to think that bankers who sue take legal action to protect their bonuses should ...

[MmeReindor]

be made to live in a grotty mouldy B&B for a month, so they can see the consequences of their actions. There are people who have lost their jobs because of the recession, who have lost their home, lost everything.

And the bankers still insist on a bonus. On top of their already well paid job?

I am speechless.

The Guardian reports today that this may happen.

Already in Germany, the Commerzbank is facing a legal challenge from its subsiduary, DresdenKleinwort

The bankers claim that Commerzbank, which bought Dresdner Kleinwort, should have honoured an agreement to provide a ?400m bonus pool for 2008. Dresdner Kleinwort reported a ?6.3bn loss for 2008, which Commerzbank believes changed its commitment to the bankers

What really gets my goat is the comment about taxes, from a think tank.

City bonuses are expected to total £4.2bn in 2011, down 38% on the £6.7bn paid out last year, ... will generate about £2.5bn for the Treasury, ... this is still some distance ...from the £6.8bn collected in the peak of 2007-08, clearly illustrating how the taxpayer also misses out when the City pays lower bonuses,"

How in the name of all that is holy, does that even make a bit of sense?

We bail the banks out with taxpayers' money, but should be grateful that we are getting £2.5bn back - if we even get it back, as no doubt some of it will vanish in an off-shore bank account, or via shady tax avoidance.

Bollocks. £40K net would put your household near the top 5% in the country. Honestly people on good wages are so naive. All those vast poorer areas? Are you really, honestly that blinkered? Sheesh...

And London stats, a bit old here

that means a couple on the average london wage is earning more than 99% of the population...

Missing - £40k net = approx £55-60K gross I think, so for two people matches Angel's stats.

angels stats were about individuals..

Two working adults = two individuals, non?

Missing
You are totally and utterly wrong (and rather offensive).

Average working wage is £21k and slightly higher for London, if I remember rightly. For one person. Gross income.

Those stats are a bit flawed, actually. It states:

So does that mean that if you earn £45k that you are in the country's top 10% of earners? Sadly it's not as simple as that. The ASHE is a sample of 1% of people who pay tax via PAYE. It doesn't include the self-employed - businessmen, contractors etc - who make up the ranks of the really wealthy.

I have a link about the average wage somewhere, cause I wrote about it on the blog. Will check.

It's also pointless to talk about 'national average salaries' in general terms. That includes everyone who works for a living, presumably including school leavers in very junior positions with no skills or experience to speak of, and part-timers on minumum wage who work the mysterious 16 hours a week that they all seem to do, and people who live in some northern mill town and bought their house for £40k instead of £400k. What is the point in telling chick that her husband as actually quite rich compared to them, when he is surrounded by people earning three times what he does? If we are allowed to consider relative poverty in the UK then surely we should also consider relative wealth?

yy. Good point, Fellatio.

The problem is not too low salaries - you can live well on an family income of £40k in a small town in Scotland - it is the living cost vs salary gap.

And that is massive in London, with house prices, childcare extremely high and wages generally not much higher than elsewhere in UK.

I wrote about this on the Frothers blog recently. More from the benefit side of the equation, but with an example of how a couple with an income of £42k would struggle.

Very well said Fellatio.

I'm sorry there is still too much mental going on here - a take-home income of £40K (about £60K gross) for one of two earners in a household puts that household in the top 5% of incomes in the country. That means roughly there are around 2 million people earning more than you and 38 million less than you. That is not a low wage. In the most disadvantaged areas in london the average household salary is less than £10,000. Please tell me you aren't seriously trying to suggest that £60K salary is 'relative breadline' that really is mental mental mental.

Missingfriend
First, I object to your usage of "too much mental".

Then, READ THE FECKING LINKS.

The average wage is around £21 - 25k (depending on which website you believe).

BUT

So does that mean that if you earn £45k that you are in the country's top 10% of earners? Sadly it's not as simple as that. The ASHE is a sample of 1% of people who pay tax via PAYE. It doesn't include the self-employed - businessmen, contractors etc - who make up the ranks of the really wealthy.

A sample of 1% of those who pay tax via PAYE. The actual average wage is much higher.

Now, you may live in an area where £25k is a good wage (but I don't know where that would be cause even my brother in Scotland is on about that) but it is certainly not true that £60k is a comfortable wage.

Did you read the blog I linked to?

^Take a hypothetical family, living in London, both parents working. They rent a house that costs £800 a month, and have two children, for whom they are paying £300 childcare a week. They both earn the national average income of £21k.

