How UK council bosses could learn from Obama on pay

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Friday, 5 April 2013 - Dave Fawbert

As figures reveal alarming pay gaps between bosses and workers in Greater Manchester councils, Barack Obama has volunteered for a pay cut. Could such a gesture in the UK public sector improve loyalty?

Obama

In these times of economic hardship and sweeping cuts – especially when the Coalition mantra “We’re all in this together” is still widely quoted – any hint of hypocrisy is sure to be swiftly leapt upon. And so it has proved with the release of figures showing the huge pay disparities between Greater Manchester council workers and their bosses.

The newly-published salary stats show that at £203,934 per annum, Manchester chief executive Sir Howard Bernstein is paid sixteen times as much as his lowest-paid workers, who make an average £12,786. Even the smallest difference is still large, with Rochdale’s chief executive Jim Taylor earning £130,000 – eleven times that of his lowest-paid colleagues.

By stark contrast, US president Barack Obama has announced that he will be taking a voluntary pay cut of 5% – in line with the cuts in paid hours that hundreds of thousands of federal employees will be taking. By law, the president’s salary cannot be reduced, but Obama has pledged to hand the $20,000 annual sum back to the US Treasury “to share in the sacrifice being made by public servants”, as the White House press secretary said.

Obama’s move is very smart politically. The gesture indicates that he does not consider himself to be above “ordinary” citizens; is aware of what they are having to sacrifice – and is prepared to lead by example. Much criticism has befallen the UK Conservative party over the past couple of weeks, particularly in relation to Iain Duncan Smith’s claim that he could live on £53 a week – yet despite a much-publicised petition, he is refusing to walk the walk and back up the talk. This is hugely damaging politically, as it suggests a “one rule for them, one for us” attitude to governance.

The usual arguments in defence of the council’s distribution of pay have been trotted out: the top dogs’ salaries are in line with those of comparable jobs; the managers are worth the money. This may well be true. But by at least making gestures to acknowledge the difficulties of their lower-paid colleagues, chief executives would gain considerable respect and loyalty from their workers: an outcome that could make the job of management much easier. Smart managers such as Obama understand that a small, short-term sacrifice will pay off handsomely in the long-term.

Barack Obama image courtesy of Action Sports Photography / Shutterstock.com

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