Should there be a salary cap?

[MysticSang'ha]

I agree that workers should be paid more, but how many raises could you afford if you cut down the CEO's salary. Let's say that you're hiring someone at minimum wage which right now is 7.25. Let's say that you could double it so that minimum wage is 14.50 and assuming a 40 hour work week and 50 weeks/year you come to $29,000 a year. The salary of a CEO is about 10 million a year. For that kind of money you could hire hundreds of new workers.

You could, but the labor market isn't that simple. We have to consider what exactly the people in these positions would be doing.

I pay my staff very well in my business. In fact, even though we're just now entering our second year of business, our employees have some of the highest wages in the area. But they also have more job duties than similar positions in businesses who are my direct competitors.

We have hired new staff members, but not just because we can afford it, but because the growth of the business demands it. I can only do so much as the owner and working 12-14 hour days, and with more work on my plate in the expansion, I need to delegate more work out to others. Therefore, new positions - specifically in sales and marketing - have been created to accommodate the growth.

If the business grows even more, I would rather re-invest back into the business, ensure those who are shareholders are making a return on their investments, and give bonuses and/or pay raises to staff members who were partly responsible for the businesses growth. I prefer to give credit where credit is due, and I'm not sure how hiring somebody at a minimum wage - or ANY wage just because I can - is good for the business.

Hiring employees just because of extra money around, IMO, is poor planning. These employees may hurt the business because of their actions if they were not hired because of the actual needs of the business. Potentially, the business can go bankrupt as a result of these decision. And then, every employee would be out of a job and must seek work elsewhere.

 

[Falvlun]

I agree that workers should be paid more, but how many raises could you afford if you cut down the CEO's salary. Let's say that you're hiring someone at minimum wage which right now is 7.25. Let's say that you could double it so that minimum wage is 14.50 and assuming a 40 hour work week and 50 weeks/year you come to $29,000 a year. The salary of a CEO is about 10 million a year. For that kind of money you could hire hundreds of new workers.

And you could still pay the CEO a million or two to compensate for the harder work he does, or the greater risks he must take. I would think that a million dollars a year vs $29,000 would still be a motivating factor to encourage people to be CEOs.

 

[Reverend Rick]

Then they should get scholarships like the rest of us hardworking talented people who earn our way through college.

My child being blessed to have a father and mother who can pay her expenses should use a scholarship that some other student could use that does not have parents that can foot the bills is your answer?

There are only so many scholarships out there and they should go to the less advantaged students.

You want to talk about hard working, my daughter is that and more. I am proud she inherited my work ethic. :yes:

 

[Falvlun]

My child being blessed to have a father and mother who can pay her expenses should use a scholarship that some other student could use that does not have parents that can foot the bills is your answer?

There are only so many scholarships out there and they should go to the less advantaged students.

You want to talk about hard working, my daughter is that and more. I am proud she inherited my work ethic. :yes:

I think it is strange. I have read many of your posts talking about the struggles of the rich to provide support for their families. But then I also read your posts maligning and disparaging the struggles of poor people.

When someone says that a poor person is struggling to make rent, you respond with "When I was a kid, we didn't have a tv till I was 17 and I walked to school barefoot!" to show that the poor people are being frivolous with their money.

But when someone says that you should be able to get by with $100,000, suddenly your story becomes how hard in life they have it.

It just doesn't add up.

My parents didn't help me with college. They provided moral support and a home to come home to on weekends and breaks and even paid for books a semester or two. But I was responsible for tuition.

Guess what? I made it through college.

And I can guarantee you that the kid whose parents make $100,000 are going to be able to make through college too if they work hard and are saavy.... all the things that you think poor people should be and condemn when they aren't.

 

[Reverend Rick]

I think it is strange. I have read many of your posts talking about the struggles of the rich to provide support for their families. But then I also read your posts maligning and disparaging the struggles of poor people.

When someone says that a poor person is struggling to make rent, you respond with "When I was a kid, we didn't have a tv till I was 17 and I walked to school barefoot!" to show that the poor people are being frivolous with their money.

But when someone says that you should be able to get by with $100,000, suddenly your story becomes how hard in life they have it.

It just doesn't add up.

My parents didn't help me with college. They provided moral support and a home to come home to on weekends and breaks and even paid for books a semester or two. But I was responsible for tuition.

Guess what? I made it through college.

And I can guarantee you that the kid whose parents make $100,000 are going to be able to make through college too if they work hard and are saavy.... all the things that you think poor people should be and condemn when they aren't.

I really think you misunderstand me. I work countless hours each week helping the poor. More so now that I have retired.

Yes, I pay my Daughter's tuition and books and yes I gave her a car which is 10 years old now and will not be replaced till I see a four year degree.

She works and pays her apartment, clothes and food. For her to go another semester, all I require is to see her grades.

