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Should the US Copy Switzerland and Consider a 'Maximum Wage' Ratio?
Hugh Pickens DOT Com writes "John Sutter writes at CNN that as Swiss citizens vote on November 24 to consider capping executive pay at 12 times what the lowest-paid worker at a company makes in a referendum. Some say the idea of tethering top executive pay to some sort of concrete metric might stop American execs from floating further into the stratosphere. 'Here in America, the land of unequal opportunity, the CEOs of top-500 companies make in a single day about what it takes an average "rank-and-file" worker a year to earn, according to the AFL-CIO, the federation of unions,' writes Sutter. 'Democracy starts to unravel if a few people become wildly, ethereally successful, while the rest of a country struggles.' A $1 million salary worked for American CEOs from the 1930s to 1980s, says Lynn Stout. But CEO pay, including options realized that year, jumped about 875%, to $14.1 million, from 1978 to 2012, according to the Economic Policy Institute. 'What we've got is basically an arms race,' Stout says, 'where the CEOs are competing on pay because they each want to have higher status than the others.' Peter Drucker, the father of business management, famously said the CEO-to-worker salary ratio should not exceed 20:1, which is what existed in the United States in 1965. Beyond that, managers will see an increase in 'resentment and falling morale,' said Drucker. Stout has suggested that the IRS make CEO pay a non-deductible business expense when it's higher than 100 times the minimum wage. 'Limiting CEO pay to 100 times the minimum wage would still allow top execs to be millionaires,' concludes Sutter. 'And here's the best part: If the fat cats wanted a pay increase, maybe the best way for them to get it would be to throw political weight behind a campaign to boost the minimum wage.'"
But it will never happen. Because (looks up the current thing we're supposed to hate) because socialisim!
But it's not going to work in the US, where rapid growth is part of the ostensible "American Dream" -- which includes gobs of wealth.
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How many of them are actually useful to the companies that employ them, versus how many of them are an actual detriment to operations? What about the whole executive and management paradigm?
Can't we consider them a removable problem instead?
I'm the sort who prefers a more socialist state but I don't see how a wage disparity causes democracy to unravel. Bad education and information are what causes democracy to unravel. Not high pay.
The voters are the ones who keep voting for status quo. If they really are desperately unhappy they should vote for something else. But they aren't. So either they aren't that unhappy, or they are voting wrong. If they are voting wrong it isn't high CxO pay, it's bad education and/or information.
That's assuming of course the elections aren't completely Diebolded.
We should simply stop giving tax dollars to these companies enabling these huge differences due to inflation paired up with government contracts. Put actual supply and demand in place and the problem they're attempting to address goes away on its own.
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Like many things in life, it sounds good when you say it fast. Lets put this another way -- this is CEO price fixing. Its saying that, no matter what, CEO's can't be worth more than a certain amount (defined via an arbitrary formula). Like all price fixing, this will result in whatever marketplace distortions are required to *return* the marketplace for that good/service to the universally followed laws of supply and demand. In the end, you will accomplish nothing but adding more distortions to the marketplace...
Why bother?
So the execs will layoff the lowest paid workers and hire other companies in to do the job of those workers.
Or they will split the company and have one company own the other. Low paid workers in the one company and high paid workers in the other.
So many ways around this they will never close all the loopholes.
Should we?
Yes.
Will we?
No.
Why?
Republicans.
I know Americans don't want to hear this... but a large gap between rich and poor is BAD for society.
How do the rich get rich? By selling things to the lower and middle classes. They then put that money into economic development... which creates jobs, money that gets spent on more shit ... which goes back to the rich.
In the last 30 years, the rich have openly grabbed everything to themselves... and held down wages for the lower classes. So how do you do that and still get richer... you LEND to the lower classes. Hence the debt apocalypse we've been having.
Like it or not... the solution to all this is to income redistribution. You FORCE the rich to pay tax and put it back in at the middle and bottom - which they then spend on shit. The rich are too greedy and short-sighted to realise that this doesn't jeopardise their position... they get the money back along with development for society, the economy and less societal unrest and crime due to the massive wealth gap.
One of the huge problems we have regarding wealth in North America is that it isn't taxed. Not if you're rich. It's "not income", you "don't get paid", and so on.
TOTAL compensation of all types would have to be limited in this way, not only "their hourly wage", with very, very harsh penalties well above and beyond "pay back everything you owe" for breaking the rules.
And that'll never become law while the aristocracy's in charge of authorizing laws.
As if they are not going to just find some other way to structure their compensation packages to make it appear to be under the cap.
I am sure there are at least a dozen ways they will be able to make as much as they possibly can and never have it run in to any restrictions like the proposed law in Switzerland. If worse comes to worse they can probably use off shore companies to have the executives get paid in a country that doesn't have these sorts of restrictions.
It is nice to put the executives on notice that it would be good for everyone if pay rates were not so disparate, but really the law will make zero difference.
Wax on, wax off baby!
Yes, we should make them answerable, and their wages approvable, by the people who own the company and who profit or lose by its success! Oh wait, they already do that.
How someone that cares about the product they're making instead of how much they can line their own pockets in 2-5 years regardless of the the long term consequences? I see no downside here.
Seeing that investing is just like gambling: tax the gains like lottery winnings.
...
Seems to me that a cap on CEO to average pay take company size into account, the ratio should be smaller for a company with 100 employees than it would be for a company with 100,000 employees.
A Shadeless room is a brighter room.
American CEOs usually make more money by wrecking the company for short-term gain rather than steering it towards long-term success.
The people who suffer are the people at the bottom who lose their jobs when the inevitable "downsize" comes.
This vote is a vote to break that destructive cycle not just a vote to hate on rich people.
No sig today...
Using the Physical Resources Department (Janitorial Department) of a company as an example: All a given business would have to do is contract out the work of the lowest paid employees. Since those lowest paid employees would no longer work for the original company, the CEO's pay could increase accordingly to fall in line with 12 times the next highest employee.
Repeat until every different cast of employee has formed its respective company for contract based work. There will be the association of: Janitors, Nurses, Doctors, Engineers, Car Wash Attendants, McDonalds staff, Retail Clerks, etc. At this point society will still be classed based, and very much like "A Brave New World".
I wonder how this will effect executive pay in my company, I will be LOL'ing when they suddenly announce a move to a new country.
If the government adds a regulation, somebody will find a way around it.
All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
"Make your society egalitarian with this 1 weird trick!"
If we postulate that this measure will leave company profits unchanged, then the cap will send extra money somewhere else. Its backers seem to assume that it would go to the rank and file workers, but I think it likelier that the owners of the firm would begin experiencing a better return on their money. That cohort, too, is wealthier than average, though not by so much as CEOs since a lot of it is comprised of pension funds and mutual funds. In any case, the loopholes around this kind of measure are so numerous that it would be silly to pursue.
What we really need is to bring back serious inheritance taxes, even if some people want to call them "death taxes". In the long run, huge wealth is not a societal problem so long as it doesn't become dynastic. Rather than playing havoc with the incentives of the living via convoluted tax laws and weird rules, let's concentrate on fighting the growth of entrenched classes.
The US will go the way of China if this ever becomes popular enough to happen. The US business community, the far right, and the southern states will not tolerate such a change, and a "second business plot" will happen and be successful. The rest of the industrialized world has decent laws in place to protect its employees, but not the US and China. Where else will the fat cats go to if a maximum wage is adopted in the US? China? I would think that would not want to go to China unless they are assured they will have complete control there as well. With no place to flee to with thier capital, they will fight to the bitter end here in the US.
I like this idea. But if your salary depends on the salary of your lowest paid employee, you can:
1. as the TFA says, increase the minimum wage at your firm
2. replace minimum wage workers by robots. Probably not what was intended. But that will boost research in robotics, so that they can do more and more human things.
How about if we decide to value and honor people for what they give away rather than what they hoard? No one makes money - it is always taken from everyone else.
How about a law that says movie stars can only make 100 times what the lowest wage guy on the movie set makes? Perhaps recording artists should only make some multiple of what some guy in the studio does? Maybe authors can only make some multiple of what the editors at their publishing houses make?
Does anyone really believe laws like that that would lead to net improvements in those areas, or for society in general? Paging Harrison Bergeron. This way lies madness, folks. As P.J. O'Rourke put it:
Q: What does the "B." in Benoit B. Mandelbrot stand for? A: Benoit B. Mandelbrot
It would never work because there are many alternative means, besides salaries, to transfer wealth and it is impossible to control all of them. If a corporation thinks it is worth it to pay millions to a person it will find a way to do so.
Yeah, sure, no deferred compensation, or undervalued stock options.
Do you mean the paycheck received on a weekly basis? Do we count stock options or awards? Dividends from preferred stock not available to the average worker? Annual bonuses? Perks (such as the use of a company paid private plane)? Corporate "gifts" of all sorts?
Steve Jobs famously worked at Apple for a one dollar annual salary. However, does anyone here really think that he only made a dollar per year?
The idea has merit, but it is a foregone conclusion that people in power will figure out how to work around the "ratio".
The NSA: The only part of the US government that actually listens.
How about making them answerable to the workers?
This would limit the ability of corporations that rely on unskilled labor to recruit top leaders and managers during times of duress.
For example: McDonald's relies on unskilled labor. Let's assume an arbitrary wage of $10/hr for the lowest paid employee. Under this scenario, the top executives of a billion-dollar multinational would only make $120/hr, which is only slightly more than I make as a systems architect.
Now $120/hr to maintain status quo would be hunky-dorey, except when the company starts to struggle. Let's pick an arbitrary reason--Americans suddenly become health-conscious. Now McDonald's value proposition is nothing, the company is in disarray. We need to fire our top executives and hire someone with a more forward vision.
The problem is, nobody from other businesses (software, engineering, medical) where the payout is legally higher because shit jobs are contracted out, wants to take a pay cut to restructure and rebrand the struggling McDonald's. We are limited to second and third-tier execs, or ambitious people with no previous exeutive experience to lead the company. In a few years, this well-meaning, but short-sighted law has put EVERYBODY at McDonald's out of a job.
INSTEAD, we can tackle the overpaid executive in another manner: let's limit how much excecutives can make to a multiple of what the next highest person in the company makes. Those people are in turn, limited on how much they can make by a multiple of how much the next people in the command chain make, and so on.
For example: CEO makes 1.25x what the CIO/CFO make, who make 1.5x what the next higher people make, and so on, all the way down to the bottom, where shift supervisors make 1.2x more than unskilled employees. Now, a large multi-billion dollar company can afford to pay its executives higher than the lowest employee, by adding multiple layers of management. Smaller, more flexible companies that provide limited services, can stay competitive by reducing the number of management layers, and thus shrinking the gap between highest-paid and lowest-paid workers. This yields better results for small startups with highly specialized talent, where there is still a level of intimacy between the management/boss/visionary and his workers/college classmates/colleagues.
I just brainstormed and hashed this out quickly on /., posting as AC since I have negative karma still 13 years later, please provide thoughts/criticism/complaints.
