I have some questions that concern kengineer's post on Max/Min wage.

[Solon]

To those who oppose his ideas (not that I agree 100% but...), I have some questions, but first, some stats:

Salaries and benefits of corporate CEOs as a multiple of the average
factory worker's

1980 30 times
1991 130-140
1996 187


The Loss of Tax Progressivity
Effective Family Federal Tax Rate (Income and FICA)

Year Median Millionaire or Top 1%
---------------------------------------
1948 5.3% 76.9%
1955 9.1 85.5
1960 12.4 85.5
1965 11.6 66.9
1970 16.1 68.6
1975 20.0 --
1977 -- 35.5
1980 23.7 31.7
1985 24.4 24.9
1989 24.4 26.7

And finally...
Average Hourly Wages (Total private industry, 1982 dollars)

1978 8.40
1979 8.17
1980 7.78
1981 7.69
1982 7.68
1983 7.79
1984 7.80
1985 7.77
1986 7.81
1987 7.73
1988 7.69
1989 7.64
1990 7.52
1991 7.45
1992 7.41
1993 7.39
1994 7.40
1995 7.40
Source: http://home.att.net/~Resurgence/L-corporatewelfare.htm
references are listed at the website above.

Now to the questions: Do any of you who oppose kengineer's idea out of hand honestly believe that CEO's actually work 300+% harder than they did 30 years ago? Also, how do you justify the devaluation of average wages? Final question is, what is the solution?

[TreasonousBastard]

1. I'm reading from the top down....

so I haven't gotten to the original thread yet.

However, CEO salaries are not based on "how hard they work," but on the value they bring to the enterprise. The same goes of everyone else's salary. In theory, anyway.

Having said that, most of these guys don't bring all that much to the table. There seems to be little value in putting out an honest product at an honest price and taking care of your vendors, employees, and customers. The value they pretend to add is largely based on schemes to boost the stock price by acquisitions and financial tricks.

Note that in most cases, acquisitions and leveraged buyouts actually lost money for the companies involved.

It's the people in the middle who make things run smoothly, and not the guys at the top. The rare guy at the top who actually knows what the company makes or does, seems to make less money than the finaglers.

I don't have an easy solution.

Note also that few companies outside of the US pay as outlandishly as ours do.

[Solon]

3. I know this, but the CEO Salary Explosion is...

to say the least, mind-boggling. I can understand some startup company and its investor(s) keeping what is earned with no caps, for they take risk. I just wonder what type of risk that a CEO makes to justify their outlandish salaries. They demand so much money that their is no possible way, without buying countries outright, that they could spend it in a century or three. Are such people actually that more valuable than the average person? I think not.

[AP]

6. Explosion of CEO salaries isn't unexplainable thing that happened.

It was the deliberate result of calculated legislation and tax policy.

See my post below listing some of the legislative things that can be done to address it.

[AP]

2. The inequity of CEO vs avg e/ee wages isn't due to absense of max wage

It's because we have a society set up through legislation to reward people who are rich, and which forces people who labor for a living to create the, most of which is then shifted up the scale to the already rich.

You don't need a cap on wages to solve that problem. You need to expense stock options, force companies to disclose pension costs, eliminate tax breaks which give companies tax deductions on high executive pay, you need to pass a CEO right to know law. You also need to give shareholders more rights and more control over electing board members, and you need to end "golden getaways' and pension-based tax abuses. Get it? (Oh, and if there were no states with unlimited homestead exemptions, that would probably help a little too.)

I can't believe that on labor day weekend we're talking about capping wages. WAGES. We should be talking about legislating a system which puts no limits on the amount you can be rewarded if you're willing to work hard to create value for yourself and society, on a level playing field on which everyone has an equal opportunity to participate.

[Solon]

4. I agree to a point...

I don't agree 100% with kengineer, an outright cap on salaries isn't going to solve the problem, however perhaps a progressive tax is needed to allieviate it. What I don't understand is the idea that progressive taxes are somehow a "penalty" to the rich. It is NOT, who benefits more from the government, the CEO with the millions created due to the policies of government, or the minimum wage worker who uses less than 1% of those benefits for their pittance.

[AP]

5. Progressive taxation is the best way to equalize the burden of taxation

There is no reason in the world why being richer should give you a competitive advantage by having a lower tax burden.

Wealth can give you other legitimate advantages over less wealthy corporations (or over poorer individuals), but it's outrageous that the government would create a situation (INTENTIONALLY) through a tax structure which makes it harder for poor people and small businesses to get ahead because it forces them to bear a bigger tax burden.

It's outrageous that someone would have to work ten times or 100 times harder to pay their tax bill than someone ten times or 100 times wealthier.

[Solon]

7. We are of the same mind there...

I know that the explosion in salaries was delibrate on the part of the Reagan/Bush administrations, but I can't believe people, to this day, would defend it. Particularly from the Middle and Lower Classes. My biggest concern is this, how long will the people of this nation tolerate this "Robber Baron" economy. I fear that unless something is done soon, then, as what happens the world over, the have-nots will, violently, attack the haves. Then where will we be?