Just what have I done so wrong here?

 

[dust1n]

Salary caps should only be placed in large public and private institutions and the caps of salaries should be limited to a ratio of the lowest paid workers or subcontractors in its entire structure.

 

[Revoltingest]

Salary caps should only be placed in large public and private institutions and the caps of salaries should be limited to a ratio of the lowest paid workers or subcontractors in its entire structure.

I prefer a cap on the lower level jobs. If those workers lack the gumption to get a promotion, then punish'm!
This will leave more money for us upper echelon types, & give those low slackers some real incentive to advance.

 

[Ouroboros]

Do you think there should be a salary cap or savings cap? By which I mean, if a person makes more than X dollars a year gross income, he pays everything in excess of X to the government as taxes.

In Economics they tend to argue against caps of any kind. I've seen arguments made from curves and mathematics that caps will push supply-demand curves in unfavorable directions. Or put it this way, it might sound great to have a cap, but you'll have other effects that will screw the economy over. For instance, eventually, everyone will reach the cap (through salary increases), and there won't be any incentive to work at a more dangerous job compared to a simple and safe job. Or no one would go to school and become doctors (takes 10 years or more, and a lot of money), have debts, and not make any more money than Joe-Blow starting his first job at MacDonald's.

If so, what should it be?

I would say that $100,000 is enough for the average person but allowances should be made for certain situations, such as medical expenses (since we don't have universal healthcare).

It's not enough in some areas, and it's extremely high in other areas. And it's not enough if you have kids, so you would have to make allowances there too. Would prices on products also be controlled and regulated? They must be or the cost of living could increase faster than the cap.

Personally I am not only for a salary cap, I am also for a net-worth cap. You simply don't need millions and millions of dollars lying around the house when you couldn't possibly spend it all; you don't need a private jet and a private yacht and a 40-room mansion for you, your wife, and two kids.

Granted that some have a lot more than others, but salary cap won't affect wealth. Most wealthy people don't make their wealth on salary because of the taxes. Most wealth is built upon investing.

 

[jonman122]

This is only partially on-topic but it blew my mind how the government would pay car companies 25 billion dollars as a bailout, when they could have given every single family in America $50 000 as long as they signed a contract that said they would buy a car from so-and-so car company, and it would have cost them LESS on the whole. (doing this would have cost ~15 billion instead of the 24.9 billion they used for the bailout.) the car companies would have flourished, everyone would have had a new car, everyone SHOULD be happy. I never quite understood that, because instead the massive car companies just have even more cars sitting in lots being untouched because they're so expensive.

Bigger CEO pay for that year? I don't think a salary cap would be a good idea, but way more taxes on people making upwards of 2 million a year. With 2 million in a savings account, you could live off of the interest alone.

 

[Falvlun]

I really think you misunderstand me. I work countless hours each week helping the poor. More so now that I have retired.

Yes, I pay my Daughter's tuition and books and yes I gave her a car which is 10 years old now and will not be replaced till I see a four year degree.

She works and pays her apartment, clothes and food. For her to go another semester, all I require is to see her grades.

Just what have I done so wrong here?

I'm not talking about what you personally do. I am talking about your politics, and how you perceive and present the hardships of the poor vs the rich.

You say we should pity the family who makes $100,000 because it's not enough to pay college tuition, but that we should tell the family that makes $15,000 and struggling to make rent that it's because they are being frivolous with their money. There's some sort of political cognitive dissonance going on here.

 

[dawny0826]

Do you think there should be a salary cap or savings cap? By which I mean, if a person makes more than X dollars a year gross income, he pays everything in excess of X to the government as taxes.

Neither. I think that our nation relies far too much on our government and our government spends far too much money. There are a small percentage of Americans that comprise that which carries our nation in wealth.

We give these people and our government far too much power.

Every American deserves the opportunity to be successful. I say to hell with anyone who tries to cap your dream for independent success (figurately, of course).

This doesn't translate to being a horrible, uncaring person. Quite the opposite, i believe in investing LESS in your government and as much as you can in your own community.

Personally I am not only for a salary cap, I am also for a net-worth cap. You simply don't need millions and millions of dollars lying around the house when you couldn't possibly spend it all; you don't need a private jet and a private yacht and a 40-room mansion for you, your wife, and two kids.

I think this is a sad shame and drips of bitterness. It's this attitude that continues to perpetuate the asinine cycle of dependency that Americans have on our government.

There isn't anything wrong with striving for that type of success for yourself and your family. We've just set ourselves up to where it's such an unattainable type of success and we're so unnecessarily bitter against ANYONE who has that type of success, assuming that anyone who has it is part of that small percentage of douche bags who abuse wealth and power.

