Minimum and Maximum Compensation--A Modest Proposal

[leftofthedial]

So much is so thoroughly broken in this country that it is hard to know where to start fixing things. Here is a suggestion.

Virtually every facet of our society is driven, when you boil it down, by money—either the lack of it or the desire to acquire and/or accumulate it. As a progressive, I am driven by a powerful, fundamental commitment to social justice. In many ways, social justice begins with economic justice. The laissez faire capitalist fundamentalism that has come to dominate our society has resulted in severe structural problems in our economy, or society, and the moral underpinnings of our culture.

Currently, American CEO’s “earn” more than 400 times the average worker’s wage. That translates to nearly 1000 times minimum wage. This causes more problems than I can recount here, including:

* Exacerbation of the economic problems inherent with excessive concentration of wealth

* The creation of a super-wealthy class that increasingly wields overwhelming political influence and views
itself as separate from and superior to the majority of their fellow citizens

* The creation of unwise, unsustainable public policy in the service of the wealthy at the expense of the majority

* Fundamental unresponsiveness of our political institutions to society’s problems

* Creation of a culture that values capital over people

* Intense downward pressure on wages, especially at the bottom of the scale; this has created perpetually
indentured servitude for the working poor and a host of massive, multigenerational social problems

* A growing culture of corruption among corporate executives

Unchecked, I believe the status quo will completely destroy democracy within our lifetimes, if indeed it has not already done so.

By indexing the maximum compensation to the minimum compensation and ensuring that the cap is “low,” we will see an immediate rise in minimum wage. Much debate is needed to set the exact ratio, but I argue it should be “low.” I believe we should set a maximum compensation limit at no more than 25X the minimum wage. Assuming a 2000-hour-per-year full-time schedule, a $10 per hour minimum wage ($20,000 per year) would mean a $250 per hour maximum compensation ($500,000 per year). Note that this system creates pressure on the “haves” to raise the minimum wage. A higher minimum wage means a higher maximum wage.

Further refinements would provide universal health care (saving employers billions of dollars), incentives for savings and responsible investments in society and hard limits on inherited wealth. I would also create incentives for truly cooperative, worker-owned ventures.

I make no bones about my belief that the elimination of a super-wealthy class is desirable for the restoration of American democracy. If they can’t stand their ox being gored, let the super rich leave America and take their assets to another country somewhere and start destroying its economy and social infrastructure. It can’t be worse for America than what the wealthy have done to us already through their repuke surrogates.

[Trillo]

1. Didn't Japan have something like this?

Or was that just a hoax I read years ago?

[leftofthedial]

2. Japan has a much lower CEO:worker comensation ratio

but I think it was more cultural than statutory.

[Warpy]

3. The average small businessman makes about $50,000/year

Does that mean he'll get to pay his workers $.96/hour?

A floor is as necessary as the ceiling is.

[leftofthedial]

4. the floor for the minimum wage should be indexed to the actual

cost of living.

It may be that regional variations are necessary.