Tuesday, April 19, 2005

Wealth Ratio

Mikaela says:
I've been hearing little snippets here and there about instituting a wealth ratio. How cool would it be to have a cap on how much a CEO could earn over a worker? I'm not so radical that I believe everyone in the company should make the same amount. There's something to be said for the idea people (gulp, I originally wrote "men" -- yikes, gotta watch every second!). But I do think something must be done to curb the ever-increasing squeeze on worker salaries, when management still needs to make their exorbitant profit.

Profit-sharing is one way, but I don't hold much stock (pardon the capitalist pun!) in the goodness of management's heart or proclivity to share. A federal cap on the ratio of salaries that ties workers to managment's desire for more takehome? Yeah, that's a good idea!

Many small companies, such as this food distributor (a great website! check out all their progressive innovations!) have declared a 4:1 ratio, so the CEO can only make 4 times what the lowest-paid worker makes (which happens to be twice California's minimum wage). That way, if the CEO wants to make more (and really, who doesn't want to make more?) they will find ways, but instead of reducing worker salaries to increase profit, whatever they do will have to increase worker salaries, too. That's the way to ensure the incentive!

Think what the implications of this would be on the Wal-Marts (where the ratio is in the neighborhood of 450:1) and the Wall Street darlings!

It's still capitalism, and Marjorie and I can have a good long debate about that one, but it's reigned in and humanized.

I think it's doable!

Congress?