×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Should the US Copy Switzerland and Consider a 'Maximum Wage' Ratio?

Unknown Lamer posted about 5 months ago | from the survival-of-the-least-competent dept.

Businesses 1216

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.'"

cancel ×
This is a preview of your comment

No Comment Title Entered

Anonymous Coward 1 minute ago

No Comment Entered

1216 comments

Yes. (5, Funny)

Anonymous Coward | about 5 months ago | (#45501457)

But it will never happen. Because (looks up the current thing we're supposed to hate) because socialisim!

Re:Yes. (5, Insightful)

Joining Yet Again (2992179) | about 5 months ago | (#45501535)

Socialism is, of course, worker control of the means of production, which is orthogonal to government regulation of pay.

Now the owning classes have learnt that it'll get you richer to milk the fat cows of UK and the USA until they countries have run dry, by which time they can retire somewhere off the Caribbean coast. Is it society's job to curtail this behaviour? Sure, why not. The free market is supposed to be a tool, not a ruler - if it won't do its job, we rework it.

Re:Yes. (5, Insightful)

polar red (215081) | about 5 months ago | (#45501549)

. The free market

does NOT exist.

Re:Yes. (4, Insightful)

Bing Tsher E (943915) | about 5 months ago | (#45501753)

Right. No extreme degree of anything exists. They are simply tendencies.

Now, the long lines in more socialistic economies to buy anything at all not locally produced- they do exist. Try buying a large screen TV in Venezuela this coming January. You might be able to, if you're a member of the right Party. . .

Better red and dead.

Re:Yes. (5, Insightful)

ShanghaiBill (739463) | about 5 months ago | (#45501773)

. The free market

does NOT exist.

Absolute zero Kelvin doesn't exist either. That doesn't mean that Minnesota isn't colder than Florida.

It is idiotic to claim that there is no difference between free markets and socialism because there are no mathematically perfect markets with infinite sellers, infinite buyers, and zero barriers to entry. There are plenty of markets that are free enough that the advantages (and disadvantages) of free markets are clear.

Re:Yes. (1)

fredprado (2569351) | about 5 months ago | (#45501571)

if it won't do its job, we rework it

And fail miserably while trying to do so...

Re:Yes. (0)

Joining Yet Again (2992179) | about 5 months ago | (#45501637)

All the countries wedded to ideals right now, from the US to Venezuela, are failing.

All the countries focussed on finding practical routes to achievable goals rather than ideologies are doing rather well.

China laughs at you.

Re:Yes. (1, Funny)

Anonymous Coward | about 5 months ago | (#45501731)

On the contrary, Venezuela is doing quite well. They have cut their violent crime by several orders of magnitude by doing something the US doesn't have the balls to do -- a wholesale ban on civilian ownership of guns. Ban a gun, save a life.

Re:Yes. (0)

fredprado (2569351) | about 5 months ago | (#45501741)

Of all countries US is one of the last in the failing list. Venezuela, Bolivia, Cuba and most of socialist Latin America, on the other hand are in utter misery. Social Democrat countries in Latin America and Europe, as France, Spain, Portugal, Brazil and Argentina are not that bad but waaay worse than US.

China is indeed doing fine (compared to what it has been during its communist phase), but it is probably one of the countries who is most practicing free market in the world currently.

So, you see the farther you go from Free Market the poorer the economy of a given country does. You can analyze any country throughout its history.

Re:Yes. (0)

Anonymous Coward | about 5 months ago | (#45501647)

"The free market is supposed to be a tool, not a ruler - if it won't do its job, we rework it.
Reply to This Parent Share"

Free Market is neither a tool or a ruler; it's an observed phenomenon. Reworking it makes it a non-free market.

Re:Yes. (2)

Joining Yet Again (2992179) | about 5 months ago | (#45501671)

I stopped taking you seriously when you capitalised Free Market in the style of God, but srsly, dude, it's just an economic ideal, which can be used as a basis or influence for any practical economy, but cannot be applied directly to any practical ecnomoy.

Re:Yes. (0)

Anonymous Coward | about 5 months ago | (#45501695)

And where, exactly, has a truly "free" market ever been observed?

