General Question

talljasperman's avatar

If we can have a minimum wage then, for balance, can we also have a maximum wage?

Asked by talljasperman (21739points) February 7th, 2014

Like they do in sports and politics (sometimes) we have a salary cap. Can we have the same maximum and minimum wages in other fields?

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34 Answers

jerv's avatar

Theoretically, yes. However, that would require legislation, which involves lobbyists.

Now, who do you think has more political clout; voters or those that can hire dozens of lobbyists and finance re-election campaigns?

So “can” and “can” are two different things :/

Coloma's avatar

Sure. My maximum wage is $300 an hour, but I’ll give you wage control. lol

stanleybmanly's avatar

There is a growing wave in the country toward asking such questions, and it’s important that the issue of wealth disparity and the reasons for it are maintained in the public mind. Because the current realities were DESIGNED to be the way they are

Jonesn4burgers's avatar

I believe there should be a minimum wage for under 21 and another for over 21.

talljasperman's avatar

@Jonesn4burgers That sounds good , but what about when one becomes a senior does the minimum wage go up or down again?

Jonesn4burgers's avatar

No. Insurance does that. minimum wage lowered for seniors, why? Under 21 tends to be less experienced, undertrained, less responsible. ( I did not make that statement all inclusive, so nobody needs to rag on me about those rare exceptions) One does not become less experienced as they age. their value would increase, if anything, certainly not lessen.

talljasperman's avatar

@Jonesn4burgers So how about a minimum wage indexed for age and inflation?

johnpowell's avatar

Dennis Kucinich proposed something along the lines of the CEO could only make 14 times what the janitor did. The embarrassed millionaires of Ohio promptly decided to not elect him again. He now spends more time with his wife.

nebule's avatar

Hmmm nice question! I wonder what would happen to the footballing world!!??

LostInParadise's avatar

This may be something that eventually happens. It makes good sense to me.

Switzerland had a vote on whether the ratio of maximum to minimum wages should be capped. The proposition failed miserably, but it is of interest that there was even a vote on such an idea.

The Mondragon corporation in Spain is the world’s largest worker cooperative. Representatives elected by workers determine maximum wage ratios.

Cruiser's avatar

Salary caps in sports are there to prevent a team owner who has near unlimited resources from simply hiring an entire team of the best of the best and dominating the franchise. Salary caps in sports in the spirit of the concept level the playing field.

To install salary caps on businesses would create ceilings of income that one could achieve and once that person who may be a truly great innovator will inevitably cause that person to stop working harder and stop innovating. That is poison not only to the company but to the overall economy at large. Salary caps would essentially be simultaneously putting caps on the growth and expansion of the business and the economy and again also putting a ceiling on innovation which is the life blood of new developments of new technologies a leading world country such as the USA needs to remain a world leader.

Here is a real life example….mine. As owner of my company…if I am limited in the amount I can pay myself….once I hit that level of income….what reason is there for me to do more? If I do continue to produce at my company….what happens to those profits??

Obviously it would serve absolutely no purpose to work more than what this wage earnings limit would give me and that in turn sets a limit as to what wages and benefits I would give all my employees. You could then kiss goodbye higher matching 401K contributions, larger bonuses and probably company car benefits. All sorts of perks and additional income would now be denied the true performers in my company that in essence enable these hard working employees to have a sense of personal achievement for working hard(er) to earn more money.

Without question wage limits are a BAD idea!

jerv's avatar

@Cruiser ~And that is why every innovation in the last few decades has come from the US; the rest of the world is too lazy due to the lack of incentive inherent in policies designed to benefit society instead of just the elite.

“Here is a real life example….mine. As owner of my company…if I am limited in the amount I can pay myself….once I hit that level of income….what reason is there for me to do more? If I do continue to produce at my company….what happens to those profits??”

Spoken like a person who is motivated by nothing but greed. Now, I know you well enough to know you aren’t actually like that, but if I didn’t, I would assume that you wouldn’t care about (or possibly even understand the concepts of) pride, patriotism, or altruism. I mean that really does sound like something that a person whose sole motivation for anything is money.

You could get around that wage cap by paying your workers better, or using more of the company’s revenue for growing the business instead of paying executives…. but that’s un-American. Never mind that Costco seems like a profitable company, and their CEO seems perfectly happy earning only about $500,000/year.

Without question, the arguments against wage caps are ideologically driven scare tactics disproven by history.

LuckyGuy's avatar

@jerv Before you hold Costco up as a good example there is something you should know. Last year they gave out a special $7 per share dividend so their shareholders could avoid some tax. Their top dogs each pulled in between $4 Million and $7 million from that move alone. The CEO made much more than $500,000. No doubt he was also granted stock options. Don’t be mislead by those low numbers.

jerv's avatar

@LuckyGuy Are you saying that executives can still be well-payed even if the workers are earning double the minimum wage and getting full benefits?