Bah, the Swiss proposal goes too far. It's really simple. Let CEOs earn what they can. And it is earn, they make or break companies! All this talk of limiting their wages, is disgusting.
No. I've a far better idea. Don't have any limit on what anyone can earn. Let all earn what they can and will. Let the free market sort it out. Far more sensible.
And, to sort out the issues, let's just tax at 100% any earnings more than 5 times the minimum wage.
HELP MY ACCOUNT HAS BEEN HACKED BY AN ILLIBERAL ART STUDENT SET TO DESTROY THE INTERWEBZ!
There is huge outrage over requiring people to buy health insurance from a private health insurance company. That's considered the socialist plan in the USA when it is really what Republicans were preaching in the 90's. Real health universal health care coverage aka single payer, which is the global standard is considered outright communism in the USA. Even a minimum wage in the USA is controversial.
There will never, ever be a maximum wage in the USA unless there is a civil war and left wins. The military and the private militias are all composed of extreme right wingers, so in event one were to occur, America would likely descend into a religious theocracy that will make the Afghanistan Taliban look like French socialists in comparison.
This is just typical anti-capitalist politics-of-envy bollocks. "Democracy starts to unravel"? Really? Getting paid the going rate *is* the sign of a free society. Attracting the best talent cost real money. I bet most of the commenters here don't complain when their favorite sportsperson gets paid millions.
No, because the CEO should be answerable to the people who own the company. Now, you could argue that everyone who works at a company should have a share in the company and thus become part owners of the company... and I think that is a great idea.
So you would defend with a law proposal that would increase the shareholders say in what they pay to the chief executive?
Switzerland voted on that too. Why not give everyone enough for food and housing and healthcare. Only let the 1% get rich after society is taken care of.
It is an absurd proposal. It concerns something a government should not interfere with and it has no benefit.
It's not even theirs.
http://www.reuters.com/article/2013/10/31/us-oracle-shareholders-idUSBRE99U13720131031
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Stock and stock options encourage high-risk, short-term profit. Don't limit base salary, but do tie bonuses to medium-term profit (i.e. 4-7 years). Yes, even pay them bonus after they leave based on how well the company does.
We need to end the "messiah" view of CEO's. (non sequitur)
It's a really simple and effective way to distribute risk/reward.
Our Founding Fathers are spinning in their graves at the very idea of it.
Correct. Couple this with a requirement that all companies pay a living wage, and most of the problem would be solved.
They are answerable to the board of directors, whom typically own a decent amount of stock but not the majority many of the times. This leads to a "You scratch my back, I scratch yours" situation, many time between friends which conflicts with their purpose.
The actual OWNERS of the company (IE Shareholders) have zero say on this matter, incidentally, they also passed a law recently that allowed the shareholders there to override the board members on decisions of CEO pay and banned Golden Parachutes for them.
America is about allowing one to rise to their highest potential. The problem is that we have a system that does not encourage individual as well as small to medium sized business growth. The dinosaurs we kept alive on life support were too big to survive, not too big to fail. Jobs and financial growth happens rapidly and in greater numbers with small to medium sized businesses. Give me 100 startups with growth of 20% or more a year for the next 10 years over one large company any day. Even with attrition being high in startups, they will bring more job growth then any one large company is able to. We require an environment where all sizes of business can grow, but the small to medium grow faster just like in nature. Besides It's easy to circumvent for a large number of industries. Replace people with machines, remove the lower rank and file, make more money.
Note that the Swiss proposal is a tax on INCOME, *not* wealth.
Of all the ills of runaway Brazilification of the West and galloping inequality, disparities of income are not the same as disparities in net assets (e.g. wealth). This proposal does not touch wealth. Most rich people don't make most of their money in income (that's for the merely-comfortable); they make it through things like dividends and capital gains.
I doubt, if put into place, it'll move minimum wages much; the modern large company is really a feudal structure, where the lords take most of the loot, and the great unwashed masses make very little. That said, if the peons get comparatively tiny bit more, then that'll push some businesses over the edge.
The wannabes and corporate climbers at the top won't welcome pay restraint, as won't the doctrinaire right-wingers; long-suffering shareholders certainly will, since it's not unheard of, of the C-suite parasites to rape companies to death through anything ranging from excessive perks to full-blown control fraud.
Randroids will just hate this proposal, because they think that's what the boss-class are against.
A pay ratio should be the metric for achieving a more egalitarian society, not the means. If we tried to make it the means, corporations would just find loopholes. First they'd hire outside contractors to mop the floors. Then they'd form companies to provide the service of executive management. "The lowest-paid employee at our company makes $1 million, so I can make $20 million!"
What we need is a progressive individual income tax structure in which the top marginal tax rate approaches 100% as income approaches minimum hourly wage * 24 * 365. Close all the investment and offshore accounting loopholes. With this in place, we can completely eliminate all corporate taxes.
yes, but shareholders are generally the problem because they are usually "friends" of the directors i.e. of the same mind. They give pay rises to directors even when the public company is failing.
If a private company is owned by the person who risked his own money then they should be exempt from this kind of rule but public companies should be subject to a rule like this.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Not always. There's been a lot of CEOs lately who:
No there are not. No company "outsources to India, and fires all the workers" unless they are suicidal. Such a company would not survive six months.
There are companies that move a few projects to India, but never "firing all the workers" in the process.
This kind of anti-corperate rhetoric does not serve you nor you masters well, because it is wholly stupid and unbelievable.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
"American CEOs usually make more money by wrecking the company for short-term gain rather than steering it towards long-term success"
its not just American CEOs, they are in every country. CEOs should only get the average pay rise of the rest of the workers in the company. The only exception would be private companies.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
So you're saying that paying someone a higher minimum wage makes them poorer... hmmm....
Paying EVERYONE (not "someone" a higher minimum wage, makes MOST people poorer.
Because businesses can hire fewer people, so there is much more unemployment.
Because then it never makes sense to hire teenage labor, so kids can't find starter jobs and drain resources from parents more.
Because you can't hire as many people, you are labor constrained and the price of pretty much everything goes up by some amount.
And even the person who DOES have a job gets reduced hours because the amount companies can pay workers is usually pretty fixed.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If you can't find someone who cares enough to run a huge organisation for little remuneration, then perhaps that organisation isn't worthy of running.
Perhaps if CEOs were paid peanuts, the best CEOs would join organisations which make the world a better place, rather than ones which are just good at concentrating wealth. Do you really want someone running your company, who is interested only in their own wealth?
Whether it is a problem and whether France of Switzerland can come out of these laws unscathed (or bettered), we in America obviously can't hope to do the same. We can't even copy the rest of the modern world and implement a decent healthcare system, so who thinks we could solve this issue?
shareholders are part of the problem, they are of the same mindset. The shareholders very rarely do the job they are supposed to.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Wouldn't making a min/max pay ratio result in companies sub contracting out the work of the lower paid employee's to sub contracting companies? It sounds like a regulation that will only result in more paperwork and chaos without solving any problems.
It seems to me the bigger point is simply that the progressive tax system, which is meant to capture a lot of the diminishing marginal returns on such ridiculous pay, isn't setup to actually scale to the rates discussed. As it stands, the highest US tax bracket is in the 450,000+ range. Yet the pay range being discussed is in the multi-millions. Considering how the tax pay scale currently is setup, it'd seem that tax brackets should automatically extend as pay goes up*. So long as it's eventually an asymptotic at some point (say at 80 or 90%), then it shouldn't really matter too much how much people are paid.
Oh, and yea, this does presume that capital gains are no longer treated special and that money laundering through loans on stock or similar is harshly punished as tax evasion--ie, actually jail time.
*Something like low_bracket(x) = (x == 0) ? 0 : 16000*2^(x-1)+1, high_bracket(x) = 16000*2^x, tax_rate(x) = (x >= 16) ? 90% : 10%*5%*x; and yea, this doesn't consider the complexity of marriage and such so it's obviously not so simple, but for those curious the above reaches 90% at $524 million+. Feel free to play around with the rates if you'd rather see an asymptotic rate at closer to 50% or at different cut off. Never the less, the idea that all rich people are treated the same and yet there's much more effort to sub-divide the upper middle class (the poor and lower middle class seem well grouped) in the current tax code does tell you something.
Eurohacker European paranoia, gun rights, and h
How about making them answerable to the workers?
The workers are just as free to buy shares in the company as anyone else is. If they don't like it, they're free to start their own company where their co-workers can vote on how much they will be paid.
Only because we have tied political access to campaign contributions. Break this connection and let the average citizen's voice count for the same as the rich. Democracy is supposed to be one person, one vote. Not one dollar, one vote.
Have gnu, will travel.
I get the idea that market forces set the CEO wage through a combination of shareholders and customers, but I'm not sure it works well in practice.
Who tells the shareholders that the appropriate wage is for the CEO is $10 million? It's the boardmembers. And who are they? Other CEO's and highly ranked executives. They sincerely believe that company is above average and so their CEO is above average and deserves an above average salary. The marginal pay hike to the one individual is relatively mild to the company as a whole so there's no real market deterrent to this behaviour.
I don't think this Swiss proposal is the solution but I don't think the market forces are doing a good job either.
I stole this Sig
I may not make as much in an hour as a F500 CEO does in minute BUT who the fuck are these people to demand a cap
on what a person can have for income and what they can't??? What is it anybody's business how much I make??
Think of it this way.. sure today they're asking if we would go along to cap somebody's income we all consider "over the .. but what is going to happen if the day after they decide
top"
YOUR $150,000 yearly income is too much
then
YOUR $100,000 yearly income is too much
then
YOUR $65,000 yearly income is too much,
and then finally
YOU should not have anymore than the median income which at that point will have dropped to $25,000 a year (AND pay health insurance of course ;-))
Always when deliberating whether to chop of someone else's head, look at the proposition from a different perspective, like when it is your head laying on the block.
... is a way of getting you to not look at the unemployment numbers. And all the other joys of the Obama economy.
By Ben & Jerry's. It failed miserably and they were forced to find another CEO and pay more. Price controls don't work, and democracy doesn't suffer if some are rich, despite the wailings of left wing statist union corruptocrats. Also wage and price controls were all the rage in the 70s, and introduced us to stagflation.
But go ahead and try it. Like socialized medicine and this abortion called Obamacare, it will not work and will result in the Democratic party losing even more seats in Congress and the White House. Then, when a reactionary Republican gains control, you will see why you don't move too far from centrist thinking. Blowback is going to happen.
Central planning by know-nothing technocrats has caused more economic pain than laissez-faire free market thinking. Just stop it already. You lost. It's a proven fact you can't do it correctly.
I mean they say they want to tie CEO salaries to some multiple of the lowest paid employee. However I thought they made their big money through stock options and bonuses.(Hence once of the bigger complaints that CEOs do something that will boost stock price short turn and then take their stock bonuses and run, not caring that they fucked over the company long term.)
Did you know 80 to 90% of the moderators on slashdot wouldn't recognize a troll even if one dragged them under a bridge.
Here's why the CEO of my last company makes way way more than he is worth:
Compensation is set by the board.
The board positions are overpaid cush noshow jobs.
The board is appointed by the CEO.
