For the past eight years, the average American's income has decreased slightly, thanks to inflation and mediocre growth, while the richest part of our society has seen a huge jump in income. Now that the economy's in trouble, we're all being asked to sacrifice, but our captains of industry are demonstrating, via huge bonuses for themselves, that while they're willing to take our money when they screw up, they aren't willing to chip in.
We are a relentlessly capitalistic society. So here's what I think: We're not getting our money's worth. We're paying for these people's salaries with our investments, our retirements, and now our taxes. And we've gotten s**t to show for it. As long as they can take as much of this money as they want, they have no financial incentive to improve things.
Here's my idea. For any company operating in the US, the salary of the CEO and other leaders - including stock options and such - should be capped at, say, 1000 times what the lowest-paid employee makes. So if you have minimum-wage workers, nobody at the company can make more than $13.6 million. If the CEO wants to raise his salary, he's gonna have to help the people on the bottom in order to do it. Also, any bonuses must be a percentage of total salary, and must be shared company-wide. The CEO wants an extra million, great, as long as the employees can get an extra thousand each.
I can foresee a few objections to this idea. Some might say that it's class warfare. The middle class has been getting shafted for a good long while here, while the rich get richer off of us. Isn't that class warfare? Besides, $13 mil isn't exactly the poor house. $13 thousand a year, which millions of Americans are supposed to be able to get by on, is in fact the poor house.
Some might say that this sort of plan would drive away talent. My first response would be, if what we've got on Wall Street right now is talent, then we can do with a bit less. But on a deeper level, it's a valid question. We do need smart people to run our businesses. But I suspect that $13 million a year (or more, depending on the company) could buy a certain caliber of talent. Those that wanted more money than that would leave, and those that were willing to make do with $6,000 an hour because they wanted a company to succeed would stay. And, in the long run, if the leaders who want more money go elsewhere, and the talented workers come here because things are good for workers here...I know which side I'd bet on.
I may be crazy here, but if I am, I'd appreciate someone explaining why.