As for executive salary caps, I'd put it as a direct percentage of the average employee's salary. No executive shall make more than 2000% of the average employee's salary at that particular company. This encourages higher living wages for all employees, but still leaves room for lower-paid unskilled positions (and ensures that they are more likely to receive a wage above the poverty line, as well).
Hi,
There are simple answers to the problem of economic disparity but no simple AND practical answers. This suggestion would certainly seem like a simple and practical solution that addresses the gap in compensation but it simply would not work as a practical remedy, for a number of reasons. Let's start with what we all know - Corporations exist to make a profit. Let's then assume there was a regulation that declared that the individual salaries of the executive officers must not exceed a specified multiple of the average employee salary within the corporation. What would happen?
Would the board of directors convene to authorize raising the salary across the board in order to keep the CEO salary at it's current base prior to regulation, or would they simply lower the CEO salary? As stated, the goal of any Corporation is to maximize profits. With this goal in mind, consider a corporation with 20,000 employees, Would it be more profitable to simply lower the CEO salary from say $10M to $5M or increase the total payroll by $20M to meet the average requirement? No answer is needed here.
Unless one were to introduce legislation that not only regulates the officer salary but also requires a boost in all employee salaries, the action does nothing practical but increase the corporate profit by $5M. With the goal of profit in mind, why would any corporation adjust the overall salary instead of just lowering the CEO wage? It's not like the CEO would refuse to work --they would have no choice, as all corporations would now have this requirement. You would have accomplished nothing in achieving the goal of adding income to the bottom tiers. What results is simply lowering the market value of the CEO while failing to increase the market value of any other employee.
Now, if you start to really get serious with this type of legislation and start to demand that corporations raise the salaries globally(and thereby lower profits), you have a problem. In this case, the board of directors and shareholders will likely just say, OK, forget it then, I will take my cash and my profits and take my ball and go home - let the government build their own software company.
Or, you can do what the Soviets tried - have the government build the factories and control production. Salary then becomes moot. Raid the corporate offices with plowshares and bash everyone over the head and hang the board of directors and executives. You can then set up a new system run by a governmental party that controls labor and production. Comrade Grizz, you WILL report to work tomorrow and make computers ! In exchange for your labor, you get to share a small apartment with five other people and will be supplied weekly rations of bread and borsch. For entertainment, each apartment is supplied with a black and white TV so the occupants can watch government-run TV stations showing commercial-free programming featuring reruns of the workers party parade.
People will always strive to make their lives better and more comfortable. In the developed world, we have the bare essentials we need to survive; however, we are not content with just survival--we will always want more than bare essentials. The corporations simply gives us what we crave. Regardless of who you are, where you are, or what your political and economic system is, you will always have the desire to live more comfortably and more efficiently. Fulfilling this desire requires the ability to purchase more refined goods and services. This in turn requires an economy where these increasingly sophisticated goods and services are available to the consumer that demands them. Such a market requires people who are motivated to maximize profit by investing in a corporation that will then have the capital to manufacture such sophisticated goods. At the fundamental level, this entire system is built upon a consumer base that is interested in more than just survival.Take away the profit potential and you take away the desire to spend the investments. Are we willing to give up our flat panel TV's and SUV's to 'make things right'?
We are well beyond the evolutionary hunter-gatherer stage of existence. Most of us do not work to survive, we work to maximize our comfort. We are not concerned where our next meal will come from, but how enjoyable it will be to the palate. We have a refrigerator full of food but get bored and head out to TGI Friday's to spend more of our wealth on something we do not need to purchase.
I ask anyone reading this thread to honestly and privately answer this question: Is our angst against the disparity in wealth primarily motivated by the unethical status of the disparity itself, or is it motivated to a greater extent by the observation that although we may work as hard as others, some can purchase a vastly greater supply of comfort and material pleasure in life than we are able ?
To someone in the third world who's main worry is bare survival, we are not poor, none of us. We are a society who has much more than we need to survive, but that simply is not good enough. There are many in this world who would give their fight arm(and leg) for a bare-bones shack with running water, 3 rudimentary meals a day from the fridge, sanitation, police protection, and a bus system to take them here and there. I suspect the real beef for many is that we have to settle for a mere 32 inch flat panel LCD instead of a Plasma and are forced to spend $4 a gallon for gas to make it to the ball game.
Legislation can be effective but instead of waiting for the bureaucrats to step in or expecting corporations to stop giving us what we are asking for without making large profits, we need to ask what we can do individually. It would be more prudent to rely on our own good nature and share some of our own personal wealth. Why haven't we done anything? We are just as responsible and guilty.We should feel blessed that by pure luck of the draw we have been afforded the opportunity to live in a society that has given us the opportunities and privileges that we now have.
If each of us took a bit of this privilege and donated a mere $20 of our wealth each year to a relief fund or legitimate global charity effort, we would make a serious difference in distributing goods and wealth. This would not give others the material benefits we have but would certainly go a long way in alleviating the poverty and suffering.
There are many legitimate agencies and social services out there, whether religious or secular. If you want to do something without waiting for others to act, find one of those and donate your time or money. These are things WE can do NOW to bring about change and make a difference. Not only does it make you feel good knowing you can help makes a difference, it is also more prudent than waiting for governments to cure all of the social ills.
There are no easy solutions to these problems. As I said in another thread, the consumer has more power to bring about change than the government ever will. This system is made for us and by us. We built it and we feed it by our consumption patterns. Corporations are simply giving us what we want. That's what they do. In exchange for providing the goods and services, they make a profit.
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