If Slashdot were chemistry it would look like this:Cadaverine
I'm the sort who prefers a more socialist state but I don't see how a wage disparity causes democracy to unravel
Here's a thought experiment:
1) Allocate an array of floats and set each value to 1.0.
2) Randomly choose a float, weighted by its value, and increase its value by 1%, then replace it.
"Weighted by its value" means that the probability of choosing any float is it's value divided by the sum of all values in the array.
3) Repeat 2 above for a large number of rounds.
What you will find is that over time some values will skyrocket exponentially. This happens regardless of the number of floats or the amount of increase, or whether the increase is gifted or zero-sum (ie - whether the increase is deducted from the other values). It's an effect inherent in the "increase by percent" rule, which defines an exponential growth. It also doesn't depend on the initial values, so long as the value isn't zero (negative values will skyrocket the other direction).
This mathematical model underlies much of our current economy, with net (invested) worth being the float value, and compound interest being the rule. The old saying "the rich get richer, and the poor get poorer" is rooted in mathematics.
Different rules affect the rates in different ways: compound interest is an exponential increase on value, but inflation is an exponential drain. The difference between two exponentials is itself an exponential (unless they are exactly equal), so the result is still an exponential. Government subsidy is the zero-sum rule of increasing the value of one float by taking it away from others, &c.
Consider now the effect of a fixed consumption level: food, shelter, and so on. As the system becomes more mature, ever more of the total value is stored in fewer floats, and the majority of floats become proportionally small. As mentioned, government subsidies serve to increase a few values at the expense of others, as does inflation.
When the situation matures enough that most people cannot afford food and shelter, they will revolt. They will burn down the system and try something new. (Viz: French Revolution)
Something that takes us out of the exponential mathematical model might serve to defuse discontent and revolution. Whether capping executive pay is effective or sufficient remains to be seen, but on the surface it looks like a rational response to avert a foregone outcome.
You mean like at Walmart where I could spend 100% of my paycheck on it as well as every other employee in the company and still not make a difference as the Walton heirs still own 49% of the shares and aren't going to sell them for anything so the most we could ever hope for would be a deadlock and that would assume that the employees all bought the stock and were united enough to stand behind it and still have no say so in anything as it would take 2/3rds vote to overrule them which you can't when you can never have enough.
you could argue that everyone who works at a company should have a share in the company and thus become part owners of the company... and I think that is a great idea.
that is VERY bad idea, if i own part of company (stocks) i don't want for parts of my ownership to go to some other people that did not invest anything, it would be like if my gardener, personal chef, or housekeeper got to own part of my house just because they work here...
it is simple i am offering x dollars for each hour you work for me, you can accept or decline, nothing is stopping you to decline and work fro someone that pays more, or start your own buisiness
The Union's pay their own exec teams a lot, and they have to report it. This site has its own axe to grind, but seems to be the only one with information collated from public records:
http://www.unionfacts.com/cuf/
We, at least I, believe in rewarding the best producer regardless of anything else. (Well, their production needs to be what they are supposed to produce, not, for example, a ton of sales and a ton of unhappy customers.)
Capitalism makes money more important than anything else, which is how we see corporations dumping poison and paying the fines as a way of doing business. The moral compass is largely ignored in favor of money.
Money is simply energy with which to do things, it's not an end in itself. When a society have fallen into any particular sociology for long enough it tend to showcase it's shortcomings. I really believe the US constitution to be at the forefront, but I also see that USA is not the land of the free the way it used to be.
All sorts of wrong solutions are applied to the wrong problems because they are politically correct or gains more votes, or doing anything else means loosing votes. The careers of polititians, for example, looks like how to grab as much as possible, rather than ruling along your concience, which appears to get lost very quickly once in office.
When our lives were more perilous we, generally speaking, have many fewer of the above problems. Focus is on surviving and enjoying life. When life is generally easy it's all for himself. One of the few bastions holding on is sailing. Crew on sailboats tend to be friendly and helpful, unlike their motorized bretheren, which I find interesting. One must be in control ln a level not required of the other. One is more likely to suffer dire for wrong decisions than the other.
We need to re-evaluate our values and put more value into what each of us are doing that is helpful vs being selfish. It's hard for someone on the bottom, but I've seen whole societies who are on the bottom and are happy and unselfish, it is possible.
That's my rant for the day.
When the company's not "above average" it's pretty common for someone to organize the stockholders and vote them out. And doing a "good job" of what? If neither the people getting paid and the people paying them (stockholders) are complaining, who's harmed?
^mod up
I came here to say the very same thing.
I'm a left-leaning libertarian policywise & the minimum wage issue gives me trouble.
the progressive/liberal in me says we need minimum wage laws for the same reason we need worker safety regulations...
the libertarian in me thinks it's a temporary fix for a broken system
the Republican in me does another shot, does a line off a hooker's ass, & calls my wife to tell her I'll be late for Sunday school
but i digress...
I can't think of a good reason to oppose this whole minimum wage law Renaissance...but I see trouble brewing...
TFA is a sing of it...some sort of national "Salary Cap"???
Why don't we just raise taxes back to their...idk...Dwight D. Eisenhower levels?
Thank you Dave Raggett
Let's say I'm a CEO. Anyone below the 20:1 salary ratio gets "outsourced" to a different company sharing the same parent company.
Not going to happen. After replacing official slavery with economic one, group of American oligarchs is O.K. with the current status quo.
This type of mentality is still strong, their success depends on suffering others, in order to win some have to lose.
Don't expect CEO's to give up any gains, their families, often previous slave owners raised them to keep wealth within "trusted" circle .
Income inequality in the US has been like this before in the 1920s, then flattened out during the Great Depression into the 1950s. It'll flatten out again. The only question is "how?". It can be more or less disorderly. We can suffer from inequality for a long time though. Why does it cause problems?
I used to be part of the "oh noes! socialism" crowd, but when you look around the world and start thinking about it, you realize disparity is a problem.
I always like to pull this out of politics, and conduct a though experiment. The experiment is this: What would happen if one king had all the money?
That's the absurd projection of where we're headed. IMHO, what would happen is that money would lose its value. Long before the king had all of it, people would give up on money. They'd go to barter, or invent their own form of money.
Well, guess what? We've seen alternative currencies that people ignored like gold and silver become more popular. We've had people taking interest in novel currencies like BitCoin. Why?
Because the original money is hoarded by the wealthy. The original money game has been won. A strange thing happens when you win the money game though. Your money doesn't circulate, so it's no longer worth as much as money. Surprise, surprise, the elites are pressed to devalue the dollar. The Fed is just responding to the fact that a hoarded dollar cannot have much value.
So. If you want the dollar to have value again, it must circulate more widely. The dollar might die, but money will live on. A new generation will build wealth some other way, because the old generation is winning the money game, and... if they are allowed to fully win it they'll be left with a lot less than what they think they have. It may be due to loss of relevancy or loss of revolution.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
I've been having plenty of discussions on the topic. It's funny, as Switzerland is probably the country that needs something like this the least. The median salary is around 75,000 USD, and although there is no global minimum salary in the law, there are sectorial conventions. The salary for a supermarket cashier starts at around $4,000 USD per month, but a gardener with technical training, for instance, will not earn less that $4,600.
It's also one of the few where citizens can change their constitution easily and directly, i.e. one of the few where this could ever happen. It won't happen this time (according to the polls), although many voters I talked to just disagree with the number, not the principle.
The BBC has a nice article on it, showing the minimum and maximum salaries, and of course the ratio, for a few major Swiss companies. If you want to learn more about the direct aspects of Swiss democracy, the federal government publishes some information in English.
In Upstate New York State the minimum wage in $8.25 per hour, and x12 is $99 per hour or $205,920 per year based on a 40-hour work week. In theory, that is the same amount for the CEO of a super-regional bank as we as the POS community bank across the street. Same for the CEO of the auto parts store versus the CEO of Ford. How does one differentiate between a CEO managing 100 billion versus 1 billion? Or 1.8 trillion versus 1 billion. Don’t tell me it’s the market because setting the maximum pay at x12 removes the market, IMHO. I think you’d get better results by modernizing the corporate code. That is, stop treating people, executives and their boards, as untouchable unless they steal from the till. Make people responsible for more than profits and I maybe you’d have your answer.
The problem with the 12:1 or 20:1 ratio is that you take the mail-room guy who is earning minimum wage, and you limit the executives seven levels and thirty floors up. What'll happen is quite simply that this company won't hire any mailroom employees -- instead they'll simply contract it out. Personally, and professionally, I like that. But it won't solve your problem at all.
Not allowing a company to deduct more than 100:1 as an expense makes a lot of sense. It's also quite consistent with your laws in general -- it's not socialism at all. It simply because taxable revenue. It won't stop the executive from making the same amount as now, it'll just give you tax dollars when he does -- something that you desperately need these days.
no ,that is up to the shareholders, you know, the owners of the company. if they want to pay someone XX who are you or the government to tell them no?
have you seen my sig? there are many others like it but none that are the same
The wage gap is a symptom, not the problem. The problem is self entitled democracies, and the fiat money banks created to accommodate populist demands. It'd be like trying to cover up herion convulsions, with seizure medication. It reminds me of the old south. When the plantation masters beat the fuck out of their slaves, they wanted to micro-regulate the treatment of slaves, instead of getting rid of slavery. In retrospect, the people advocated those regulations, were just prolonging the problem, and head so far up their fucking ass, they were beyond stupid.
Today, our fiat/populist systems create all these credit bubbles, housing bubbles, stock bubbles, excessive government debt, high prices, inflated executive pay. And these retards want to go around regulating everything, instead of attacking the problem at the source. Fuck them, just fuck them. Irrelevant worthless idiots who will accomplish nothing anyhow.
So how do you do that and still get richer... you LEND to the lower classes.
Seems to me that a lot of our problems could be solved simply by making loans illegal.
The usual filthy shills will refer to people like Steve Jobs to justify the obscene differential between pay for ordinary workers, and pay for the 'top' people. 30 seconds of research will PROVE that the top people still get massive pay, even when their is absolute proof that their actions have been ruinous to the company.
Sophisticated, moral societies minimise crime by minimising the expectation of a large prison population (note that the USA does the very opposite, driving the expectation of a massive, growing prison system via endless propaganda in its popular TV dramas). The same thinking applies to distribution of wealth in society. Americans are TRAINED, like very dumb dogs, to expect mega wealthy elites to exist on the backs of workers who are frequently working two jobs to get by. America is the ONLY major nation on this Earth where 'socialism' is a dirty word. And 'socialism' is kept a dirty word (despite the fact that the USA was one of the first nations to integrate socialist mechanisms into its forms of governance) by carefully crafted mainstream media and public school education programming.
At least in the USA, the innovative side of free market capitalism produces some very impressive results- an 'upside' to an otherwise fairly dark system. Europe, on the other hand, is a different matter. No European (including the UK) CEO impresses in any way, save for their greed, incompetence, and desire to maintain a class-system of 'us' and 'them'. Older European nations have a history of corruption and elitism that dwarfs any pale copy in the USA, and every time true 'people power' arises, the heads of kings (or the modern equivalent) rightly roll. Sadly, this achieves little, since the people orchestrating the chopping are but the new, less publicly obvious, elites. And sooner or later, this new class of 'masters' places their people into the same CEO positions.