Their combined net income is just over £2,600. For rent and childcare alone they pay £2k.

They have not yet heated their house, fed or clothed themselves or their children, never mind saved any money towards the British Holy Grail - buying a house. Or even towards their retirement. If they were at college then they may be paying back their student loan^

Someone on £60k is managing to get by. Of course you can get by on less, but it is by no means a great wage.

In Germany, where I lived for 16 years, it is normal for engineers and middle management to earn between ?80 and ?100k.

Missingfriend anyone on a salary of £10k would get topped up by WTT, CTT and HB in all likelihood. Their salary may be £10k but their overall income would not be anything like that low.

I am not suggesting that £55k is bordering on the breadline - I said nothing of the sort. I just said that it is pointless talking about 'average' salaries when discussing comparisons to a specific person; a man of fifty in a management/supervisory job that requires a degree of intelligence and experience, and in London. What is the point in making a judgement about whether he is overpaid compared to let's say, a 19 year old part-time shelf-stacker in Cumbernauld? That is all.

Missing friend, as illustrated above, you're being a bit niave. People who could live on 10k in London would be on hb. Now many people would be happy to have 10 pa after housing costs.
When I left uni the average grad wage was £18k. Now, I know uni is a priviladge the deprived often miss out on, but that is a 22 YO with a standard degree. How can you be shocked at 40k? Howcan you consider it rich? Someone at the v start of their career, who may never have worked or proved themselves in any practical way, earn half that. And they go onto increase their wage. Look at the number of grads.

I view them in the same manner as the members of ukuncut who are attempting to sue the government.

Both can fuck off.

Sorry meant to say a lot of people would be happy to have £10k after housing costs.

There are two types of City bonuses:

Guaranteed Bonus. This is guaranteed contractual and certain to be paid out regardless of performance. It is usual for high paid bankers to be given guaranteed bonuses for several years when they are poached from another bank or when their bank is taken over to give them an incentive to stay at the firm after the takeover.

Discretionary Bonus: depends on performance.

The bankers in this case are suing because to enforce a guaranteed contractual bonus obligation. Although I AGREE bankers have done many bad things and received unwarranted pay and discretionary bonus I feel these bankers in this case were promised a sum of money and hence should be paid.

Regardless of your views of bankers and whether or not they caused the recession, this is about contract and employment law. If most of the posters on this thread had (for example) started a new job with a salary of 30k and a guaranteed bonus of 10k in the first year, and then the company decided it wasn't paying the bonus, they would be up in arms. The only thing different for the bankers is the amounts, not the principle.

Ah, now its clear. It's only the banks that are greedy, not the people who took more money onto credit cards than they could afford to pay off / took out larger mortgages than they could afford.

Next time I get drunk in a pub I'll blame the landlord for selling me too much booze and trying to make money off me.

I must have misunderstood that banks are business then, not charitable organisations.

You may also want to look up a bit about CMOs as your grasp of sub-prime is interesting.

But as others have said, euro, a bonus that's guaranteed regardless of context isn't a bonus. It's salary.

I used to work for a mesh of commissions and bonuses, the largest of which were 'guaranteed' bonus. But if the company performed below expectations one year, that bonus wasn't paid - because it was a bonus.

I've put my 'refresh economics knowledge' project on hold for a little while so am not sure about this now, but suspect those bonuses were guaranteed against future revenues and the employers are now under strong pressure to alter that framework. This, too, would have happened at my old job: not without employee consultation but, basically, if the goalposts had to move they did.

When you take on a career which offers good opportunities to influence your own earnings through results, you also take on the fact that it may not turn out as you hoped.

MmeReindo ... well done for repeatedly bringing the topic back to its underlying problem: the gap between basic wages and basic costs :)

pasta cracking post

I'm not familiar with the details regarding the bonuses but if what MoreBeta said is correct then it sounds like the company promised a bonus upon certain conditions being met. In this case they stay with the company for x period.

This is common practice and something my company does when buying a company. We offer a golden handcuff bonus to key people of the company we just bought to make sure they stay. Otherwise what happens is the key people (usually the most employable) jump ship as they are also often the people whom need the salary the least (because they often had shares in the company we just bought).

So if that's similar to the bankers then of course it's wrong to withhold the bonus, if they held up their side of the deal.

Just because they are bankers, doesn't mean that they are all inherently evil and caused the collapse of the global economy. Otherwise it's like saying all police are corrupt because a few are.

Bravo pasta - living beyond your means doesn't make you greedy on Munster it would seem (as long as you're not a banker or someone on a decent wage that is of course...).