Re: Maths
Fair enough, though the figures did include employee contribution to NI, if not employer... ditto pension funds - we weren't talking about on-costs. But that still doesn't explain the relevance of your post to which several people have replied...
"Inflation is based on net prices, but wage increases are calculated before tax.
Someone on basic tax rate pay less for their £1 than someone on higher rate, so inflation affects them more as their money is more expensive for them.
Someone on £30k pays about £25 for their £100 and someone on £100k pays £52 for their £100."
and
"Yes, you forgot about progressive tax that is punishing high earners. Boss is likely paying 50% or more of effective tax, so his pay rise should be compensated for that.
Inflation % rate does not take into account progressive tax, so high earners are more affected by inflation actually."
What does a percentage inflation rate not "take into account" about progressive taxation that affects high earners more?
As I explained, the headline inflation rate used by the BoE and government and is thus jumped on by the unions and individuals is the CPIH - the Consumer Prices Index including an element of housing costs for owner-occupiers (mortgage interest payments). It's as close a blend of economic fiducials can come to reflecting the true cost of living as can be generated from a top-down calculation. It's weighted towards the median income household and fails to reflect accurately households at both extremes of income. The ONS aren't terribly happy about it, but the mechanism needs to be accepted as robust both domestically and internationally.
If you already buy the cheapest food stuffs and can't afford insulation and can't afford a more fuel efficient car or have to pay regulated commuter rail fares which are going to rise by 13% on January 1st, then you have no room in your lifestyle to buffer your household from the effects of inflation. What's your cheaper alternative to Aldi Own Brand Spaghetti? Buying less of it? Truly the effect of inflation in raw production prices is very literally belt tightening.
If you are a high income household, then you could, and should, be mortgage free already, or possibly your house is held by an offshore company of which you are sole director and so you "rent" off yourself for £100 a month or some other tax dodge. You are unaffected by BoE rate rises - in fact if you have investments, you're laughing! You might have to change your Range Rover Evoque or Bentley (I'm guessing the rich have no taste or sense!) for a Tesla or a BMW EV. You might have to buy a new status signalling wrist watch every two years from now on. You might have to get one week's food delivery out of every four from Waitrose instead of Fortum and Mason. Heck, even if you shop at Waitrose regularly you might switch to their own brands - you have room to do that. So I don't accept your argument that inflation affects high income households more than median or low, and so I don't accept the fact that a percentage pay award must be higher than the headline inflation figure for high earners, whereas for the median and low earners JUST inflation or below inflation is adequate for the same effect. It's clearly not! And it's even more clear that using your own distorted logic, when CPIH is at 11-13%, that 32% for the CEO is in any way, shape or form equivalent to 9% for a minimus wage employee in terms of preserving a healthy economic balance.