The most socially advanced nations in Europe have things like OPEN TAX RECORDS where, in theory, you can trace the pay to ANY individual. But, in practice, the same old scumbags have undeclared foreign bank-accounts where the usual bribes etc are deposited. And yet, a society that works to 'seem' cleaner will become, generation by generation, actually cleaner. Some of these European nations, for instance, were enthusiastic supporters of serfdom, and judicial torture, only a hundred or so years back. But be aware that the social engineering that moved them forward in the 20th Century often came with a price- morality imposed from the top, via ruthless brainwashing in state run schools. Recall that several of these nations, via FEMINIST doctrines, made adult-child sex, and child pornography LEGAL for a period around the end of the 1960s, and actively suppressed the voices of victims of this abuse, claiming that said victims were 'demonising' their abusers.
Anything in society that is ruthlessly imposed top down (like Obamacare, and I'm an absolute supporter of the NHS in the UK, and similar systems around the world) is evil. The 'people' are not children, not slaves, not the 'lesser' and certainly NOT cattle. "What is good for the 'people'" must always be 'of' the people in some fundamental sense. And the great lie sold by mainstream media propaganda is that the 'people' never know what is good for them. The mainstream media exists to give the most distorted view possible of how ordinary people actually feel, think and behave.
Ordinary people think extraordinary achievement can deserve extraordinary rewards, but know that most people in positions of power got there through family connections, usefulness to corporate interests, willingness to front the interests of some powerful body, random happenstance, 'buggins' turn' , or any one of a thousand other unimpressive reasons. Such people should NOT get unreasonably rich. Golden handshakes, parachutes, large stock gifts, and large pensions should be illegal UNLESS it is a private company where the people at the top also DIRECTLY risk their actual wealth. If there can be no great
A "public company" doesn't mean it's owned by the general public. It means there exists the opportunity to purchase it. Just because it's stock is publicly traded doesn't give us executive right of control over how it's run.
CEO salaries are set by the board of directors, not the workers or even the shareholders. Exec wages are high because the boards are stacked with people rubbing each others backs.
Anarchists never rule
nothing is stopping you to decline and work fro someone that pays more, or start your own buisiness
This is where you're either being dumb or a lying prick with an agenda.
SOCIALISM!
This would be useless. The very rich don't get paid wages because wages are heavily taxed. The income of the very rich is concentrated in dividends and capital gains, which are taxed much more favourably.
A law that limits the wages of the very rich is a ridiculous idea. The very rich do not earn wages (nor would they ever want to earn wages).
no, but it also doesn;t mean the CEOs own the company either, they are just employees
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Then you'll have no problem finding a shareholder vote on executive pay that was binding.
Trying to regulate this, as others have pointed out, won't work. There will always be those who can and will find a way around it. I remember Ben and Jerry's attempt at a 5:1 ratio - they had to give it up after they couldn't find/retain high level staff to work for them. Better would be a "name and shame" campaign, offering consumers a chance to take their business to companies who were closer to 20:1 than 400:1. If consumers don't care enough to make that decision in numbers great enough to have an effect, than they are effectively endorsing the high salaries. Not to mention the fact that something like this could NEVER get passed in the US, with the 1% having such a tight control on the way things run.
See how it works. Look at what really happens when you do this, because I am confident that this law will solve not a thing and will instead create a new atmosphere where the best companies will attract CEO's with other perks and other bonuses. A company car and driver? Check.... Its going to become all about the benefits, and while the CEO is going to be swimming in benefits (as companies want the best and will shell out for this) the lowly worker is going to get fewer and fewer benefits as his salary does increase slightly. Perhaps its just human nature, but people will align it so that the lower rungs of the company still have the worst jobs and the worst benefits. And things will not change even one iota as exec's end up cashing in on all sorts of benefits that in the end does keep their pay higher in proportion and the lowly worker is in the same boat as before. But sure, we can wait, but I am willing to bet those things happen, because the rich typically get rich by out-smarting the system in some way normally.
commodity & can be instantly replaced by a lower paid commodity.
Yeah, so, what is the long term effect of this strategy?
In many cases the US government has specifically intervened to not allow capitalism/free-market to works as it should. You see, if a company goes after the maximum risk and fails taking down the economy with it, free market is supposed to let the company die and be an example, so that more efficient companies can replace it and be aware of the risks. Instead, the government bails out the company and the CEO gets a golden parachute, which pretty much breaks the free market model.
Violence is the last refuge of the incompetent. Polar Scope Align for iOS
You actually think any policy like this would get past a first draft from an intern? Any such a ideas would be quashed faster than you can say "campaign contributions."
America is fucked.
At what point does an exorbitant executive salary burn money that should be returned to the share/stakeholders? Personally, I think we've reached that point in the US. I believe executive pay should be in the hands of shareholders and out of the hands of handpicked compensation committees. It's likely we wouldn't have a need for this type of legislation at that point.
I would vote for it. I wish it was on a US ballot somewhere. They should tie the head to the feet and keep the organism from becomming too serpent-like.
The cap should be based not on the minimum wage of the company, but on the legal minimum wage. It doesn't offer the direct incentive that a ratio within the company would, but is not so easy to game (outsourcing doesn't help), and would change the politics around the minimum wage in a useful way - influential people would gain from an increase in the minimum wage, rather than from keeping it down to take more money for themselves.
We would put an income tax of 94% on the absolute highest income, and at the time a great many CEOs were running their own business so this created an incentive to keep the money in the business. This kept their own pay at a more favorable ratio to their employees.
It won't ever happen in the United States, which is effectively a corporate dictatorship. Are the backers of the ruling regime really likely to install 'representatives' who will curtail their pay? Not likely.
No doubt the elite would just find other ways to redistribute wealth to themselves anyway. That is not to say, that we shouldn't progress, and close the loopholes, that curtail the obscene, and unjust enrichment, of often deeply mediocre, and morally bankrupt executives. The system the United States currently is in many ways similar to Socialism, except it actively employs Socialist tactics in ways that assault the ordinary citizen, instead of investing in them. The workers are not stakeholders in the means of production. Wealth is redistributed - just like Socialism - except it is redistributed to the rich. The state ploughs massive subsidies into certain parts of the private sector, which are inefficient, corrupt, insolvent instruments of massive fraud, or massive greedy profiteers producing wares that either directly or indirectly attack the interests of the majority. Government is an extension of the corporate entities, a hallmark of fascism, and outlined by the late Italian fascist dictator, Mussolini.
The Anglo-Saxon form of capitalism also strongly favours milking companies for all they are worth, in a very short-term and near-sighted way, at the expense of long term stability, workers wages, workers rights, and long term growth.
I am just glad that I am not an American.
So you'd oppose a law proposal that would increase the ability of shareholders to decide how much they pay someone because it's up to the shareholders to make such decisions and no one else? How does that make sense? Did you even read the post you were replying to or are you just lacking reading comprehension skills?
Our market are (thankfully - see polution, health, company script scam, worker security from the robber baron time) regulated to the wazoo. And what is not regulated tend to natural monopoly, and not even counting that copyright, patent, distort the market. And don't start me on "information" as it is supposed to be the value we use for the free market, but it is distorted.
There probably hasn't been a real free market for quite a time.
C. Sagan : A demon haunted world:
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visit randi.org
No, Communism is worker controlled means of production. Socialism is using a large, powerful institution to regulate the distribution of wealth.
Words can and do change their meaning, and people can improve on systems through careful application of basic Scientific principles. e.g. not taking anything on faith and being willing to admit when you're wrong. Socialists have long since recognized that the State can't take over the means of production. You never get past the "Dictatorship of the proletariat" phase. Instead we advocate a complex system that lends itself well to checks and balances.
That's sorta what makes real Socialism work. The only "principle" we have is that everyone is entitles to a good life, with food, shelter and health care. And we're willing to admit when we're wrong and adjust accordingly. The result is a system that is harder to maintain but also harder to exploit.
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Do you even understand what a shareholder is?
I don't think you do. Hint: They are the ones that stand to lose when "a public company is failing".
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
This depend of the kind of company. While this is very true for a lot of big companies, in a country like Switzerland, the majority of the PIB is moved by smalls companies where the few shareholders are also the executive of the company. The initiative will in fact only affect a few very big companies where the executive and the shareholders are very decoupled.
This is already done in Switzerland: http://en.wikipedia.org/wiki/Swiss_referendum_%22against_rip-off_salaries%22
Swiss citizens vote on November 24 to consider capping executive pay at 12 times what the lowest-paid worker at a company makes in a referendum.
Senior executives then move to a less hostile environment and manage their Swiss investments through subsidiaries.
The resident Swiss manager loses prestige and power at home as it becomes clear that the important decisions will be made elsewhere.
The second-rate man stays on while talent and ambition moves on.
That doesn't promise well for the worker on the line.
Japan had laws like this for years, and they kept worker wages high. It was only when the laws were repealed you started seeing traditional western style wealth inequality. Now Japan's back to tent cities for the homeless. Something I never thought I'd see in that country.
As for the rich using loop holes; just because something is hard to do doesn't mean you don't do it. I've noticed that capitalists throw their hands up and say "I give" at the slightest challenge. As near as I can tell the "Free Market" means leaving things to chance and hoping for the best. I've never once in my life seen a situation where people just let the chips fall where they will and had it be anything more than a cluster-!#$@.
What I'm saying is the solution to our problems isn't hoping some vague principles and ideas will guide us to utopia (an "Invisible Hand" if you will). We need direct human action followed by careful adjustment of policies based and continual testing and data collection. You know, someone should give that method a name. It sounds kinda, I don't know, "Scientific"...
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Ah yes, welcome to corporate America, where CEO oversight is made up and the threat of firing don't matter. All is forgiven if you you ruin the company's future but turn a profit this quarter, and you get a golden parachute once you're done ruining the company. (e.g. see: Carly Fiorina's destruction of Hewlett-Packard as a prime example.)
How about making them answerable to the workers?
When the workers start paying the CEO's salary, then he/she absolutely should be answerable to them.
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
Your example is a private case, not a regulation.
CEO pay should be set by the stockholders. This is a right of ownership that has been taken away from stockholders. Stockholders need to take it back.
Each year, stockholders get the proxy, and put in a number. The maximum pay for the top 5 employees (the SEC tracks that) is then limited to the weighted median (by stock ownership) of that figure.
The right to vote the proxy belongs to the party that pays taxes on the stock. Pass-through entities like funds have to pass through the voting rights. For funds, holders can choose to pick a figure for the whole fund, and that's their figure for all stocks in that fund, or they can pick a figure for individual companies.
This would put an end to excessive CEO pay for loser companies. Some CEOs are worth paying a lot of money, but that's under 10% of the CEO population.
CEO salaries are set by the board of directors, not the workers or even the shareholders. Exec wages are high because the boards are stacked with people rubbing each others backs.
