SALARIES in Britain's financial sector have surged in recent months, widening inequality amid the nation's cost-of-living crisis, a study showed on Wednesday (4).
Average monthly pay in the industry jumped 31 per cent in February from December 2019, propelled by high-earners, the Institute for Fiscal studies (IFS) said in a report.
The performance, driven by regular pay hikes rather than one-off bonuses, compared with a 14-per cent increase across all sectors.
The "return of bumper pay growth in finance" is fuelling a "new rise in earnings inequality", the IFS noted.
The news comes as many Britons face a cost-of-living crisis, slammed by decades-high inflation, rocketing domestic energy costs and rising taxation.
The IFS added that income inequality had improved before the Covid pandemic arrived in early 2020.
"Earnings inequality had been falling for some years before the pandemic hit, with low-paid workers seeing the strongest pay growth," said IFS economist and report author Xiaowei Xu.
"The recent surge in pay among financial sector employees - particularly among top earners in the sector - has led to a reversal of this trend."
That development "may imply higher inequality in household incomes in the years to come", the IFS also warned.
Xu added that this appeared to be the first time since the 2008 global financial crisis that City wages have shot that high.
"It remains to be seen whether this is a one-off spike or a new trend," she said.
The finance sector accounts for almost a third of the top one percent of all UK earners, according to the think-tank.
"So this surge in pay has increased overall earnings inequality, with the pay of the top 1.0 percent of all employees rising faster than the rest," added the report.
That contrasted with the period between 2016 and 2020 when low earners saw the biggest pay hikes.
TikTok is to lay off hundreds of employees from its London office, with the bulk of the cuts affecting content moderation and security teams, according to reports estimating over 400 job losses by the Communication Workers Union. Online safety campaigners, along with TUC and CWU leaders, have urged Chair Chi Onwurah MP to investigate the impact of TikTok’s actions on UK online safety and workers’ rights.
The strategic shift is part of a broader reorganisation of TikTok's global trust and safety operations, aiming to streamline processes and concentrate operations in fewer locations worldwide. The move has prompted significant criticism from safety advocates and politicians, raising concerns about the platform's commitment to child protection and online safety.
Safety roles cut
People working in the trust and safety team are most likely to lose their jobs as part of a global restructuring that prioritises AI- assisted moderation over human oversight. TikTok is moving UK content moderation roles to Europe as it rely on AI, putting hundreds of jobs at risk despite rising regulatory pressure under the Online Safety Act.
The timing is particularly controversial given recent revelations about platform safety failures. Report from Global Witness, a not-for-profit organisation have accused TikTok of "sacrificing online safety" through these AI-driven cuts, with investigations revealing that the algorithm has directed minors toward explicit content a serious breach of child protection standards.
The Communication Workers Union and online safety professionals have urged UK MPs to investigate the restructuring, warning that job losses could expose children to harmful material. The cuts represent a fundamental shift in TikTok's operational philosophy, prioritizing cost efficiency over comprehensive content review.
TikTok's restructuring putting several hundred jobs at risk marks a significant move as it shifts to AI-assisted content moderation. While the platform claims the changes will improve efficiency, the decision has sparked debate about whether algorithmic moderation adequately protects vulnerable users. As regulators scrutinise social media platforms increasingly, TikTok's focus on automation rather than human expertise may face mounting political and regulatory challenges in the UK and beyond.
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