Of course, it is true that most executive compensation (the figures we get when we hear about how much they earn) is not in the form of salary. Many are “dollar a year” executives who still make millions.

Cruiser's avatar

@jerv Your comments are unwarranted and have everything to do how well you do not know me. If my company makes more profits then not only do my employees benefit (as of course I do) but so do so many other people in the process. If I produce more I buy more…my vendors make more profits and distribute their gains. More truckers are involved, more customers are involved and hopefully they are making profits and distributing them. Overall this is a huge benefit to both the economy and the Government who will then be able to collect lots more taxes to support the programs that make our country prosperous safe and secure.

Again @jerv after all these years you still assume so much about me and that is water off a ducks back as I am used to snap judgements. I take a salary and have not had a raise in 5 years. The rest of the profits stay in the bank for potential growth or disaster which ever comes first. But in these 5 years all the employees have had both raises and bonuses despite flat growth of the company due wholly to the policies of a President who thinks it is best for our country to steal from the rich to give to the poor. Despite paying 6% higher personal taxes, losing 2% in payroll tax exemptions, despite the 30% increase in healthcare costs, which I have not passed on to my employees….as why should my hard working employees bear the penalty of lousy economic policies. Yes they may have voted for the anointed one, but that was an emotional decision I can understand and fortunately I can also insulate them from the repercussions of this decision and do so happily as they show up everyday on time…they work their asses off everyday and deserve recognition for their efforts. I bank a whole lot less money because of all of this and yes I feel entitled to express my opinion on these political matters that affect me, my family and my employees in such a direct way…what I will not stand for is arm chair sniping from you or anyone else who so chooses to not take the risks I have taken to better my life by buying and running a company that at any moment could put me and many other families on the street if I do not manage the affairs of this company. You sir have no clue and until you do please keep your selfish obstinate comments to yourself and instead of championing wage caps get off your ass and enjoy the nectar of what hard work will yield.

SavoirFaire's avatar

@Cruiser A maximum wage need not act like a salary cap. The most common maximum wage proposal is more along the lines of what @johnpowell mentioned: a proportional cap. So if your business does better, there is no ceiling on what you can pay yourself. It’s just that you would have to make sure that none of your employees make less than a certain percentage of what you are paying yourself.

A rising tide lifts all ships.

Jaxk's avatar

Sounds like an excellent way to move the rest of our industry overseas.

nebule's avatar

@jerv As an English person I object slightly to be called ‘lazy’ – your comment was a bit general :-/ just saying :)

jerv's avatar

@nebule Sorry, you must’ve missed the sarcasm tag in that opening sentence.

@Cruiser Most of that post illustrates why I feel you are a far more decent person than many business owners. If there were more like you, we wouldn’t be having this discussion.

The thing that gets me is that the majority of economic activity is the result of average workers using their income to buy stuff. Less disposable income leads to lower demand, so either companies suffer reduced revenue (with all that entails), or try to compensate for lost volume by pricing themselves out of the market. Why, then, do those who claim to want a strong economy seek to keep all of the economic gains at the top rather than use the increase in overall wealth to get more money flowing throughout the whole system? Maybe even enough money to reduce reliance on government programs, thereby getting the smaller government that they allegedly desire. You don’t start a fire to cool off, you don’t jump in a pool to dry off, so what makes anyone think that doing the opposite of what you need to do works in economics?

@Jaxk For the “shooting ourselves in the foot” reasons listed above, maybe it’s a sign that America isn’t fit to do business any more. There was a time when we were the most competitive… and that coincides with executive compensation being a far smaller multiple of average worker’s wages than now. An era where overall growth led to prosperity for all, yet not so socialistic that those who worked harder couldn’t earn a bigger slice of the pie.
I have no pity for those who inflict grievous harm on everybody and then complain about getting hurt. Let the migration of business overseas serve as a sign that our unique inequality leads to a hell of a bubble that leads to financial disaster. If that’s the price we pay to keep future generations humble, c’est la vie.

rexacoracofalipitorius's avatar

@Cruiser said: “if I am limited in the amount I can pay myself….once I hit that level of income….what reason is there for me to do more?”
@Cruiser also said: ” I take a salary and have not had a raise in 5 years”

and then @Cruiser said: “I bank a whole lot less money because of all of this”

So, Cruiser, you are not only not paying yourself more but are actually paying yourself less? What’s your motivation to “do more”? In what way have you bettered your life by running the company in the way you do? You say yourself that your company could put you “out on the street” at any moment. That doesn’t sound like a very well-run company. It sounds like you and your employees are subject to some very “lousy economic policies” indeed; not ones imposed from outside, but ones implemented by you.