The Board of Directors is elected by the shareholders as a whole. If the company is running inefficiently because the Board is giving unreasonably high salaries to the execs, then the Board will be voted out, or the company will be ripe for a hostile takeover (which is basically the same thing: a majority of shareholders votes out the current Board.)
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
If I want to buy or sell any product I want, or inject any substance I want into my body, who is the government to tell me no?
Oh wait, that's exactly what happens. The government already sticks its nose into the personal business of every citizen, but when it's a rich guy's pay on the line, we'd better stop and evaluate what we're doing, right?
If you own the company, you'll still own it if it gains value. This is about pay, not about capital gains or investment.
No. The government already meddles too much in our economy.
No, we don't, actually. If we did, the shareholder votes on pay would be binding, whereas most of them are non-binding. (And the ones required by law are non-binding votes.)
Are the janitors now going to be paid .05/year?
What huge responsibility? What is the worst *individual* consequence of doing bad job?
Compare to the responsibility of a mundane low-pay bus driver. One lapse in concentration at wrong moment, and there are dozens of immediate deaths. Including the driver him/herself.
If I still participated in the moderation system, or even bothered logging in I would mod you insightful. You actually get it, which is rare on /. for these kinds of things.
It'a obviously unfair for anyone to earn above the maximum salary before said law goes into effect. Therefore the only feasible solution is to reposess any funds, property, investments, etc that would be in excess had the law been in place.
A CEO has never been fired by a vote? If it includes proxies for shareholders, it counts.
How does that work exactly? We have billionaire CEOs who technically only get "paid" one dollar.
Do they have to whittle down their stock options until they only make 100k a year?
I'm fine with that actually, but good luck getting it in the US...
You're joking, right?
No worker can afford stock. Those who can vote themselves as much benefit as possible, just like congress.
Some CEOs make their entire livelihoods out of destroying companies to benefit the wealthiest stock owners who vote them into power in the first place.
Open your eyes.
This is not stringent enough.
The new law should state that nobody should earn more than eight times the minimal salary for the country concerned.
That will help reduce inequality. Make it an international treaty.
yes, but shareholders are generally the problem because they are usually "friends" of the directors i.e. of the same mind. They give pay rises to directors even when the public company is failing. .
I think you mean board members, not shareholders?
The invested most of their free time making your dumb ass rich. Your "ownership" should only be the % of work you actually did. Fuck off.
There are two approaches:
- limit the ratio to within the company
- have the ratio based on minimum wage
I feel the first approach may be the better solution to start with, since this is an environment where a CEO controls the wage scale. If the CEO wants more money, then they would have to consider how much the staff is being paid and how to boost things overall. This means that they can't tell the staff there is no money, while allocating themselves more if the pie. If they can't afford to raise pay overall, then maybe they need to see how they are running the company. If they can only pay people more short term, then give them a bonus, since that does not need to be maintained the next year.
The second approach is a bit more complicated, since a company may be performing well, while the rest of the economy is not doing so well. There is a risk that even a non CEO in a successful company may pass the 20:1 ratio?
Jumpstart the tartan drive.
there is no need for such a law is the point. that is how it currently is. the shareholders have a meeting and decide what is fair pay for their CEO, the less the government gets involved in day to day activities the better off we all are.
have you seen my sig? there are many others like it but none that are the same
frankly i agree with you, if you want to buy XX or use YY, as long as you dont physically hurt anyone (other than potentially yourself) physically or steal from people to support your habit, go for it. No the government should not be in the business of regulating our bodies, The liberals are always talking about how the government is meddling with "womens bodies" I say take it a step further, keep the government out of all our bodies.
have you seen my sig? there are many others like it but none that are the same
That does not protect the wages of people who are substitutable and thus possible to pressure downwards in terms of wage.
Yea, maybe the company wouldn't work without them, but you can easily play them against another to become desperate and accept low wages.
The government already sticks its nose into the personal business of every citizen...
Is your argument that because government does one thing that is wrong it's OK if it does other things that are wrong? Really?
Just change their salaries to $1 and get paid by other methods such as bonuses or stock options etc?
Where did he say it was? It's an example of where the shareholders decided on executive pay and it was ignored by the executive.
Hence, it is not their say.
We would just see companies subdivide themselves by pay grade.
Low wage workers would work for one "company"
Management would work for another "company"
Top execs would work for yet another "company"
And that's assuming enough money isn't thrown at lobbyists to crush any proposal before it ever becomes a thing.
I don't think things are quite that dysfunctional.
Most of the actual ownership is represented in the board (most of the time), by proxy or otherwise.
It's just that executives tend to be good at selling this superstar payroll leads to superstar company performance pipe dream...
So when you don't get that best CEO, is the pay reduced for the chump you managed to get?
No?
Then your assertion is incorrect, isn't it?
Which is breaking apart into holding companies and subsidiaries. Buy-n-Large holdings will have a highly compensated staff, which oversee subsidiaries whose CEOs used to be called "district managers".
It already happens a lot to provide firewalls for labor law, workplace safety compliance, and undocumented immigrants. All of the workers are actually contracted from "Fly by Night Staffing Co.", which is contractually obliged to enforce workplace safety. And if someone gets injured, they go bankrupt and all of their former staff (who didn't make waves) get offers from "Under the Table Staffing Co.".
This sort of thing has been in the news a lot lately regarding cell tower maintenance. It's all subcontacted out by wireless carriers so they can evade liability for schedule pressure in bad weather.
So while the idea is interesting, I don't see how the implementation achieves the stated goals.
Yes which is exactly what the GP stated when he said " Try buying a large screen TV in Venezuela this coming January. "\
Oh wait a Large Screen TV is not a staple.
If you are going to rag on someone for bad analogies, maybe you should follow the thread first.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
You really don't know anything about American business, do you? So, for example, how did Jack Welch at GE "wreck the company for short-term gain rather than steering it towards long-term success"? Can you even give an example?
God, I swear, being liberal means never having to think, doesn't it? You just FEEL your way to the right answer ...
Oh wait a Large Screen TV is not a staple.
If you are going to rag on someone for bad analogies, maybe you should follow the thread first.
In the US; a large screen TV is a widespread commodity product, that you won't be waiting in line for hours to buy.
It is not a "staple" in the sense that it is a life essential product such as water or flour; HOWEVER, economically speaking, a large screen TV is a staple in the US.
In Venezuala, things are different, partly because of socialist promo behaviors by officials and government political fiascos.
Ever stop to think that the CEO wouldn't be paid without the labor of the workers?
The answer is usually no.
Go off and find a store and buy 32 oz of soda.
However, since he and the businesses have an agreement with each other, what the hell business is it of yours if the decision is to not sell 32oz sodas?
if you're willing to admit you're wrong when new data becomes available. Socialists are. We're also not willing to let something as complex as an economy or as important as the future of civilization be dictated by random chance and the whims of a few lucky (or ruthless) winners.
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I wasn't able to find statistics but my understanding is boards don't get booted that often, and if they are afraid of being booted "I helped recruit star CEO X" is a better argument to stay around than "I made sure we paid the CEO 2% less than we would have otherwise!"
As for doing a "good job" there's a few ways that might be the case. First the CEO's increase in pay might cost the company more than the increased revenue over the cheaper candidate. Or the lure of CEO pay might draw talented individuals into management away from other jobs where they might do more good to the economy.
The market is good, but it isn't flawless, and large organizations have the ability to build structures that subvert the will of the market just as effectively as government.
I stole this Sig
The CEO never makes a damn thing that is sold from any company.
The workers do all of that.
And that means the workers are paying the CEO's salary.
The big rewards should go to the producers, or to the providers of risk capital. A CEO is a hired hand and does not deserve entrepreneurial rewards.
CEO pay is no more a free market phenomenon than Congressional pay. Compliant boards and "compensation consultants" (wonder who pays them?) rig the system.
The current system is like paying Michael Jackson minimum wage while his business manager becomes a centimillionaire.
Unless, of course, you think Carly Fiorina made her money with her Randian inventions and "creative contributions".
we don't think laws are going to do anything magical. But we do think doing something is better than nothing. And history pretty much bears that out. Things got better when we stopped letting bankers do things that caused busts. That's what Glass-Steagal was going and it worked great until Clinton gutted it (because he felt being pro-Corporate was the only way to win a US Presidential Election).
We _can_ learn from the past. We _can_ do better. The only magic I see is the slight of the "Invisible" hand swiping my wallet...
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They can go home, but they don't get to take the ball. If they don't want to participate in the economy they don't get to own it. That's what "Eminent Domain" is for. If you let them a small group of people will claim ownership of everything. What you end up with is a huge amount of under utilized capital. It sits around doing nothing and the entire economy grinds to a halt. Before long you see "Dark Ages" like Europe. Once that happens you either tax the rich and use the taxes to get people moving again or wait for a plague to kill them off...
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Tax all income over $100,000/year at 100%. Done and done. And that's income, not earned income. Income from wages, interest, realized gains on stocks - everything. There is no excuse in a civilized, wealthy society for a single person to be homeless and hungry.
Truth is, the top tier richest aren't that way because of CEO salaries. All it would do is punish the CEO's and put all the power in even FEWER people's hands with even less people able to challenge it.
If they are really that good as opposed to being experts at looking good, they can
o Found their own company and get rich as it grows
o Buy stock in the company they lead to success and profit from that. That's "buy", not "be granted options".
They will just find other ways to pay them the money like stock or give them 30 jobs each making X.
Maybe just raise minimum wage people or change the Taxcode to increase the tax rate but offer more deductions for paying people.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
As long as you can still legally own your own business, how does this change anything?
Instead of a 20 million dollar salary, they will just agree to give them a 5 percent piece of the profit, annually. Or some other incentive.
If you are going after the obscenely rich, increase taxes a huge amount on the multi-multi-millionaires and billionaires, going after CEOs who make a handful of millions every year is akin going after the middle class.
Troll is not a replacement for I disagree.
While I like the idea of a maximum cap, I see three huge problems. First, since the top moneymakers practically own everything from media to politicians (I'm just waiting for the "This candidate sponsored by Johnson & Johnson" signs), convincing them to do this will be next to impossible. Second, if they did somehow slip this through, most CEOs will leave, possibly taking their companies with them, to a cap-less place. (They've been doing it to factories where workers wanted rights and wages, why wouldn't they move out of country to protect themselves from caps?) Finally, 12:1 is way too low to set that ratio should it happen in some countries like the U.S., who may lose incentive to work towards becoming responsible for leading larger companies. (I could see 20:1, legitimately - a little too high in wage differential, but about the right spot where loss of incentive might be very minimal.)
In addition to maximum caps, continuous minimum wage increases - where the wage increases as the cost of living goes up so that people can continue to improve their lives without demanding that the government steps in to help them - and a fixed flat tax rate across all states and wages, we need to consider options in case of such a fallout on the major CEOs and brands leaving here. I'm against any idea of banning companies from outside the US from selling goods and services, even if they do move - some of the stuff may prove to be inaccessible to us any other way. However, I'm for encouragement and assistance in entrepreneurial growth, and think that building companies from the rubble of those companies that do leave is a great way to get back at those that do leave, and providing adequate competition is one of those necessary steps towards getting all companies to play equally.
