advances and new capitalism have led to rising inequalities among the highest and lowest earners in the developed world and some insecurity among staff in the private sector. In the United States, for example, he cited a 25% pay gap between skilled and unskilled workers by way of example. This is partly due to factors such as the increase in cheaper labour available in the developing world. However, he added that there had only been a moderate rise in income differentials in the UK.
A major political issue for the UK, however, said Lambert would be pensions. He added that there is a sense of unfairness around public sector pensions which some perceive to be generous compared to the provision available in the private sector.