Or perhaps you’re just lying, and/or incoherent.

@jerv Don’t worry, the Free Market will Fix Everything.

SavoirFaire's avatar

@rexacoracofalipitorius While I appreciate it when people point out the contradictions in an argument as much as anyone, there is really no reason to suggest—and even less reason to believe—that @Cruiser is lying or even so wrapped up in contradictions as to be incoherent.

rexacoracofalipitorius's avatar

@SavoirFaire In general, that is in fact what contradictions suggest. However, to please you, I would have edited the comment to remove that bit, had I been allowed to.

SavoirFaire's avatar

@rexacoracofalipitorius Contradictions can arise in many ways, some of which are very subtle. Very often, they result from separate trains of thought that each seem properly justified on their own. Lying is an intentional act, however, and incoherence requires a particular level of confusion and unclarity. Therefore, I disagree that contradictions generally suggest either. Combing through one’s beliefs for contradictions is a difficult task, which is why it is best done in cooperation with others. We are all confused to some extent.

In any case, thank you your response. Like I said, I do believe you have pointed out something important. I just don’t think that @Cruiser has revealed himself to be dishonest or thoroughly incomprehensible.

Cruiser's avatar

@SavoirFaire That is very much in line with the Safe Harbor 401K program I have in force at my work. I am allowed to invest a max amount of tax deferred income but it requires that I contribute at a predetermined percent to each employees 401 account as well. It is a terrific vehicle that allows officers and employees to take advantage of a great retirement program, but the obvious down side is money put into a 401K is not money in their pocket. To the employee it is like kissing your sister.

Cruiser's avatar

@rexacoracofalipitorius There is so much more to my story….I signed away everything I own including my life savings and 50% of my 401K savings to buy the company I worked for. I now owe $12,000,000 that I have to pay back over the next 12 years. If I default at any point in time I lose everything I have. Sounds like a monster risk and 3 years ago it was not such a bad deal. But since then, Obama has eliminated the 2% payroll deduction Bush had put into law that benefited both you and I. My Governor has raised the state taxes by 1.5%, Federal Taxes went up 5% for me, Obama care is costing my company $4,575 more per year and yes I complain but I know that I have to work just that much harder to meet the bottom line I have to meet in order to not default on the $12,000,000 loan I have to re-pay. Please don’t judge me when you have no clue as to what I have to deal with on a daily basis.

flutherother's avatar

Rather than a maximum income a graduated taxation system that requires the wealthy to pay a greater percentage of their income is the best way forward. Under the present taxation system people can become ridiculously wealthy. I would change it so the wealthy remain wealthy but have to pay 99 cents tax on every dollar they earn above a certain amount. I would use the income gained to raise the minimum wage.

SavoirFaire's avatar

@Cruiser For the record, I’m happy with my 401k. Not like kissing my sister at all.

Cruiser's avatar

@SavoirFaire I am glad to hear that…a good portion of my employees have made it abundantly clear they would rather have a paycheck bonus than the 401 K contribution I make on their behalf.

SavoirFaire's avatar

@Cruiser Serious question: why is that not an option? I was not forced to take a 401k. I chose to do so. Is there a reason your employees cannot opt for a paycheck bonus instead?

jerv's avatar

@Cruiser With all that debt, it sounds like you’re not in any real danger of hitting any wage cap anytime soon, especially not if you treat your employees reasonably rather than as serfs that only get paid at all in order to avoid breaking anti-slavery laws.

Cruiser's avatar

@SavoirFaire For a IRS sanctioned 401K Safe Harbor account the employer is allowed to sock away a sizeable potion of income tax deferred but the caveat is he is then obligated to fund each employees 401K account at a predetermined percentage ratio. There are caps in place to prevent owners from going hog wild but the employees do benefit because the business owner is required to contribute to each employees 401K again based on a % multiple of the employees yearly wages against the amount the employer elected to put into their safe harbor account.

Cruiser's avatar

@jerv I am truly a fair person at heart and did not take on this challenge to just make myself wealthy….I am a simple man…I have all I need and share the rest I do earn.

jerv's avatar

@Cruiser Again, that is why I think you’re a better person than many. However, it does make me wonder why you have a stake in this argument, as it seems like you’re the type of guy who would take the profits and re-invest in the company and/or it’s workers rather than just the executives.

Cruiser's avatar

FYI….I have reinvested a significant chunk of change in a new website last year and this year I am installing a new server and accounting software that will allow us to do many of our daily tasks more efficiently. I am so used to downloading software for free and to have to pay $10,000 for it stings plus another 10K for implementation….serious ouch!

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