Re:Yes. (4, Insightful)

mlts (1038732) | about 5 months ago | (#45501817)

The closest was the Eastern US in the late 1800s, post Civil War, where government was a completely laissez faire entity.

This resulted in a few people (Carnegie and Frick for example) being quite wealthy, while most Americans were duking it out among floods of immigrants for menial work, companies owned their own towns (and being fired meant getting kicked out of one's community), and one was expected to work seven days a week, or else replaced by someone who would at a lower pay rate.

Stock Options (1)

bondsbw (888959) | about 5 months ago | (#45501567)

If the government adds a regulation, somebody will find a way around it.

Re:Stock Options (2)

fredprado (2569351) | about 5 months ago | (#45501675)

Exactly. It is simply unenforceable. It is just populist bullshit, in exactly the same way as raising taxes on corporations which end being 100% transferred to consumers. Corporations have way too many ways to work around regulations, and even to buy and warp them to strengthen their positions and block competition many times.

It is past time for people to start realizing that the government is not a solution against corporation abuse and will never be.

Re:Stock Options (3, Insightful)

sjames (1099) | about 5 months ago | (#45501721)

If the government can't curb them, that just leaves angry mobs killing their leaders and burning their headquarters down. Not regulating them is not an acceptable answer.

Re:Stock Options (4, Insightful)

runeghost (2509522) | about 5 months ago | (#45501801)

I see the control fraud apologist brigade is right on top of this one. Corporations were successfully regulated in the US for decades, a period which coincided with a massive rise in the American standard of living.

No (-1, Flamebait)

Anonymous Coward | about 5 months ago | (#45501587)

Because what a company pays its chief executive is no one's business but the shareholders.

Re:No (0)

Anonymous Coward | about 5 months ago | (#45501657)

So you would defend with a law proposal that would increase the shareholders say in what they pay to the chief executive?

Re:No (1)

Barsteward (969998) | about 5 months ago | (#45501755)

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.

Re:Yes. (1)

ToasterTester (95180) | about 5 months ago | (#45501619)

I thought I heard Japan has something like this in place???

  Sure need it, if a Executive wants more money then help the company do better so whole companies slice grows.

Sounds good on paper (2, Insightful)

postbigbang (761081) | about 5 months ago | (#45501459)

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.

Re:Sounds good on paper (5, Informative)

Joce640k (829181) | about 5 months ago | (#45501513)

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.

"it's not going to work in the US because citizens won't ever get to vote on anything like that."

FTFY.

People will still be able to make "gobs of wealth" in Switzerland, it's just that the people lower down the chain have to make money, not just the CEO.

Re:Sounds good on paper (1)

Anonymous Coward | about 5 months ago | (#45501521)

It would work just fine in the US for everyone but something like 7% of the population, which is just fucking fine.

Re:Sounds good on paper (1)

AlphaWolf_HK (692722) | about 5 months ago | (#45501593)

Executives are paid high salaries because (good ones at least) are sought after. Companies have to be able to offer incentives to attract talent, and you can't just set laws saying what incentives they aren't allowed to offer.

You know what happened in America last time we tried to set wage caps? The health care industry became permanently entangled into employer benefits.

Anyways, slashdot seems to have a very short memory, because only a month ago there was an ask slashdot talking about how it is hard to afford certain luxury goods in Australia that even low income people can easily obtain in the USA, so Aussies resort to looking for package redirection services in America.

http://slashdot.org/story/13/10/31/2153223/ask-slashdot-package-redirection-service-for-shipping-to-australia [slashdot.org]

The cause of this is actually Australia's ridiculously high minimum wage of $15 an hour. You can't sell common goods at low prices if you have to pay up the ass to have them distributed. Poor people tend to have the hardest time affording common goods, whereas the very rich don't have any problem at all affording them. If you make them more expensive, all that does is reduce the purchasing power of the poor.

Re:Sounds good on paper (1)

darronb (217897) | about 5 months ago | (#45501669)

So you're saying that paying someone a higher minimum wage makes them poorer... hmmm....

