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Set an Earnings Ceiling: The Path to More and Better Jobs

We can end the cycle of the rich getting richer and the poor getting poorer, and in so doing create more and better paid jobs.

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When Ben and Jerry's was starting out, it capped earnings for its highest-paid employees at five times the amount paid to its lowest-paid employees. It raised the rate overtime, and Unilever eliminated the earnings cap after its takeover of the company, but the example survives nonetheless. 

Today, executives get paid millions ( with the average CEO getting paid about $750,000 annually, not counting stock options and other bonuses), while many of their employees, in more physically arduous jobs, work for minimum wage. 

Since the dawn of Reaganomics, the average executive has gone from being paid 20 times the salary of the average worker to more than 230 times the average worker. 

We need to restore a balance. If we cap the amount executives earn, then we can help reduce the earnings gap and help create a more equal society, as well as free up companies' payrolls to hire more workers and pay low-wage workers more. It's win-win-win. 
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Attachments (2)

VanityFair-1Percent-May2011.pdf

Vanity Fair: Of the 1%, by the 1%, for the 1%

EPI-CEO-pay.pdf

Economic Policy Institute: CEO pay and the top 1%

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Photo of Steve Kube

Thanks for the input, David. I understand this is done in other parts of the world, perhaps not as much as might be necessary? Another possible solution is a wealth tax. One big concern many of us have has to do with sustainability. A wealth tax could discourage using up our limited resources.

Oh, by the way, a huge number of those minimum wage jobs you mention are only good for up to 29 hours per week so the employer can avoid paying benefits.

Check out Robert Reich's movie, "Inequality for all". It's pretty revealing and damning of the situation. Unfortunately the movie doesn't touch the banking system at all.

Perhaps we'll need another massive crisis to instigate real change. I have faith we'll get the crisis if we don't get the needed change.

Did you notice, back in 2008, both presidential candidates ran on platforms calling for change? And then we saw trillions of dollars pumped into the system to keep it going?

~ S

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Photo of David

Thanks for the thoughtful feedback, Steve.

In terms of stability, I think that a carbon tax might be more useful than a wealth tax.

Re: The move to part-time jobs: Yes, that's a big problem in and of itself.

Re: Robert Reich: He was part of my inspiration for this idea:
https://openideo.com/challenge/youth-employment-pathways/research/raise-minimum-wage-and-help-noy-hurt-employment

Re: Crisis: Unfortunately, our response to economic crisis has been a doubling down on the problem: Greater consolidation, less competition, fewer jobs, more money for the top one percent and overall greater income inequality. The Occupy movement tried to change that but sadly not enough people care, or realize they should care, and collectively we vote against our own economic interests. Time and again we fail to understand how tax breaks for the richest hurt the rest of society.