A maximum wage?

[wolfigor]

If the shareholders (of a football team or a large corporation, it's all the same) are willing to pay someone lots of money, who are we to say they can't? It's their money, not the government's.

That's true until such companies accept bail-out money or government subsidies of any kind... at that point it is government (our) money at play.

 

[luiz]

You know, Czechs on average are actually very, very, very sceptical about the notion that the rich are rich because they worked hard and earned everything they've got. Maybe because most of the super rich in this country are outright crooked ex-commie pieces of *** and EVERYONE knows it. And since these people basically control both main political parties, nobody is doing anything to stop them from screwing our country. Even the Financial Times has finally realized that now.

So, if you're appealing to my anti-communism, this isn't really the most effective way of doing it

I am appealing to anti-communism, but I am also appealing to your good sense. Most super-rich are not super-rich because of wages. So what will capping wages achieve?

 

[luiz]

That's true until such companies accept bail-out money or government subsidies of any kind... at that point it is government (our) money at play.

Sure. I'm generally opposed to bailouts, but if we are to have them, exec wages can and should be capped, and there should be no bonuses until the whole bailout is paid back with interests.

 

[Winner]

I am appealing to anti-communism, but I am also appealing to your good sense. Most super-rich are not super-rich because of wages. So what will capping wages achieve?

1) Who says I am not going to do something about these people too?
2) Doing something to stop this spiral of madness is better than doing nothing. It's easier to regulate wages than to prevent people from accumulating capital.

What it would achieve is a degree of confidence among the public that certain sectors of the economy aren't completely removed from reality. It would also force companies to seek other, more sensible ways of motivating their top employees that just more money. With the salaries on the top now under control, perhaps some of this spare money could go to other people - you know, the ones who actually do the real work in the company. And these people could then buy goods and services from other people who do real work, stimulating the economy in the process and without the government doing the redistribution.

 

[Agarwaen]

But is social cohesion a concern for those in the top? There is no threat of evil bolcheviks convincing the masses to start a revolution. Maybe in actual dictatorships they fear an "arab spring" scenario, but in a modern capitalist democracy?

They can always use the "argument": people with more talents should earn more ==> people with more talents actualy earn more == some people with more earn have more talents ==> all people with more earn have more talents ==> your value is equal to and derived from your pay.

One good thing of the extreme left is that they can affect the median position of politics. If leftiest crazy thinking is "take all private property" we can expect on form of compromize, if on the other hand it is "slightly more progressive taxation, but don't worry we will still cut the wellfare benefits and keep all the previlages of the finances" we will get something very different.

 

[Tahuti]

Honestly, and I want your personal gut feeling, is it right for someone to make ridiculous money by, I don't know, speculating on the stock market? What bloody benefit is this person? How does he help the progress of the human kind? At best, he's a good gambler, an agent of abstract market forces that manifest through his greed. A computer could probably do his "job" and do it better (and hopefully it soon will).

Its quite easy and popular to smear speculators as evil gamblers that destroy the economy for their own benefit, but what speculators do is uncover weaknesses in businesses and markets sooner than they would if there were no speculators at all. It is just that they profit from it. Besides, healthy businesses cannot collapse because of speculation alone.

The same goes to the top executives and other jobs that are currently way overpaid. This madness needs to stop somewhere before we end up living in some sort of dystopian corporate feudalism with most of the wealth concentrated in the hands of a tiny fraction of the population.

The problem with the current form of capitalism is that shareholders seldom use the powers they have and defer everything to the CEO's. Which doesn't matter if the CEO's are large shareholders to begin with, but does if they don't have any interest in maintaining the value of a company.

 

[Mise]

Possibly, though I am not sure that getting $10m a year isn't inherently bad. To me it seems totally ridiculous that someone who doesn't in reality have any superpowers or work 36 hours a day can receive in a year the amount of money other people wouldn't earn in their whole life, even if they worked from the cradle to the grave. It isn't right, and it isn't even rational.