 

[Shadow Wolf]

I agree that workers should be paid more, but how many raises could you afford if you cut down the CEO's salary. Let's say that you're hiring someone at minimum wage which right now is 7.25. Let's say that you could double it so that minimum wage is 14.50 and assuming a 40 hour work week and 50 weeks/year you come to $29,000 a year. The salary of a CEO is about 10 million a year. For that kind of money you could hire hundreds of new workers.

The problem with hiring without the actual need is labor becomes an issue, and each worker will be forced to work less hours. McDonald's, for instance, each individual store is only allowed a certain number of hours to use when scheduling, and these hours must be divided among the entire roster. If a McDonald's were to suddenly hire 20, or even just 10 extra people, without actually needing them, then the workers who are already on the roster will have less hours to work each week. And if minimum wage were to jump that high, labor rates would become very high very quickly which would cut down the amount of available hours the store can give to it's employees. So really, a sudden mass hiring and sudden doubling of minimum wage, without an actual need for it, would be devastating to the economy. There would also be the issue of mass inflation if that much money were to suddenly go around.
For a capitalistic society to thrive, you need a rich class. You also must have a strong middle class. You don't need a super rich class, but someone does need to have the money to invest, to buy, to open shop, and so on. You also need workers to work the created jobs where the need is, which is why you need a strong middle class; they are the ones not only offering your goods and/or services, they are also the ones buying them. Under ideal circumstances it would be a smooth running machine with each gear turning one another in harmony. But what we have today is a class of but only a few who have rigged the system to funnel more and more money into their pockets, at the expense of everyone below them, which in a since is like putting a gear that is far too large into the machine and the damage it inevitable caused it was simply too big for the rest of society to function in a prosperous and proper manner.

 

[dust1n]

I prefer a cap on the lower level jobs. If those workers lack the gumption to get a promotion, then punish'm!
This will leave more money for us upper echelon types, & give those low slackers some real incentive to advance.

We've had it your way for far too long. Time for my idea to have a shot.

 

[Reverend Rick]

We've had it your way for far too long. Time for my idea to have a shot.

Be careful what you wish for, you just might get it.

 

[Shadow Wolf]

We've had it your way for far too long. Time for my idea to have a shot.

From what I've seen *** kissing is what it really takes to get ahead at minimum wage jobs. Hard work and trying hard has done nothing for me except to add on to life's frustrations because it's a fact the best candidate does not always get the job.

 

[Reverend Rick]

From what I've seen *** kissing is what it really takes to get ahead at minimum wage jobs. Hard work and trying hard has done nothing for me except to add on to life's frustrations because it's a fact the best candidate does not always get the job.

The one thing you can depend on is life is not going to be fair. :no:

 

[Revoltingest]

From what I've seen *** kissing is what it really takes to get ahead at minimum wage jobs. Hard work and trying hard has done nothing for me except to add on to life's frustrations because it's a fact the best candidate does not always get the job.

Past is not always prologue.
Hard work, & more importantly smart work, got me ahead.
The best candidate generally does better than the others, but life ain't got no guarantees but death & taxes.

 

[Alceste]

I'm not talking about what you personally do. I am talking about your politics, and how you perceive and present the hardships of the poor vs the rich.

You say we should pity the family who makes $100,000 because it's not enough to pay college tuition, but that we should tell the family that makes $15,000 and struggling to make rent that it's because they are being frivolous with their money. There's some sort of political cognitive dissonance going on here.

Haven't you heard? Only the rich are decent

 

[Alceste]

Do you think there should be a salary cap or savings cap? By which I mean, if a person makes more than X dollars a year gross income, he pays everything in excess of X to the government as taxes.

If so, what should it be?

I would say that $100,000 is enough for the average person but allowances should be made for certain situations, such as medical expenses (since we don't have universal healthcare).

Personally I am not only for a salary cap, I am also for a net-worth cap. You simply don't need millions and millions of dollars lying around the house when you couldn't possibly spend it all; you don't need a private jet and a private yacht and a 40-room mansion for you, your wife, and two kids.

I am happy with progressive tax rates with a high top margin (50-60% on income over $100,000 or so). Having a healthy budget and adequate funding for a strong social safety net and high education standards should be enough to level the playing field and give everybody a chance to succeed. Scandinavian countries have struck the right balance, imo.

Personally I look forward to the day I bust into a higher tax bracket, since it means I'll be making more money.

 

[Shermana]

In the 1940s, and to a lesser degree until the 1970s, almost all income over the equivalent of $2.5 million in 2013 dollars was taxed at nearly 100%, the closest thing to a "salary cap" America has had. However, one was able to invest the extra money beyond that in domestic industry and assets to keep the economy moving, and this most likely had a huge effect in getting the nation out of its massive debt-to-GDP ratio and gave incentive to pay workers well and spur national investment in local businesses. Perhaps a similar measure could work well today. It would definitely discourage money hoarding for one thing. However, crackdowns on Offshore accounts would have to be stepped up.