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It's an idea that's radical in its simplicity.
Swiss voters on November 24 will consider capping executive pay at 12 times what the lowest-paid worker at a company makes -- the premise being that a CEO should make no more in a month than a low-level employee earns in a year.
The referendum, which is called the "1:12 initiative" and began after supporters gathered 100,000 signatures to put it on the ballot, is the kind of elegant solution to income inequality that we in the United States should consider more seriously.
John D. Sutter
John D. Sutter
Not because the initiative, as it will be voted on, would work in the United States. It likely wouldn't. But because the idea of tethering top executive pay to SOME sort of concrete metric might stop American execs from floating further into the stratosphere.
The average U.S. rate is 354 to 1, according to the AFL-CIO.
Others put the ratio somewhat lower, around 273 to 1 in 2012.
Either way, it's bad. And some U.S. companies are worse, still. JC Penney Co. has the highest ratio -- 1,795:1 -- on a list of 250 businesses compiled by Bloomberg. That department store's CEO got $53.3 million in pay and benefits in 2012, Bloomberg says. Workers, by comparison, earned only about $30,000 a year.
So, like, whatever, right? What's Miley up to? It's tempting to excuse sky-high exec pay as either necessary (to attract top "talent" and because these inequality-era celebs are thought to increase the value of the companies where they exercise said talents) or inconsequential. The Swiss vote, for example, does nothing to increase average worker pay. It aims solely to clip cash from the very top of the economic ladder.
I still think revamping our tax code back to the way it was in the 50's and 60's would be sufficient to get much of that money back in circulation in the hands of those who work for it.
A $1 million salary worked for American CEOs from the 1930s to 1980s, she said. CEO pay, including options realized that year, jumped about 875%, to $14.1 million, from 1978 to 2012, according to the Economic Policy Institute.
That increase, which is calculated using 2012 dollars, according to EPI, is "more than double stock market growth and substantially greater than the painfully slow 5.4% growth in a typical worker's compensation over the same period."
A 5% increase at the bottom versus 875% at the top.
If I spend my life founding my own business and working like a dog to see it turn over a good profit, I'll be damned if I let a money grabbing little socialist drone tell me how much I can take home.