Practical definition: Get tough

Posted by Marc Hodak on December 4, 2011 under Politics, Reporting on pay | Be the First to Comment

The government should not be setting pay rates, Mr Clegg stressed, while making clear he supported top executives being well rewarded if their companies were successful.

What does he mean? Well, we need to take that phrase in the context of the speech where he declares:

We need to get tough on irresponsible and unjustified behaviour of top remuneration of executives in the private sector…What I abhor is people getting paid bucket loads of cash in difficult times for failure.

A politician will say all those things in the same speech because he wishes to whip up the mob that loves bashing the wealthy elite, but he doesn’t want to alarm that elite by saying he actually wants to determine how much they are paid. And he can say these things without worrying that the press will call him on it, and will, more likely, lay out these points as a balanced position rather than a contradictory one.

The press won’t question that “the government ‘getting tough'” necessarily means that
the politicians in charge should use the police power of the state to get the private sector to do what the politicians want them to do. In this case, Mr. Clegg means that the British government should decide how much an executive is allowed to make in a company deemed not successful. This, in turn, means giving bureaucrats the authority to make the distinction of “successful,” which would necessarily have to be applied to every single company. Is a company that loses any market value successful? What about a company that loses value in difficult times?

In other words, having the government “get tough on pay” means having the government set pay rates, at least in some situations, and potentially for any company.

There are citizens who don’t mind the idea of bureaucrats actually setting pay rates in the private sector, and there are some who don’t mind as long as it’s not their pay. But there are many people who would bristle at the thought of government setting pay rates for anyone not in government. By threatening to “get tough” on pay but claiming that they “should not be setting pay,” a politician can have it both ways, and the print media that boasts its role as an agency of letters and, occasionally, as a public watchdog will go right along with.