Yes, no hmm (1)

SuperKendall (25149) | about 5 months ago | (#45501793)

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.

Re:Sounds good on paper (2)

Areyoukiddingme (1289470) | about 5 months ago | (#45501683)

The cause of this is actually Australia's ridiculously high minimum wage of $15 an hour.

Oh bullshit. No it's not. The cause of it is price gouging and rampant profiteering. It doesn't cost one red cent more to send a container ship full of widgets from Singapore or any of a dozen Chinese ports to Australia than it does to send it to Seattle, San Francisco, or LA. Australia's high prices for plastic crap have nothing to do with their minimum wage and everything to do with logistics and the US's Most Favored Nation status with China.

Re:Sounds good on paper (5, Interesting)

sjames (1099) | about 5 months ago | (#45501797)

Not really. They make big bux because they sit on each other's boards and quid pro quo their way to stratospheric pay.

The talent argument is a non-starter. Even CEOs that crash the company against the rocks and then abandon ship seem to find a new even higher paying position before their seat is even cold. Surely that sort of 'talent' isn't in demand.

Your whole Australia thing doesn't follow logically at all since that article is about American companies over-charging Australians.

Re:Sounds good on paper (4, Insightful)

TheRaven64 (641858) | about 5 months ago | (#45501831)

Executives are paid high salaries because (good ones at least) are sought after

There are a very small number of truly exceptional C?Os and most of those know a single industry very well and do badly when translated to other markets. According to a study that was on Slashdot a couple of years ago, the vast majority make decisions that are no better for the company that a random selection. You can replace most Fortune 500 CEOs with a magic 8 ball and get about the same performance. That's not true of most of the other employees, including the janitors, so why are they paid several orders of magnitude more? Because most of the CEOs are on the boards of other companies and approve large salaries in exchange for the same favour being paid to them.

Re:Sounds good on paper (1)

Anonymous Coward | about 5 months ago | (#45501659)

It won't work here because a lot of CEOs already make relatively low salaries (relative to other CEOs anyways). There is a lot of "low"-income high-capital-gains shenanigans that goes on to dodge taxes, and it is all technically legal. The best kind of legal.

That, and the votes of the kind of people who would be affected by this are more important to your congressmen than the thousands of votes from people that would supposedly help.

How about we force the CEO's to justify their pay? (1)

Anonymous Coward | about 5 months ago | (#45501471)

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?

Re:How about we force the CEO's to justify their p (1, Insightful)

therealkevinkretz (1585825) | about 5 months ago | (#45501533)

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.

Re:How about we force the CEO's to justify their p (1)

Anonymous Coward | about 5 months ago | (#45501623)

How about making them answerable to the workers?

Re:How about we force the CEO's to justify their p (0)

Anonymous Coward | about 5 months ago | (#45501655)

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.

Re:How about we force the CEO's to justify their p (0)

Anonymous Coward | about 5 months ago | (#45501739)

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.

Re:How about we force the CEO's to justify their p (5, Interesting)

Joce640k (829181) | about 5 months ago | (#45501543)

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.

Re:How about we force the CEO's to justify their p (1)

hwstar (35834) | about 5 months ago | (#45501735)

Correct. Couple this with a requirement that all companies pay a living wage, and most of the problem would be solved.

Re:How about we force the CEO's to justify their p (1)

Barsteward (969998) | about 5 months ago | (#45501783)

"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.

Not "should", "could" (1)

noobermin (1950642) | about 5 months ago | (#45501807)

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?

Huh? (4, Insightful)

Anonymous Coward | about 5 months ago | (#45501483)

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.

Re:Huh? (2, Insightful)

Anonymous Coward | about 5 months ago | (#45501557)

Really?

When was the last time someone without money made it into the Presidency? Do you think your 100$ contribution to your favored candidate can match the 40,000$ contribution for some CEO with an agenda? I mean, surely congress don't run on bribes, and at the whim of who ever has the money? They're all just normal people without huge financial backing or funds, right?

Re:Huh? (5, Insightful)

Joce640k (829181) | about 5 months ago | (#45501585)

Bad education and information are what causes democracy to unravel. Not high pay.

