Salary caps are being proposed in some countries to get the highest paid individuals more in parity with the lowest paid ones. In Switzerland, for example, the cap has been set at 12x whatever the lowest level employee makes (Sutter, 2013).
I'm really not sure how I feel about this issue. The freedom-loving, die hard American part wants government as uninvolved in private enterprise as possible, but the compassionate side of me can see that the disparity is pretty ridiculous.
I'd love to see a non-regulatory solution to this. In other words, companies suddenly become more concerned about their employees than seeing how many zeros they can put behind their own salaries. There's no reason I know of why the huge bonuses paid to CEOs could not be reduced just enough to give a significant bonus to each and every employee. My company is really good about paying bonuses to employees, as well as giving us nice Christmas gifts. I realize that it's cheaper than giving everyone a raise, but it does a lot for morale to have earnable bonuses as well as a physical gift.
As far as increasing wages across the board, I don't know enough about running companies to know how viable that really is. I know that minimum wage increases can cause a lot of pain to smaller businesses until the market completely adjusts. Which usually includes raising prices, which once again can trigger a need to raise the minimum wage.
I've seen graphs and charts and statistics from labor unions showing how the compensation for top earners has increased exponentially for the last several years and the bottom wages are barely registering an uptick. I agree that looks out of whack, but does it take into consideration taxes paid as well as money that is reinvested into the business to keep jobs or create more?
Wealthy people tend to want to stay that way and become more wealthy, so they invest. Lower income individuals, even those with disposable income, tend not to save and invest. This is a big reason why they remain lower class, even more so than their pay. So even if wages were increased, spending habits would still have them living paycheck to paycheck unless behaviors changed. But I digress. This is about what top earners can do to help. What people can do to help themselves is fairly obvious.
To sum up, I think top earners are missing an opportunity to meaningfully impact the lives of their employees as well as improve the perception of big business and multimillionaires in general. Many of them are very philanthropic and donate vast sums to charity every year, but perhaps it would be better spent on the hundreds or thousands of employees on their front lines.
Sutter, John. U.S. should copy Switzerland and consider a 'maximum wage' ratio, too. CNN.com. Retrieved from http://us.cnn.com/2013/11/21/opinion/sutter-swiss-executive-pay/?iref=obnetwork December 9, 2013.
I'm really not sure how I feel about this issue. The freedom-loving, die hard American part wants government as uninvolved in private enterprise as possible, but the compassionate side of me can see that the disparity is pretty ridiculous.
I'd love to see a non-regulatory solution to this. In other words, companies suddenly become more concerned about their employees than seeing how many zeros they can put behind their own salaries. There's no reason I know of why the huge bonuses paid to CEOs could not be reduced just enough to give a significant bonus to each and every employee. My company is really good about paying bonuses to employees, as well as giving us nice Christmas gifts. I realize that it's cheaper than giving everyone a raise, but it does a lot for morale to have earnable bonuses as well as a physical gift.
As far as increasing wages across the board, I don't know enough about running companies to know how viable that really is. I know that minimum wage increases can cause a lot of pain to smaller businesses until the market completely adjusts. Which usually includes raising prices, which once again can trigger a need to raise the minimum wage.
I've seen graphs and charts and statistics from labor unions showing how the compensation for top earners has increased exponentially for the last several years and the bottom wages are barely registering an uptick. I agree that looks out of whack, but does it take into consideration taxes paid as well as money that is reinvested into the business to keep jobs or create more?
Wealthy people tend to want to stay that way and become more wealthy, so they invest. Lower income individuals, even those with disposable income, tend not to save and invest. This is a big reason why they remain lower class, even more so than their pay. So even if wages were increased, spending habits would still have them living paycheck to paycheck unless behaviors changed. But I digress. This is about what top earners can do to help. What people can do to help themselves is fairly obvious.
To sum up, I think top earners are missing an opportunity to meaningfully impact the lives of their employees as well as improve the perception of big business and multimillionaires in general. Many of them are very philanthropic and donate vast sums to charity every year, but perhaps it would be better spent on the hundreds or thousands of employees on their front lines.
Sutter, John. U.S. should copy Switzerland and consider a 'maximum wage' ratio, too. CNN.com. Retrieved from http://us.cnn.com/2013/11/21/opinion/sutter-swiss-executive-pay/?iref=obnetwork December 9, 2013.