One last thing that would need to be done is the encouragement of such caps in all countries with organized governments. As I stated before, any cap is going to spook some CEO's into taking their countries and running, and they're going to do what they can to scare other countries, particularly developing countries where they can get away with slave wages, into not doing this. The more countries that fall in line with some of these actions (if not all of them), the fewer places there will be for such cowards to run to. Making sure almost everyone can live without government dependence and afford to grow and achieve greater opportunities not only benefits the U.S., it benefits the world markets and economies.
How many Microsoft employee has to make due with the minimal wage? If that number is zero, there might be the proof that you can get to be world's richest without damaging your place of work. Workplace can be damaged by other means, possibly involving chairs like a certain other executive have proven.
Oh wait, it already does. Kiss our constitution goodbye. The terrorists got elected into office have made treason fassionable. Frightening how we have fallen to be culturally so much like was fortold in Atlas Shrugged.
We're foo barred . Hope the libs are happy with themselves.
Geez, way to miss the point of the article.
Capping CEO pay will do absolutely nothing, because they will just find creative ways (see stock option vesting) to get that money.
What needs to happen is something closer to "The highest paid PERSON doing any work for the company (usually the CEO, but can be anyone) can not exceed a 1:12 ratio of the lowest paid PERSON doing any work for the company" So if the janitor is being paid under the table 5$ an hour (about 10,000$/yr), then the CEO should not be paid more 125,000$/year
This also solves two other problems
a) All employees are now full time employees, since anyone not full time would destroy that ratio (places like walmart and unionized stores sometimes have a ratio of 20:1 of part time employees to full time employees that are only given 4 hours a week)
b) Outsourcers who in turn hire people for minimum wage or under the table.
A more creative solution should be a ratio ladder.
The highest paid person in the company, their immediate subordinates can not be paid less than 75%, this ratio goes down the line to a maximum of 6 steps
CEO (100%)
Board/Managers (75%)
Supervisors (54%)
Team Leads/shift-supervisors (40.5%)
Full time staff (30.4%)
Part time staff (22.8%)
So in theory a CEO who makes 14 million, would be paying their part time staff 3.2mil. To avoid that the CEO should be paid 225,000$ in company stock (lowest paid would be 100k as an example,) while everyone else has the option to be paid in cash or in stock.
I use 75% as an example because it's the easiest to see the end result. A more realistic ratio might be
CEO (100%)
Board/Managers (35%)
Supervisors (26%)
Team Leads/shift-supervisors (18%)
Full time staff (10%)
Part time staff (8%) = 1:12 ratio
At any rate, CEO pay is not the only problem, the other half of the problem is the company's performance versus the stock price which is why I mention it. A CEO and it's board/management must have their pay >50% in stock, otherwise there's nothing to stop them from looting the company by being paid exorbitant amounts of cash regardless of the company's success or failure. Anyone below Management should have the option of all cash or "minimum payout in cash, rest in stock" for lowering tax burden reasons.
Like Tim Cook (Apple's CEO) probably deserves what he earns from Apple, because the company is successful, but the wild swings in stock price raise some eyebrows. Where as someone who runs their company into the ground (Microsoft, RIM, Nokia, Hostess) should suffer the consequences of the stock price devaluation.
change the laws back to only individuals can contribute up to $2000.00 and that's it - no private pacs, no outside donations - nothing
just citizens of the united states backing who they like with their own money. Make it illegal for private industry to donate.
that right there would fix a lot of your concerns. Don't hate successful rich people because you are a useless parasite who's contributed nothing to society.
Where a given star makes X million per year? Since the star is not a top executive, is this business model exempted? Or does the guy who mops the floors make
X / 12 per annum? Is anyone seriously going to suggest paying a janitor $160,000 simply because the team's star makes $2,000,000? Or is someone seriously going to suggest telling, say, Peyton Manning, that his salary is capped at $1,000,000? And if the stars are exempted, does it make sense to have a CEO making far less than one of his employees?
Do some PRIVATELY OWNED companies pay their top executives, IMHO, far too much money? Yes.
Does it make sense for government to impose arbitrary rules affecting the pay of the employees of PRIVATELY OWNED companies? No.
How is it the business of government to be directed by the public to use force to coerce a company and CEO to not engage in a mutually acceptable transaction that is - other than this particular arbitrary delineation - legal?
Hey let's get more folks health care by making a rule that any full time employee (over 30 hours) gets health care.
Great, now it's really hard to get a full time job.
But that sure are a lot of part time jobs without benefits.
Hey, lets make a rule that the CEO can't make more that 100x the lowest salary.
Great, now all the low wage jobs are outsourced temps.
Or worse, there are no corporate offices in the US.
While I agree that the social contract needs work,
these folks seem to have no clue as to what to do.
Maybe China would be kind enough to teach us what we have forgotten before it's too late.
Your unnecessarily rude and abusive language should also exclude you from further comment. Why can't you just state your argument rationally, sans insults?
"just a vote to hate on rich people"
Why not? They obviously hate the rest of us.
I have long felt something like this is needed but a simple wage cap isn't the answer.
It needs to be company by company ... no one in a company is allowed to make more than 25 to 50 times the lowest paid employee.
This would force the CEOs to look at how much they are paying their employees
At minimum wage the Full time gross is 15080 This would allow the highest paid person to be paid 377000 to 754000.
A company with the lowest paid employee that makes 50000 would allow the CEO to make 1.25 to 2.5 million.
I would also extend this limit to contractors and the employees of subcontractors to prevent complete out sourcing. One of the big problems we have is the straight up abuse and greed of management and stockholders getting excessively rich off of the backs of the poor.
Upping the minimum wage does not fix the problem it just it just makes things worse because it drives costs up directly.
Uhm. Why not? If the government hadn't been around, what would have prevented them from doing the exact same thing? And lets not forget that if the government hadn't been around, they never would have been stopped at all. You'd be an indentured servant of theirs living in a Carnegie town, working a Carnegie job, your kids going to Carnegie school so they could grow up to be good little workers for Carnegie.
but yeah, sure, the Government ENABLED them. :/
That's a good post, spot on and insightful. Thanks.
It's China. He's probably worried about how much Lead is in that watermelon....
The US and everywhere else on the plent should absolutely adopt a "maximum wage" of 100:1 or closer, but the US won't due to their fiscal libertarian tendencies and/or wealth worship.
I think that they will be pressured to do so eventually though. Countries that adopt such laws will become wildly successful, for every selfish successful sociopath who packs up their wealth and leaves, there will be many more successful businessmen who stay and are propelled to levels of success never seen before. Simmering social unrest will dissipate and the country will become a better place to live with greater upward mobility. The US will probably be the last holdout, a hellhole of massive inequality among developed countries. At that point they'll join the rest of the world in short order, one way or another.
Maximum wage and mincome are the two most powerful ideas to buy us some time with capitalism and allow a bloodless transition to something better.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Seriously. Companies would be flattened out and become wholly owned subsidiaries of offshore conglomerates. The head of the US subsidiary would be paid 12x the janitor's wages*. But the overseas corporate HQ would be made up of the highly paid management types. And even applying the 12 times rule to them and then their US subsidiaries, this would still result in a 144:1 ratio between the top and bottom of the enterprise in its entirety.
*Of course, this ignores the secondary effect of companies pushing their low wage tasks out to subcontractors.
Have gnu, will travel.
Democracy starts to unravel when people with no skin in the game can vote. I know this sounds odd, but a person earning welfare from the public dole will always vote for more welfare. Democracy is two wolves and a lamb discussing what's for dinner. Also, democracy only works when you have an educated (or interested??) populace.
Is Yes!
"The problem with socialism is that you eventually run out of other people's money." - Margaret Thatcher.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
Create a new "Employee rental company" with separate management whose sole purpose in life is to manage all the low-wage employees. For example: "McDonalds Employee Rental company." or "McDonalds Outsourced Customer service and Kitchen Operatins Inc."
If I were the sole manager left who got shuttled off to run the McDonalds Employee Rental Co. (MERC?), I'd find myself pretty unhappy to be the one Executive that had to live with the new wage cap. Time to subcontract to a new McDonalds Employee Rental Rental Company.
Turtles all the way down!
This is patent nonsense, once you understand that a "mutually beneficial contract" is a fiction that already needs intervention to enforce. Contracts are pieces of paper with no value. They only have meaning and value because some government intervenes by deploying police with guns, and books with laws written in them, to prevent two parties from treating contracts as meaningless, which is what they naturally are in the absence of said enforcement.
There's no moral difference between a government that enforces contracts, and one that enforces a pay scale ratio, or any of a miriad other things.
Their thought process to receive such high pay is that somehow they are special and provide high value that they are worth it. Meanwhile, the staff who are tasked with executing the CEO's vision are not receiving such rewards. If the CEO is that good and according to intolerant Republicans that that a rising tide raises all boats, then shouldn't their staff's lot in life also be better? Shouldn't the staff's pay also show the fruits of a successful strategy which they had a part in? Without a successful execution a winning vision is meaningless. So if companies want to pay millions to a CEO because "he is worth it", then they should raise the staff pay. This keeps the pay ratio in line, and more indicative if the CEO's real value.
Quit playing Monopoly with Bill.
Linux - of the people, by the people, and for the people.
but its just not enough :) ... my captcha is "regulate". which is an old warren g song (more my era)
If you've ever worked for the government, you'll realise why socialism is very dangerous idea in the real world.
The thinking that the means of production is better off controlled by the state rather than its citizens is naive to say the least. A young persons idealistic outlook perhaps who is yet to be turned cynical by the reality of...well, reality.
Conservatives hate this because they want to be able to complain about how unfair "taxes" -- which they are if they tax economic activities -- while receiving, for free, the primary service of government.
Liberals hate this because it starts to treat government as a service business and unleashes true paleo-libertarian economics such as that promoted by Henry George and Martin Luther King Jr in his last book (the one that got him assassinated) "Where Do We Go From Here?" because what the paleo-libertarians (and Dr. King) recommend is to treat citizens as owners of the business that maintains the infrastructure of property rights by paying out citizens dividends rather than attempting to deliver social goods through bureaucratic management. Liberals serve the bureaucratic management class -- not the people -- so they oppose this even though their "saint" MLK supports it.
BTW: I find it somewhat interesting, although not too surprising, that /. isn't talking about the Swiss referendum on the unconditional basic income -- which is essentially the citizen's dividend.
Seastead this.
Do this but first, eliminate the minimum wage. Then start with universities, medical professionals, lawyers, and civil employees, making the ratio adjusted by some index, so that it can increase as the economy becomes robust and contract as the economy weakens. Let that percolate a few years and see how it goes.
You should sell those things and buy gold. I hear it's going up to $10,000 per ounce.
You can't spell "oneiromancy" without "roman".
I hate to break it to you, but payments in stock really don't work either.