It doesn't seem explicitly right to me either, but what harm does it actually cause? It doesn't seem explicitly wrong to me. You mention trust later, but do you really think you can trust someone who earns a mere $1m any more than someone who earns $10m? Indeed, if the salaries of executives are linked to some fundamental metric of performance -- i.e. transparent, merit-based pay, as opposed to cronyism, nepotism and corruption -- then surely you would be inclined to trust those executives to "do the right thing" even less, because they have an even greater incentive to act in the best interests of the business.

If the CEO of McDonald's told you that McDonald's food was healthy, would you trust him any more if he earned 1¢ per year instead of $1m?

I get that people are motivated by higher salaries, but above certain amount, does it really matter? And what about the costs to the society, and morality-wise, to the notion of basic human equality? How can an ordinary person believe that we're essentially equal when some idiot in a suit gets more money from being laid off for sheer incompetence than their family has accumulated through hard work in the last 10 generations?

I don't mind if a CEO gets more money for incompetence than a family earns through hard work, as long as (a) the family has a basic minimum standard of living, and (b) the CEOs actions have no negative externalities. I don't struggle to believe that we are essentially equal -- that is, that we are equal in essence.

Ultimately, if there are externalities to high executive pay, then it's the right thing to do to regulate executive pay. But if you can't identify an externality then there's in fact no benefit to regulation.

 

[Rulle_Kebab]

We had some scandals here in Denmark...
Banks failing... I think between 10 and 15 banks collapsed.
And in every case the managers where paid huuuuuuge salaries and totally mismanged.
I dont find salaries reflect talents and skills. not in the banking world atleast.
Nepotism and dodgy deals are more the picture one gets.

 

[Patroklos]

Every DMV employee I ever met were in every case getting salaries that in no way reflected their talents and skills. If that were the case, they would be paying money not recieving it.

We can play this game with anyone, any profession, any place.

 

[Cutlass]

Ever rising executive pay is a symptom rather than a problem in itself. There's really nothing inherently bad about $10m per year salaries; what's bad is the system of corporate governance that allows those salaries to spiral out of control, without any link to the underlying performance of the business, to the detriment of shareholders, other employees, and society as a whole.

What I'm trying to say is that the problem is poor corporate governance, not executive pay. Poor corporate governance causes far more and far greater problems than excessive pay at the top; limiting executive pay won't solve those or any other underlying problems.

Locally we have this fun little game going on. The electric utility gave multimillion dollar raises to its top executives while reducing the number of maintenance crews and the routine maintenance being done. Result: When a storm comes by the percentage of customers that lose power is higher than in should be, and then the utility has half the number of crews per customer without power as similar utilities. And so it takes many customers longer to get their electricity back. And this the area with the highest electric rates in the continental US.

So you can't really argue that the executives earned the money. They just took it from others.

 

[Mise]

Do you not regulate your utilities in the US?

 

[Rulle_Kebab]

Every DMV employee I ever met were in every case getting salaries that in no way reflected their talents and skills. If that were the case, they would be paying money not recieving it.

We can play this game with anyone, any profession, any place.

I've been to hell. I spell it. I spell it DMV!

One of my favorite Primus songs

 

[downtown]

As I said, even if the salary can cap can indeed boost competitiveness among teams, by not allowing some super-rich team to monopolize all the talented players, it does nothing to enforce equality. Ultimately the fact that Lebron James is more popular will result in him making much more money than most of his counterparts, even if their wages are identical.

In Brazil usually more than half of the payment of the top footballers comes from marketing contracts. IIRC, Neymar makes about 15M USD a year, and "only" 5M are paid by his team. So even if there was a salary cap he'd still be making much more than most of his counterparts.

