In a revolutionary gesture, Ed Miliband and his party have decided a living wage is a cause worth supporting.

In this, if in nothing else, they are as one with Scotland's SNP Government. The price of decency, outside London, is now £7.45 an hour. This amounts to what the Citizens UK campaign would call a minimum income standard.

The price of existence in the English capital is a bit higher, predictably. It just went up to £8.55, the level, to the last precious penny, required to achieve "a minimum acceptable standard of living" in the great metropolis. Somehow I doubt that's exactly true. Still, the description provokes a couple of questions.

Acceptable to whom? It's not acceptable, clearly, to the many employers who decline to spoil their workers. If £7.45 or £8.55 counts as a minimum, meanwhile, where does that leave the official, occasionally enforced national minimum wage?

If you need to be told, the rate doesn't affect you. It stands at £6.19 for people over 20. For any 18 to 20-year-olds lucky enough to be doing the job they never dreamed of, it's £4.98. If you are under 18, you are entitled to £3.68. If an apprentice under 19, you should get £2.65 for every gainful hour of your young life. But don't spend it all in one shop.

Spend it instead on plotting to become the chief executive of a large public company. Had you been far-sighted rather than feckless, you could now be contemplating Christmas amid the warm glow of a 27% increase in earnings. You would be pulling down an average of £4 million annually and writing a card to George Osborne in thanks for ending the tyranny of a 50% tax band that raised – or so said the hard-up Chancellor – "nothing".

A year or so ago trusting souls were telling themselves that captains of industry could be shamed into restraint. Public outrage over sensational rewards would give them pause, it was argued. Austerity would then inflict an understanding of solidarity, and induce the happy thought that, truly, we are all in this together.

Indignation worked, too, up to a point. The point was reached when corporate remuneration committees decided to become better liars. Massive pay rises? The very idea. It has become hard indeed to find a responsible firm that has increased executive salaries by much more than inflation, or doled out bonuses. Lessons have been learned.

The chief lesson would be this: how to get a 27% increase in earnings without a pay increase? The key is in that fuzzy word "performance". Like a stampeding herd, Britain's top executives have decided they would rather be rewarded for performing well than suffer churlish comments over truckloads of cash. It all winds up as money, but you get a gold star for your trouble.

But here's a conceptual difficulty. If performance among the leaders of FTSE 100 companies has been 27% better than last year, and impressive enough to justify a rise in the value of "long-term incentive plans", why is Britain just out of recession by the skin of its teeth? Why is the 27% average not reflected, even slightly, in the GDP figures?

There's one reason. Most of us would have assumed, naively no doubt, that a 27% increase in rewards recognises a performance that played the opposition off the park. You must, surely, have beaten the competition into the ground to get that sort of pay slip. This misunderstands the philosophical elegance of a long-term incentive plan.

As it turns out, it does not reward anything as mundane as an improved company performance. Instead, it measures achievements relative to the stock market, and therefore to the competition. In other words, you can be rotten at your job for all the hours God sends. If your rivals were worse, the corporate Ponzi scheme pays off. No other effort is required.

Heaven forbid that a FTSE executive would manipulate the share price, of course, or tickle the market with an announcement or rumour just before that "long-term" scheme was about to show three cherries. In Britain – this cannot be stressed too often – that never happens. Instead, if reports from Income Data Services are to be believed, the corporate world has a new, inspirational motto: Less Lousy than the Rest.

A rising stock market helps, of course. The phenomenon is not often discussed. How can share prices and corporate rewards be heading ever upwards while the rest of us are lectured on restraint, budget cuts, deficits and debt? Perhaps because all of the foregoing is providing cheap money to those with golden tickets.

The Bank of England's quantitative easing tally now stands at £375 billion. Seen much of that in your street? Have you heard anyone – from the bank, the City, the Cabinet – contrast it with the £10bn Mr Osborne "must" cut from welfare? The big number is slight, in any case, when set beside the cash piles accumulated by FTSE 100 companies.

It makes £7.45 an hour seem a bit pitiful, but you couldn't count that as an accident. One problem with the living wage campaign, as with the minimum wage, is that it encourages some employers to do the least they can get away with, and then boast of the fact. That's if they are merely self-respecting hypocrites.

The other variety give rise, among other things, to an introductory paragraph in yesterday's Financial Times. "Companies," it reads, "must not be 'coerced or bullied' into paying their staff the living wage unless there is a sound business case, corporate chiefs have warned".

The "chiefs" in question were represented, on this occasion, by the CBI and the British Chambers of Commerce. Some of their members are currently attempting to minimise the tax liability on a 27% pay rise. Yet the poor souls are being bullied.

Red Ed Miliband's big idea is to "name and shame" them if they fail to pay the price of a packet of fags for an hour's work. His efforts to explain the concept of shame will be fun to witness. The duty to legislate remains beyond his pay grade.