Not always. There's been a lot of CEOs lately who:

a) Take a working company
b) Outsource it to India
c) Fire all the workers (they call it "downsizing")
d) Pay themselves a mega-bonus with all the money made in short-term cost savings
e) Set themselves up a monstrous pension plan based on "projected earnings" (which will suck all the profit out of the company for years to come)
f) Move to another company before it all comes crashing down in ruins

Links pelase???? (0)

SuperKendall (25149) | about 5 months ago | (#45501761)

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.

Re:Huh? (2)

Anonymous Coward | about 5 months ago | (#45501621)

http://www.ted.com/talks/lawrence_lessig_we_the_people_and_the_republic_we_must_reclaim.html

Re:Huh? (1)

mozumder (178398) | about 5 months ago | (#45501641)

I agree. The wage disparity is a symptom, not the cause.

The cause of all the problems is that poor people are discouraged from moving up the economic ladder because they have to worry about basic survival in the first place. Wealthy people don't have that problem to worry about - they have their parent's trust fund to live off or house to live in without worrying about rent, or they have well established network of connections to enable them to move up economically. Maybe they were able to pay for college and have a group of friends to approach for business investing, etc..

The proper solution would be a negative income tax or a guaranteed minimum income, which was also proposed in Switzerland, with government providing a level of basic services (health care, higher education, etc..) that allows poor people to afford pursuing higher economic endeavors and luxuries without worrying abut survival.

Socialism should be used for the necessities of life. Capitalism should be used for the luxuries of life.

Re:Huh? (0)

Anonymous Coward | about 5 months ago | (#45501717)

The voters are the ones who keep voting for status quo.

Yes, but it's more complex than that. Cornerstone of democracy is well informed public, which is, to say the least, not always so.

Re:Huh? (1)

Anonymous Coward | about 5 months ago | (#45501737)

Agreed when it comes to political issues, but we're talking about CEO pay? That's done by the boards of directors and unless you have quite a bit of shares, you have virtually no voice. I am constantly voting against CEO pay packages but it makes no difference - like GE's CEO - he does NOT deserve what he's getting.

How will our votes change that unless we're able to get a leftist (by US standards) candidate? That won't happen with our two party system and the way they select candidates.

An economist relative had this hypothesis on how the candidates are selected: the 0.01% make the selections for BOTH parties (after the primaries are done, either candidate will take care of the billionaire class; therefore they really don't care if it's Dem or Rep who wins.) Then, they pump up the media with distractions issues like: gay marriage, abortion, gun control, taxes, .... the typical bullshit that gets Jane and Joe Public all pissed off and fighting with their neighbor, and they keep their power (they being the 0.01%ers and their bitches in DC.)

Sounds far fetched? Every election for decades has gone that way.

You'll see in 2016. Will the NSA bullshit and other continuing erosion of our basic Constitutional Rights come up? Will our continually declining standard of living come up? Will anyone mention how the billionaires are getting richer at the Middle Classes expense?

Nope, Nope, nope.

We'll see crap about "job creators" even though the 0.01%ers have been getting richer and richer and yet, unemployment stays at 7.0%+ and the 99.9% standard of livings are declining. The Fed is printing all this money and things are getting more expensive and the stock market is hitting new highs. Sure a get a few more dollars in my retirement (after the excessive fees), but it in no way compensates for the higher cost of food and medical - let alone my student loans depressing me.

And then they'll exclaim "Look, taxes!" or "Abortion!" or "Gays getting married!" and John and Jane Q. Public will forget all about how they're being run into the ground - more hours, lower pay, more taxes "sacrifices", etc ... while the billionaires walk away with LOWER taxes or none at all in the form of breaks and subsidies for their investments.

Stopping.....

Re:Huh? (0)

Anonymous Coward | about 5 months ago | (#45501775)

Not high pay.

One USD has no inherent value (ah, shut up, gold-standard freaks...), so everything is relative. Very high pay for some means (relatively) much lower pay for others.

Re:Huh? (2)

maccodemonkey (1438585) | about 5 months ago | (#45501785)

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.