Most such payments are structured so that they get their stock options based on some performance measure. The problem is that the performance measure is continually tweaked so eventually they get their options. They either select different thresholds due to "economic" problems or adjust the mix of companies they compare themselves to so they look better. Unless you force the companies named officers to hold the stock they are paid in for a long time, there is a built in failure mode as they can just sell their stock. And, whether we like it or not, disallowing people to spend their paycheck as they see fit and when they want to - even if it is obscenely large - is just wrong.
I'd much prefer them to get paid only in dollars - no benefits of any sort that every employee in the company isn't also entitled to, no stock options, nothing except pure hard cash. Then apply the ratios. Let the employees see just how bad it is.
If you really want to change things, then start buying company stock directly and vote the proxies you get. Don't invest in mutual funds. Almost all of company proxies have approval options for the stock incentive plans and pay of named executives now. If there is a problem with how a particular company is run, vote against the plans, the pay, and any director who seems to be a problem. Until enough individual investors start picking their own stocks again, it is an uphill battle, but there are votes you can make as a stock investor that are sometimes enough to get noticed and get things changed at companies.
This.
There's already all kinds of incentives for companies to outsource the lowest end of the employment scale. A law like this would make it standard practice.
CEO's and executives are going to get their high-end pay. If they don't, some other company that's willing to pay more will get the good talent. Plain old competition. (You can dislike it all you want- that's what's going to happen.) The only way to keep the high-end pay is to get rid of the lowest level of the org chart. It's easy, and it's been done. A lot.
If you thought outsourcing make it hard to get a first job out of college, just wait until this kicks in. You'll have to work overseas just to get enough experience to qualify for the new "entry level" job here.
Dumb idea. Really, really dumb.
Will the NFL have to cap the highest earning player's salary to 12x the average fan's salary?
The comments I see on this are truly disgusting. Most people here I think would object to the government coming into their place of business and deciding on what their employer could or could not pay them. Let people freely and voluntarily exchange what compensation they want for what services they want. It is not and should not be the job of the government to decide "fairness." and the collateral damage when they do is subtle and far-reaching.
There's an interesting dichotomy that pervades this topic and the US in general. Christianity.
Most Americans ascribe to it so I'm told.
The basis of Christianity is to do right by your fellow human. To reject greed. To reject avarice. To be humble. To give away everything you don't need.
How the fuck does a Christian based nation allow a CEO to make enough money each year to buy a jumbo jet while the employees doing the actual work that earns the company the actual profits can't make basic ends meet on their salary?
How to the religious right... the conservatives... argue that capitalism (every man for himself, grab what you can) is an appropriate system when they state they believe the exact opposite?
Article X: The powers not delegated... by the Constitution...are reserved...to the people
Economic conservatives aren't generally complaining about "unfair taxes"; "fairness" is a principle progressives and socialists cling to, and when conservatives talk about it, it is only in response to progressive political arguments. Economic conservatives are concerned with wealth and creating wealth for everybody.
Furthermore, economic conservatives do not want to receive government services "for free", they want government to provide fewer "services" and therefore pay less for it. Economic conservatives are perfectly happy to pay for defense and limited infrastructure. What they object to is using taxes to pay rent seekers: bailouts, subsidies, handouts, bad services, and welfare.
If the US did this, I suspect companies would be small, and run other companies. For example: Company A would be made up of workers, direct supervisors and maybe another level of supervisors above them, keeping the bottom workers and top of this company in the 'Maximum Wage' Ratio. This company would be managed by Company B, who takes reports and consults, giving direction to Company A, providing professional resources like IT, Logistics, etc. Like Company A, Company B would have several layers, but all within the 'Maximum Wage' Ratio. However, entry level people in Company B are paid more than Top-Tier Supervisors in Company A. Two different companies, interlocking boards of directorate, but each company meets the 'Maximum Wage' Ratio.
That brings us to Company C. This company provides oversight, management and strategic planning for Company B, (which in turn gives guidance and direction to Company A.) Now, like Company B, the entry level workers for Company C make more than the top-tier supervisors in Company B. Company C is made up of what would have been the CEO, Senior VP and other VP's if Company A, B, & C were still all one big organization. but in order to not change pay rates, it simply re-organized into 3 different companies with interlocking boards of directorate, and each within the 'Maximum Wage' Ratio.
Don't get me wrong, I like the theory behind the idea. But, I'm fairly certain that US companies would come up with a way to circumvent the letter of the law and tromp all over the spirit of along the way.
Awk! Pieces of eight. Pieces of eight. Pieces of seven... ERROR: General Protection Fault. [Paroty Error.]
Those taking the capital gains income are the ones taking the 8 out of 12 cookies. Arguing about wage is simply arguing about how to fairly share the remaining 4 cookies. That misdirection is the whole reason a CONSERVATIVE think tank started talking about WAGE. They are trying to deceive us by framing the debate yet again. Capital gains must be taxed the same as ordinary income (wages). There is no other option.
You'll make that happen in the US easy... right after every non-flying animal starts flying not in the Sky but into Space.
It should include the lowest wage in outsourced companies (or any other add hoc associated company used in any way to hide the wage differential between low and top rank)
Because trolls and mental defectives don't deserve civility. As the nuance of it escapes them.
Chas - The one, the only.
THANK GOD!!!
You know Ballmer was recently let go from MS, right? He had to leave because MS was not making as much money under him as under BillG. That's what huge responsibility is all about -- you have to be capable of delivering and have to deliver results. Not everyone is cut out for this job, that's why it pays big. This communistic garbage of 1:12 ratio is purely retarded. People should be paid what their work is worth, nothing more, nothing less.
Fuck off and die, Miss Manners.
Watch this Heartland Institute video
I would be happy to see the ceiling even set at 50 fold (lowest earner in the company).
Having said that, one worry I have is that one possible outcome is that the CEO outsources, say, the low paid cleaning staff and can therefore raise his/her salary. Next step, replace all assembly line workers with robots (yes, I know, already happening, but this might accelerate the process).
How would you prevent this?
Under this sort of rule, Tom Cruise doesn't get $20M per flick, Tom Brady doesn't make $20M/year, and Oprah is not rtaking in close to $100M every year.
No
That is, there are far more small companies that are run by their founders as CEO than there are GEs or Microsofts being run by some "overpaid" come-lately executive. A lot of those CEOs pay all their employees first, then live with what's left, which might be less than zero in a bad year. And what about the NFL player's union allowing top QBs to make 20+ times what the rookie reserve long snapper makes? Or the rookie reserve snapper making 20+ times more than the janitor who cleans the end zone toilets? If we capped pay for all sorts of people at about $250K (10x poverty wage), we'd have to get $1B in tax revenue from everyone else. Remember that people in the top 10% pay 70% of all the tax revenues--that's people making more than $250K.
... of the Aerosmith plan; eat the rich.
In the US Drucker's 20/1 would still be radical. 40/1 might sound reasonable after Drucker's opening bid. Even if we set it to a 1m/1 ratio, we'll have someone whine about socialism. But, the complaint won't have much traction at that end of the spectrum. Somewhere in between there is a range that's close to optimal, and I think it reasonable for society to negotiate what that range is and even codify it. A hard ratio, seems like a poor way to go about it.
With the actual projections it look like 65% of Swiss citizens voted against this initiative. This initiative will not be added at the constitution. I voted yes, to set a signal. Call me a socialist if you like, but I life in a democracy. The main target, to speak about high salary's in wide public, was reached from the initiators from this political effort. I suggest you start speaking about democracy.
God, I swear hating liberals is easy, you never have to have a legitimate complaint, you just come up with a random strawman and believe it proves your point.
They overwhelmingly rejected it.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
Socialist Feel Good reaction. If the proponents of this are serious and consistent, then they should also cap salaries of Rock Stars, Community Organizers (like Michele Obama's US$330,000 salary for not showing up to work at a hospital), Sport heroes, Actors, Producers, Hedge Fund managers (What! No Soros? Who will fund MoveON?), Union bosses, Al Gore's Trust (from Occidental Petroleum holdings) and on and on. Or, do you JUST want to cap CEOs?
Every executive should realize, if this happens, the cost of luxury will downfall to meet demand. Therefore, luxury will be more affordable and standard of living will skyrocket. So of course will stocks, because high margins will then linger within company withholding instead of the CEO's billion dollar portfolio, also helping stabilize outstanding companies.
Executives will then be pushed to invest further to seek higher returns, and help bring larger funding/volume to traded companies.
People can consider whatever they want, but they should perhaps consider that Swiss voters just decided not to do this by a 2:1 ratio.
http://online.wsj.com/news/articles/SB10001424052702304011304579217863967104606?mod=WSJ_hp_LEFTWhatsNewsCollection
A free market society sets no limit.
I am not a CEO but this is bullshit.
The so-called free market is doing a terrible job ensuring that workers are paid equitably for the fruits of their labor. I find it ironic that the same class that abhors socialism are eager to destroy the economy on which it depends. Poverty creates no demand. Regulating commerce is one of the things government is actually supposed to do, but since government has been infiltrated by business, the brakes are off for good.
if they hire the better advocates, it will be more likely that they hive of the entire senior management team. everyone else is a different company
If we can have most of a country being forced to purchase a produce, and pay minimum wages, it is a short slippery step to have maximum wages, and the next step is maximum rate of return for investments.
Many 'smart' corporate officers, make a lot of cash, but they also get a lot of 'deferred' income, and payment in 'non-cash' amounts (perks and things like stock options or 'loans' that don't accrue interest ... all things known as 'golden handcuffs').
People like Warren Buffet make 'little' money on salaries/wages, but most of the 'value' they get from employment is (at this time in life) a feeling of service, and abilities to fund their philanthropic efforts. But there are LOTS of 'rich' non-billionaires that are not as philanthropic minded, not that most aren't 'good people', but from what I can tell, most people don't like to be forced to support oppressive systems.
I wonder if Swiss would like to 'economically partner' with some other country, say, Kenya, and allply their social laws there?
Personally I think max and min wage requirements are bad. And max wage earners will find other methods to circumvent this wages either directly or indirectly.
Hell YES!!!
YES. Executive Pay Should Be Capped as a direct relation to wages
of the workers.
The common model of corporation is a chartered legal structure of
society that provides a mechanism where greed driven private
interests are allowed to profiteer by exploiting the commonwealth
public resources (aka: every resource on the planet, including labor)
with the underlying intention and obligation of serving the greater
good and economic prosperity of humanity as a whole. As such,
to be a healthy and constructive structure instead of an all consuming
cancer of sociopaths whose greed destroys civil society, corporations
must be subject to any and all taxation and regulation that limits the
destructive pressures of elitist greed and directs them to serve their
wider obligation to do good.
Of course, this whole hierarchical capitalist corporate model
(a structure identical to any fascist totalitarian dictatorship like
communist China) is doomed to systemic failure beyond the
scale of the township or village. Once this brand of corporation
is removed from localized accountability they (the executives
and board directors) will seek to corrupt and undermine the
systems of regulation and aggressively evade legitimate
payment of taxation for the global resources they exploit.