I don't think the arguement for salary cap in sport is to enforce equality...players are vastly unequal in ability, and nobody would think its a good idea to pay Lebron James what we pay Larry Hughes. Having a strictly regulated labor market has created a better marketplace for talent though. I see some of the stupid, inieffiecent crap that our headhunting firms do for executive searches. I could entertain the notion that tighter regulations could trim some of the "conspicious consumption" that eventually hurts business though.

It's not like setting a max salary at around 25 million/ year keeps the Tom Bradys or the Lebron James from working hard...

 

[Akkon888]

Establishing a flat maximum wage is communism in action. Reason being, there is no incentive to work a more demanding job, when it pays the same as a less demanding job. It reminds me of an instance in Russia when a taxi driver would not accept money (because he would risk a massive penalty) but did accept American cigarettes as payment.

You people also need to understand that a wage does not affect the upper class at all, or at least very minimally. Bill Gates does not receive a wage; he (or some Microsoft employee) distributes this money to the workers. The correct word should be a maximum income.

If we were to set the limit of income very high, say 1 million dollars/year, this would honestly not affect most people. The CEO's would lose incentives, and some good doctors/dentists as well; also good stock traders and businessmen. I feel that $1,000,000 is appropriate.

Any lower would hinder middle class incentive to work. Lower than that, and we are talking Soviet Union levels of economic stagnation.

 

[Tahuti]

You people also need to understand that a wage does not affect the upper class at all, or at least very minimally. Bill Gates does not receive a wage; he (or some Microsoft employee) distributes this money to the workers. The correct word should be a maximum income.

Yes, but note that Bill Gates doesn't have $50 billion on his bank account. What he owns + money is his $50 billion wealth that makes him the richest guy on earth.

 

[amadeus]

It would be a great way to speed up the offshoring of American executive jobs. I'm sure Toronto and Vancouver would be elated.

 

[Cheezy the Wiz]

Ok Winner, we could argue all day about whether we should dictate or not how shareholders pay people with their own money.

Shareholders don't pay executives with their own money, they pay them with our money and their money. Though to be honest, it's mostly a rubber-stamp. Shareholders are increasingly obsolete to corporations, it's now another part of the myth and the circus.

 

[dIZZyBlIZZy]

So you can't really argue that the executives earned the money. They just took it from others.

How do you take money from another that was your money already? If I pay you $9 to hammer nails for me then I decide for whatever reason (punitive, greed, slow business, etc) to drop you to $8.75, I took no money from you. I'm just paying you less for the same work.

I don't think the arguement for salary cap in sport is to enforce equality...players are vastly unequal in ability, and nobody would think its a good idea to pay Lebron James what we pay Larry Hughes. Having a strictly regulated labor market has created a better marketplace for talent though. I see some of the stupid, inieffiecent crap that our headhunting firms do for executive searches. I could entertain the notion that tighter regulations could trim some of the "conspicious consumption" that eventually hurts business though.

It's not like setting a max salary at around 25 million/ year keeps the Tom Bradys or the Lebron James from working hard...

It was supposed to enforce equality, but at a team level, not player. However creating parody does not create equality. Our Bucs still spent several years going 4-12 after the cap started (thank you Sam Wyche).

 

[Cheezy the Wiz]

How do you take money from another that was your money already? If I pay you $9 to hammer nails for me then I decide for whatever reason (punitive, greed, slow business, etc) to drop you to $8.75, I took no money from you. I'm just paying you less for the same work.

Because you as the employer do not decide the value of labor, merely the price.

 

[downtown]

It was supposed to enforce equality, but at a team level, not player. However creating parody does not create equality. Our Bucs still spent several years going 4-12 after the cap started (thank you Sam Wyche).

Right, but financial equality within the NFL meant that if your team sucked for multiple years in a row, it was because you were totally unable to draft or coach, not because you were always outbid for talent (compare that with baseball). By giving every market the chance to be successful, the NFL drastically raised the value of the organization, and of individual teams. A few superstars in NY, Boston and the Bay lost out on some money, but it allowed teams to flourish in New Orleans and Green Bay, which has been great for the league.