U.S. should copy Switzerland and consider a 'maximum wage' ratio, too

edition.cnn.com...

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.

Oh how very refreshing! It's an actual good idea!! And, (excuse me while I polish my fingernails on my lapel), one I have proposing FOR YEARS NOW!!

The gap in income is abominally immoral, unnecessary, and unconscionable. That it has been allowed to go this far with only lip-service efforts to curb it is simply UNACCEPTABLE.

I will let you all read the article and get back to me...
be aware that the author is not saying the 1:12 would work here, but...1:100 might be a start. A feeble one, but a START toward better distribution of resources to the benefit of ALL.

I have to agree that income inequality is at ridiculous levels and most of what these overpaid execs get is the rightful product of those who produced it - which leads me to wonder why they pay bankers anything at all.

I am loathe to join the wealth redistribution bandwagon though, I also believe people should be allowed to keep what they earn.
I guess the key here is earn.
1:12 ? never fly here. Agreed.
1:50 ? Possibly, but it would still be protested loudly by those who live in Westchester county.

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.

What I don't get is how they can't see that making so many people poor destroys the very market they profit from?
Who will be left to buy their junk once they have all the money?

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.

1,795: 1. That is appalling, inexcusable, and immoral.

reply to post by Asktheanimals

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.

I couldn't agree with you more!

The article says:

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.

Mind-blowing. I don't get it, either. If we are all exhausted, destitute, and left with nothing, who will shop??

It will never happen here and probably won't work if they vote it into law there.

It will be written as such that the CEO makes 12x the lowest employee...so the CEO designates a new CEO, takes on the title of janitor and continues to make 100x...

Or bumps up bonus'...thats probably not considered salary.

What if said company owns a factory in china where lowest pay is $0.50 an hour?

Its sounds almost like a good idea but when the gov't starts telling people how much they can earn???

Its not going to raise the income of the lowest paid worker. The only thing that will do that is boycotts.

Remember when Arizona was going to pass some well justified laws regarding proving citizenship if stopped by police, the whole country boycotted AZ...
Speak with your dollars

I like it!
The only way for the top 1% of greedy pukes within a corp to earn more money is to raise the salary of the lowest-paid guy. As focused on profit and greed as these guys are, it would only benefit the people underneath who do the actual work

reply to post by wildtimes


Even if you make executive pay 1$ they will find another way to get paid.

Have you ever heard of capital gains?

What about owning stocks?

How bout Bitcoin?

Government has never been successful at limiting pay because the people that it limits the pay of are the peon workers. I wish people would realize that. More laws to limit pay is laughable at best as a solution.

If you want to limit the pay of CEOs then stop all the tax breaks and legal shields for corporations.

I prefer to determine my own maximum wage, which is no ones busines but my own.

Some people seem to spend too much time counting other peoples money, don't they?

The govement tells the average american what he can smoke, who he can marry, how much he can drink, how fast he can go, what kind of gun he can buy, what children are thought in school, what women can do with their bodies.... but noooo dont tell the 1% ceo how much they can make. Its anti-American. Yes we can make it work. Get enough people to believe in a dream and it will become reality.

reply to post by TheWrightWing


When you work alone, of course. But when you work with others, you need consider them also, not take everything to yourself and leave scraps to others, despite them doing the hard work.

A company is a collective. Every employee contributes to the profit, not only CEOs, as salaries seem to show. They make the decisions, while employees realise the decisions. Without employees there would no profit, so they deserve their fair share.

reply to post by wildtimes


I hope the Swiss voters are successful in this endeavor. This is the only way to truly fix the illusion that the current minimum wage is sufficient to sustain life. IMO, this method of calculating acceptable minimum wage levels is the is not only fair, but it shouldn't require any future adjustments because of the fact that it will always maintain the balance by virtue of the ratio.

It's really is a very simple approach to a long standing problem and it should also serve to satisfy those who call for the elimination of dictated minimum wage levels in dollars and cents.

F&S for the OP!

reply to post by wildtimes


1:100 is still too high. Maybe 1:50. Also it the ratio needs to be on complete compensation which includes perks, benefits, stock options, salaries.

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.

Everyone is missing the point. There are many hard workers who work 12 hour days, are clever, and build businesses for themselves. To limit pay is ridiculous and ignorant in regard to how this system actually works. At one time the most popular vehicle of millionaires in the U.S. was the Ford F-150...I'll let you take a guess as to why...

If you are all truly worried about the inequity of pay then you should first understand WHY it is happening. Please look these up to research further the causes of unequal pay

-Federal Reserve Banking Cartel(I will recommend "The Creature of Jekyll Island")
-Legal shields for corporations
-Tax incentives for corporations

and so on.

Just to give you an idea, what do you think would happen to corporation structures if suddenly the shareholders, ceos, cfos, etc. were legally liable for unethical decisions in court? What if a CEO could be personally sued by a customer?

Imagine.

Now imagine what would happen if there were no laws, no tax breaks, no government intervention to prop these corporations up and make them corporations... they would just be large companies of people working together. There would be no employer tied insurance. There would be no incentive for employees to stay with bad companies. Employees that were with bad companies would work elsewhere guess why? They would be liable for bad company policies.

Instead of a company being sued an employee would be sued. Imagine how THAT would effect the choices of each and every person.

reply to post by wildtimes

Hey wildtimes - interesting food for thought.
While one part of me wants to jump on the bandwagon and shout "Let's Do It!", another part says - "Wait a minute. Even under the current paradigm, I have to do the other lazy bums' work...and I only get paid as if I'm doing my work - while they get paid...for my work...but - if I don't do their work, too...it won't get done...and then, we'll lose the contract/s - and I won't be getting paid...anything!" (yes - that 'other part of me is long-winded).

If what I just wrote was in any way true or accurate...then you can see why I might be frustrated at the notion of "equal pay". Some of them are not lazy... They are just not very proficient. Many of them, however - are mooching brown-nosers. They operate under the ladder-climbing philosophy of "it's who you know" - and those making the big bucks (that the OP targets) only care or notice, when some belt-tightening is called for - to keep the margins sufficient to maintain their lofty revenue packages.

In the end, though - you probably know as well as I, that - those upper-crusters, whose salaries & incomes would be adversely affected by such an enactment...would find ways of keeping (or increasing) the disparity in place, while inflicting more pain and misery on those that voted for the proposition.

...just rambling...

reply to post by wildtimes


I will caveat that there is great income inequality in America. I will further caveat that there is systemic greed.

But the very second that you cap salaries, the very second you limit pay, you open the door to a host of potential abuses.

Imagine the government just limiting free speech. And they say it's only the really "bad" words.

What's to stop them once the oppourtunity exists to limit more?

Unsympathetic
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.

Are you also saying that if you made unlimited amounts of money from the labor of your workers they deserve none of that?

reply to post by Unsympathetic


And how many employees work like a dog to help you make it happen? Do they have to starve you could earn your profits?

Walmart would be nowhere without its 2.1 million employees...

I have yet to see a billionaire running a one-man doing every single product, every single servicing on their own.

Every fortune500 company has thousands if not millions of employees around the world working like dogs in order for the "big guys" to earn profit.

reply to post by beezzer


There is no freedom of speech for companies that market cigarettes.
Yet they extract more revenue per dollar from cigarettes than any other product.

It seems to me our government is socialism for the rich and corporations and capitalism for everyone else.
Free market my backside.