I'm not quite sure yet if I support what the article is talking about... but this one seems like an easy one to answer. Education isn't free. Those with money can get a better education. Those with little money get less or no education. It's all the same thing.

Re:Huh? (1)

taiwanjohn (103839) | about 5 months ago | (#45501805)

When your school system is dependent on LOCAL property taxes, a wage disparity can have a HUGE effect on democracy.

The voters are the ones who keep voting for status quo.

No, it's the Congress that keeps voting for the status quo, and they are handsomely paid by Wall Street lobbyists to do so. The voters are left wondering who or how they could vote in such a way as to make a difference, since the vaunted "two-party system" is so firmly entrenched... should I "waste" my vote on a 3rd-party candidate I actually believe in, or hope to actually "make a difference" by tipping the balance toward the lesser of two evils? With such a Hobson's choice, is it any wonder we rarely get above 55% participation in elections?

yeah right (-1)

Anonymous Coward | about 5 months ago | (#45501493)

who the fuck would want the responsibility of running a huge corporation for mice nuts?
shit, Cook made $64 million in ONE apple stock sale last year.
If he is not worth it, stockholders should take him out, and put in someone making $400k with no options, good luck with that.

Re:yeah right (1)

Anonymous Coward | about 5 months ago | (#45501537)

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.

Re:yeah right (0)

Anonymous Coward | about 5 months ago | (#45501803)

who the fuck would want the responsibility of running a huge corporation for mice nuts?

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?

Re:yeah right (1)

Barsteward (969998) | about 5 months ago | (#45501819)

shareholders are part of the problem, they are of the same mindset. The shareholders very rarely do the job they are supposed to.

No. (2)

pecosdave (536896) | about 5 months ago | (#45501499)

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.

Monstrously Stupid Idea (0)

Anonymous Coward | about 5 months ago | (#45501501)

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?

Re:Monstrously Stupid Idea (0)

Anonymous Coward | about 5 months ago | (#45501687)

It's not price fixing. If the CEO wants to earn more, the company needs to raise *ALL* the salaries it pays out. The CEO wants a 10% raise? Sure, no problem, but you'll make damn sure the cleaning lady also gets her 10%.

Lets count the loopholes... (5, Insightful)

Anonymous Coward | about 5 months ago | (#45501509)

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.

Am I wrong? (1)

Anonymous Coward | about 5 months ago | (#45501511)

Should we?
Yes.
Will we?
No.
Why?
Republicans.

Ratio (5, Insightful)

Anonymous Coward | about 5 months ago | (#45501517)

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.

Re:Ratio (1)

SuperKendall (25149) | about 5 months ago | (#45501825)

I know Americans don't want to hear this... but a large gap between rich and poor is BAD for society.

Because imposing limits has historically worked out so well...

As the revised saying goes, those who do not learn from history are doomed to make themselves look like idiots on the internet.

What about those paid "one dollar"? (0)

Anonymous Coward | about 5 months ago | (#45501519)

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 passing a law will affect them (1)

capedgirardeau (531367) | about 5 months ago | (#45501525)

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.

raise capital gains tax (3, Insightful)

sixsixtysix (1110135) | about 5 months ago | (#45501539)

Seeing that investing is just like gambling: tax the gains like lottery winnings.

Re:raise capital gains tax (0)

Anonymous Coward | about 5 months ago | (#45501605)

Seeing that investing is just like gambling: tax the gains like lottery winnings.

you're investing wrong.

No account for company size? (1)

calidoscope (312571) | about 5 months ago | (#45501541)

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.

Wait until all Janitorial is "contracted out". (5, Interesting)

Anonymous Coward | about 5 months ago | (#45501559)

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".

Re:Wait until all Janitorial is "contracted out". (1)

Anonymous Coward | about 5 months ago | (#45501719)

That's an easy fix, you take into account anyone contracted to the company as well. This could have its own set of problems just as anything else but it would hopefully stop the outsource everything idea. That or you base the percentage on amount of work outsourced. Outsource more than 10% of your workforce any the ratio drops to 15:1 from 20:1 and so on.