Until we transform the common corporate model into the
more egalitarian and less hierarchical structure of a social
democracy, a structure where the workers have the primary
influence over the decisions of the corporate entity, then
the avarice and greedy maggot mentality exemplified by
the executive corporapist sociopath elites will guarantee
that corporations devolve to a fascist cancer that will
collapse of the entire economic ecosystem, just as we see
happening at increasingly devastating and rapidly accelerating
scales around the world today in direct correlation to the
levels of corporate globalization.
in peace
aaron
So you make it a percentage of growth over a minimum of NN years, maybe an increasing percentage over time. Of course that isn't entirely wonderful either, in that it would encourage growth at the expense of stability, a problem we already have with being beholden to stockholders as the #1 priority. So... say the CEO pay is delayed for an equal number of years after they leave the company, so stability is necessary if you expect to get paid.
Just throwing out wildassed notions; feel free to throw them back.
~REZ~ #43301. Who'd fake being me anyway?
The difference between rich and poor salaries is intelligence and life experience based.
Half the students in any class will be in the bottom 50% of grades. There is nothing
communism and/or socialism can do about this than to steal from the smart and give
to the poor - to their detriment. Communism and socialism only work to make people
the same - poor and lethargic; because some bearded, wire-rim glasses wearing
faggot is constantly playing God (something they don't believe in, but desperately want to be)
with everyone else)
Stockholders own the company and the CEO is their employee. The stockholders are also the
same people who pay money to watch major league sports (e.g. MLB and NFL). It is the responsibility of the
stockholders to rein in the pay/performance ratio for the CEO, not government! Since you don't
see the "Football Coliseums" empty, you can expect stockholders to continue to treat their
"CEO champions" in the same manner.
Micro fixes to macro problems always creates more problems that it fixes. Companies will find ways to compensate CEOs that skirt the laws.
Overall social inequality is the macro economic problem that must be fixed, not just CEO salaries.
The correct way to address overall inequality, is with the other approach the Swiss will soon be voting on, which is a Basic Income for all citizens. That is the correct macro solution to the macro problem of inequality. That will fix CEO income relative to the average worker income, as well as all other forms of inequality, The US needs this far more than the Swiss do. Our inequality is far higher, and the social problems created by inequality are far worse in the US.
There's a petition at whitehouse.gov in need of more signatures to bring this problem to the atention of the American People. Please check it out and consider signing it.
Petition: Establish a basic income guarantee for all Americans, similar to what is being proposed in Switzerland.
"Oh help them! We should make a rule!"
This idea is based on the mistaken notion that someone from afar can make a rule that works in all cases. Then, when the rule is followed, exceptions are found. So another rule has to be added, and another, and another, and soon you have bureaucracy. Everyone is reduced to a common life so they fit better within the limited rules. No one has any freedom, and no one dares to think or act differently. See where altruism takes you?
"'What we've got is basically an arms race,' Stout says, 'where the CEOs are competing on pay because they each want to have higher status than the others.'"
In other words, CEO's are interested in claiming bragging rights for *receving* the most money, not so much in *accumulating* the most. So let's start a new arms race where they compete for who gives back the most - to education, infrastructure, services, to increasing wages of low-wage working poor. They then win all over again because when people at the bottom get a boost in their standard of living, they spend more and corporate profits increase.
What is your "correct" tax rate?
in my original comment, I explained it...
progressive income tax is **as american as Apple pie**
the income tax brackets and rates were sharply progressive
Thank you Dave Raggett
seriously?
progressive 'rich people' including many members on Congress vote for laws that raise taxes whenever possible and suggest raising them whenever it makes sense
many, many 'rich' people support policies that would raise their own taxes....Stephen Colbert jokes about it all the time while satirizing WASP culture
they vote for the policies...not just rhetoric!...when GOP obstructionists & their high finance overlords let it happen
Thank you Dave Raggett
The socialist policies enacted for this depression haven't worked, so let's try implementing more of them.
While I fully agree that CEO compensation is out of control this will just result in either creative packages or CEOs will become employees of some shell company based in another country and the shell will also own it's former US base self. Years ago when congress declared all income of US corps taxable regardless of where it was earned any US firms becameBermuda based.
The problem with that is people who only want to work part time are forced to work full time. Alternatively they make everyone overtime workers.
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First, I still find it amusing that people essentially equate communism and socialism. While there are similarities there are more than a few key differences...but I digress from the topic at hand. First and foremost, there is no need whatsoever for CEO's to make the money they do. It's ridiculous, especially considering that they make bonuses on top of their already exorbitant salaries...sometimes even when a company is failing, as we've seen in recent years. Secondly, as much as I like the intent of the law in question, it won't work...as many others have pointed out, the CEO's will find ways around it. In order to make something like this work, every single country in the world would need to be onboard, and it would require a complete revamp of laws regarding economic policy. Laws are never black and white, those that write them either leave the in shades of grey (loopholes), or lawyers find ways of adding loopholes. The unfortunate part of all of this is that we could have probably stopped this excessive executive acquisition of wealth decades ago, but unfortunately we didn't have information and communication technology like we do today (see: Internet). Now, barring armed revolution, it may be too late because big business is imbedded into the law books and governments like a disease-bearing tick. They've had a lot of time to gain influence and shape legislation right under our noses. Ahhh well. So, to answer the question posed more directly: yes , on the condition it could be made to work...otherwise, pointless.
What we really need is guaranteed minimum income of $20,000 to all citizens above the age of 26 without a job. That way people will be able to protest the decisions of upper management without fearing for their livelihood.
https://www.change.org/en-IN/petitions/obama-administration-put-a-cap-on-market-capitalization-of-listed-companies
Casteism
Intelligence? Talent? No, the ultra-rich got to where they are through luck and brutality. http://www.monbiot.com/2011/11/07/the-self-attribution-fallacy/
Casteism
Unlike Capitalism, Globalization is zero-sum. Globalization will destroy your middle class due to wage slavery in 3rd world.
Casteism
Don't get too excited... the people voted massively "no".
Therefore, this law will not be adopted.
Uh, No! This is not a matter of state. End of story.
Most such payments are structured so that they get their stock options based on some performance measure.
Bah, I remember big corporations utilizing TARP money to pay CONTRACTED executive bonuses even though they bankrupted the company hence requiring the bailout money.
The CEO takes way more than 12 times the risk of the minimum wage employee. I work at a fortune 500 company (one of the Forbes "best" to work for) and I wouldn't want a $96/hour employee at the helm. (that's assuming we employe minimum wage workers at ~$8/hour). Let me ask you this, was Steve Jobs worth more than $96/hour? Look at where Apple was before and after his return and I'd say yes.
This law won't increase the lowest paid worker, it will (as others noted) increase outsourcing, loophole finding, or (worst case) promotion of incompetent people into positions of influence.
"Happy families are all alike; every unhappy family is unhappy in its own way." -- Anna Karenina by Leo Tolstoy
I'm glad you posted this, but I'm disappointed that the first truly meaty comment on the thread is nested 10-comments deep and labeled "Ludicrous Douche". Oh, slashdot.
Is there a single advantage to this plan over just modifying the income tax scale?
It seems that the more complicated you make the system, the more you ensure that only those with the resources to figure out how to game it will win. This will just lead to increasingly complex ownership structures, with shell corporations who own shell corporations. All of that inefficiency is not going to benefit the common worker, though might be good for corporate attorneys and tax professionals.
How about we just say "90% marginal tax rate for all income over $2M" instead?
Any scheme like this is bound to have unintended consequences up the wazoo. There is a reason centrally planned / price-controlled economies fail.
I think frankly that nobody cares about that extra $1B in tax revenue. It's noise.
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please post the docs describing your Asperger's diagnosis or FOAD knowing you're just an unpleasant jerk.
Well, that's just, like, your opinion, man...
https://petitions.whitehouse.gov/petition/establish-basic-income-guarantee-all-americans-similar-what-being-proposed-switzerland/jFbgDZ4h
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
You know Ballmer was recently let go from MS, right? He had to leave because...
He had to leave with a fat paycheck and financial freedom to do whatever he pleases, pursue whatever new things he wants. For "ordinary people", that's not taking responsibility, that's reaping a fat reward for a crappy job.
and shares profits equally.
http://www.theglobeandmail.com/news/national/time-to-lead/how-one-company-levels-the-pay-slope-of-executives-and-workers/article15472738/
I never regret spending money w/ them, and the consideration for their workers shows in their customer service which is top-notch.
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How would this affect Hollywood or professional athletes? CEOs may make 400 times the lowest paid worker in America, but movie stars (not just the A listers) and athletes make an absurd amount more than any other career field. For instance, an Air Force 4 start general with over 40 years of service makes annually .8% of what some actors (Robert Downey Jr.) do.
Of course, since I am also the sole owner and employee of a small business which acts as a supplier to the company which I am CEO of, and I have approved over $2,000,000 in annual retainer fees being paid to it, I am quite happy to accept a drop of my salary to $1 a year.
It shows how much I truly care about the lowest paid employee in this company.
1. Most stocks are held by other corporations 2. When stocks are held by individual investors they are very much unlikely to be your rank and file employee looking for a fairer economic situation Perhaps some sort of regulation on percentages of whom the stockholders are would make sense. Some from local community, some from employees (all ranks), some from whereever the supplies are sourced or manufactured (encourages CSR) That way if rank and filers want to change exec wages they actually can.
i think you have insightful points, but they could receive more attention if they were phrased in a more neutral manner.
This could be a job for Bitcoin!
Free market is about the freedom on customers to have educated, informed, transparent choice in what they are buying, NOT the freedom of corporations or organizations to do whatever they want at the expense of the consumer / citizen.
Yep.
In this case, all lower paid employees will be outsourced to a contracting company that may or may not be a fully owned subsidiary of the original employer.
Make the "Maximum Wage" $20,000 a year, with 100% tax rate on any earnings above and beyond that. If I can live on it, and support a family of 3, you can too. Just because you work more doesn't mean you deserve more money.
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ASSUMING that an employee makes ($10 - I'm being REALLY GENEROUS)... and works all _52_ weeks. That's ROUGHLY 20,800/year GROSS. Multiply that by 12, and you come up with 249,600.
HOW MANY CEOs do you think are gonna settle for $250k/year. Most likely _NONE_! And even if they DOUBLED the poor bastards wages at the bottom... they themselves would still only get $500k/year.
This would fly like a lead balloon.
It would be NICE... but it ain't gonna happen.
This is blatant communism, as outlined in C.Felber's book "Die Gemeinwohl Ökonomie" (the common-good economy).
I agree, it seems astronomical how much top CEO's make, but it is not up to any government to cap them. This is the tool of the communists. The next favorite tool is a progressive tax -- "the more you make the more they take".
Welcome to the Fabian Society!
Implementing communism 1 step at a time.
Of course they will not call it communism, you can't sell communism in the west, so you repackage it legislate it.
This tactic should be see through for most people, unfortunately communism is coming back in trend.
The problem with that is that it is also based on greed and hate, hate of the other classes.
Not long ago, in 1933 it was the rich evil Jews who were the "problem". Now they stop short and just say "the 1 percent" or "the rich" or "the bankers and CEO's".
This is a scheiss nazi mentality. You should be ashamed of yourselves.