One of the biggest failings in Western economics is the prevalence for across the board percentage pay rises. People getting paid £40k get double those on £20k when both get an equal amount in pay percentage increase. This has been part of the reason why top bands in large companies have gained such huge pay scales. Percentage rises are nothing like an equal pay rise. It is way past time unions recognised this.

Kind of Kudos to the Chinese for this. I hope they see fit to roll it out among some of the more powerful families in China also, and not just use it to claw back some money from the middle class.

BUT AT WHAT COST???

Can't argue with this if it's actually executed the way its being suggested. Good move, CCP.

This is the best summary I could come up with:

BEIJING, Aug 14 (Reuters) - Bank of China Ltd (601988.SS), China's fourth-largest lender by assets, has launched a countrywide exercise to reduce the salary gaps among its employees and mid- and high-level managers in response to Beijing's "common prosperity" drive, three sources with knowledge of the matter said.

President Xi Jinping launched the common prosperity drive in 2021 as an effort to reduce income inequality, which could threaten long-term economic growth and even the legitimacy of Communist Party rule.

The move follows pay cuts being made at investment banks such as China International Capital Corp (CICC) (3908.HK).

Commercial banks have suffered record low profit margins due to disruptions from the embattled property sector and local government debt risks in a faltering economy.

The sources said Bank of China has launched an internal "salary management system reform plan", after an inspection team under the Central Commission for Discipline Inspection found the bank's pay system has issues of "wealth inequality" in several rounds of investigations since late last year.

The move also comes as a surprise to state bankers, who generally earn less than peers at investment banks and other local financial institutions and who were spared from pay cuts last year after Beijing called for the promotion of common prosperity.

I'm a bot and I'm open source!

Credit where credit is due: great initiative, let’s see how it’s executed and maybe learn a thing or two from it

Why do pay cuts for managers instead of pay raises for other employees? How is a cut helping anyone?