My employer uses Switzerland as a tax haven. (0)

Anonymous Coward | about 5 months ago | (#45501565)

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.

Where does the money go, then? (3, Interesting)

GlobalEcho (26240) | about 5 months ago | (#45501575)

"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.

Re:Where does the money go, then? (0)

Anonymous Coward | about 5 months ago | (#45501613)

> What we really need is to bring back serious inheritance taxes

How about starting with simple progressive taxes before diving immediately into "if you die your wealth goes to the state"?
I cannot even theorize how someone can imagine inheritance taxes would curb centralization of wealth.

US will become an Autocratic Plutocracy (1)

hwstar (35834) | about 5 months ago | (#45501579)

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.

Robots. (0)

Anonymous Coward | about 5 months ago | (#45501583)

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.

Take v Give (0)

Anonymous Coward | about 5 months ago | (#45501595)

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.

Thought experiments (5, Insightful)

PapayaSF (721268) | about 5 months ago | (#45501597)

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 [wikipedia.org] . This way lies madness, folks. As P.J. O'Rourke put it:

''The free market is not a creed or an ideology that political conservatives, libertarians, and Ayn Rand acolytes want Americans to take on faith. The free market is simply a measurement. The free market tells us what people are willing to pay for a given thing at a given moment. That's all the free market does. The free market is a bathroom scale. We may not like what we see when we step on the bathroom scale, but we can't pass a law making ourselves weigh 165. Liberals and leftists think we can."

Re:Thought experiments (0)

Anonymous Coward | about 5 months ago | (#45501781)

The Free Market is in the eye of the beholder, and in fact there is no such thing.

When it was forbidden for children to work in cotten factories, it was controversial - on free market principles, yet no one would argue for the return of child labour.
[Paraphrased from 23 things book]

- first review I find..
http://www.truth-out.org/news/item/1505:there-is-no-such-thing-as-a-free-market

It won`t ever work. (1)

fredprado (2569351) | about 5 months ago | (#45501599)

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.

Oh because there won't be any loopholes (0)

Anonymous Coward | about 5 months ago | (#45501609)

Yeah, sure, no deferred compensation, or undervalued stock options.

What "pay" are we talking about? (1)

It doesn't come easy (695416) | about 5 months ago | (#45501615)

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".

This limits corporations with unskilled labor (0)

Anonymous Coward | about 5 months ago | (#45501625)

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.

Stupid idea, free market should decide! (0)

magic maverick (2615475) | about 5 months ago | (#45501633)

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.

It will never happen the USA (0)

Anonymous Coward | about 5 months ago | (#45501643)

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.

Politics of envy (4, Insightful)

sparkydevil (261897) | about 5 months ago | (#45501651)

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.

Why not a minimum income (3, Interesting)

c5402dc53929211e1efb (3084201) | about 5 months ago | (#45501665)

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.

Re:Why not a minimum income (0)

Anonymous Coward | about 5 months ago | (#45501811)

Why not give everyone enough for food and housing and healthcare.

It seems that not everyone agrees what counts as "enough".

No (0)

Anonymous Coward | about 5 months ago | (#45501667)

It is an absurd proposal. It concerns something a government should not interfere with and it has no benefit.

Get rid of stock options for execs (0)

Anonymous Coward | about 5 months ago | (#45501693)

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)

the answer is co-op's (0)

Anonymous Coward | about 5 months ago | (#45501709)

It's a really simple and effective way to distribute risk/reward.

This is a terrible idea. (1)

jzatopa (2743773) | about 5 months ago | (#45501745)

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.

Not as bad as it looks (1)

benjfowler (239527) | about 5 months ago | (#45501747)

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.

The ratio should be the metric, not the means. (5, Insightful)

Max Threshold (540114) | about 5 months ago | (#45501751)

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.

Sub Contracting (1)

jader3rd (2222716) | about 5 months ago | (#45501821)

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.
Load More Comments
Slashdot Account

Need an Account?

Forgot your password?

Don't worry, we never post anything without your permission.

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>
Sign up for Slashdot Newsletters
Create a Slashdot Account

Loading...