We haven't had an ideological debate for a while

Government enforced salary cap on everyone to limit salaries so that it doesn't exceed 20 times the salary (hourly rate) of the lowest paid earner in the country.

Should we have it? Discuss.

Are you thinking of salaries in the public sector or both? Because the private sector will find ways to circumvent this.

Yeah that's true, and if you don't implement it worldwide you'll end up with a "brain-drain" and a lot of capable workmen going to work abroad.
I don't see it happen.

Just think of salaries in some sports, salaries for the CEO in big companies etc.

There's talk in belgium of putting a salary cap on those salaries, not sure how it's calculated though. I should look that up.

(maybe 1:20 is a good cap, can you add some numbers to it? not sure what the lowest paid earner earns)

I'm a firm believer of a persons right to earn based on their investment. And if their effort manifests in a form that attracts money and attention ie facebook, then they should earn whatever the market is willing to pay for it. I do not believe in forced equalization at the expense of smart and inventive people.

I don't think salary caps are a good idea. Ultimately it's just capitalism... salaries will be what the market will bear. CEOs and whatnot tend to make stupid amounts of money, but these are typically publicly held companies. If their salaries get too out of control, the major stock holders will throw a fit and that'll be the end of that.

As for government jobs, that's a different story. I'm not sure how you'd implement it, but government's definitely not capitalism. Some sort of capping system would be a good idea, I think, but it would depend on how it's implemented.

I would say this is for all public AND private sectors.

As for the risk that the cap would scare away top-talent, I think that's arguable on 2 accounts. Firstly, are they REALLY that much of a genius that someone else in the country could not do their job just as effectively? Even at the maximum 1:20 cap limit? Secondly, if someone feels the need that earning beyond the 1:20 cap is driving them to want to live elsewhere, in search of fortunes that exceed this, I would say fair enough. This is not a person that is morally aligned to where I think we need to be in the future. Do we really feel that millionaires and massive disparity of wealth will still exist in 20, 50, 100 years? We will wake up at some point.

As for numbers... let's say the lowest paid full time job is £15,000 p/a (£7.79 per hour). Multiplied by 20, that makes £300,000 p/a (£155.92 per hour). We're probably talking 37 hours a week of toilet cleaning, vs 37 hours of managing a business.

I understand the capitalist argument. The system has a working system of check of its own. I question the effectiveness of this system of check. We already know totally free capitalism doesn't work, because the companies can abuse the system and the people in turn. We also know that pure communism doesn't work either, because people lose their free will and suffer from oppression. I think soon (a few generations) we will become tired (and possibly angry) of the envy we feel for excessively wealthy people thanks to their privileged upbringing, or fortune.

If your mission in life is to be rich, you have already failed because being rich is undefinable. But you can always define how much you would want to make in a month to be ok with. And therefore you can plan the steps to reach it. The problem with most people is that they are not willing to make the sacrifice it takes to boost yourself forward. If one has a background of "challenged income" (read 'poor' if you want but thats different depending where you live) and wants to make more money they usually have to make decisions they might regret later but is usually not the case. For instance one might have to give up living alone in a flat in order to cut costs to save money for school, hence a sacrifice towards a better paying job. Satis here gave up some free time, if i recall right, to take some classes and boost his income. I'm sure he is not poor but still he had to give some to get some. Most people just drone on in their shitty jobs and will not take that step, will not break out of their cube to make a change.

Envy or not, this is not something to be fixed by hanging rich people. The biggest flaw is to think that people are equal. There will always be rich, middle class and poor. Look at Russia, they offed a large part of their cultural elite and effectively sabotaged their own country, thinking they can be equal. They cant, nor will ever be.

You want to make more money? Never stop looking for a better job. You are not who you work as, you are not an accountant, administrator or whatever. You are a human being, you can do whatever the fuck you set your mind at, its just a question of how to get there. Start looking for a better job, look at the requirements, get educated, join non-profit organisations, join i don't know voluntary firefighting, voluntary home guard, whatever builds you and your character and take positions inside these organisations even if they dont pay. Don't wait for the government to fix this for you, they only care about themselves, as is the person working next to you.

If the only thing you aspire for is money, you will always be poor. And don't focus on the rich vs poor stuff, its so far out of your hand you might as well live on a different planet. Focus on Derf, what can Derf do to have a better Derf future. The rich vs poor stuff is on the same list with problems like who rules the world etc. That shit is so far out our league theres nothing, not a damn thing, we can do about it.

Oh and cleaners, they make more money than you think. They make cashiers in super markets look like homeless beggars. They usually have more than one place they work at and have good working hours and nobody is constantly monitoring them with a stop watch in order to sack them.

All good points. I think that sacrificing in order to better your income, as you suggest, is a natural and normal thing to do. However, I have no interest in becoming rich. It's not my aim. I would surely like a better income than what I have right now, but that is by no way "rich". I am happy to achieve this by sacrificing, but I can't help wondering how much easier (read: fairer) it would be if such disparity of wealth was deemed to be unfair, and theoretically removed. Of course we're not equal, but are we so unequal that some folks earn more than 20 times than us? I'm struggling to find a good argument for that disparity, unless you can help me out.

Responsibility for one. Not sure if it always justifies that large a gap. On my patrol vessel I used to think that the navigation officer duty was unfairly simple and the people doing it had way too little extra activities until the day I had to do it myself. Couldn't wait for the shift to end. But there are not a lot of people on my ship that have the necessary prerequisites for the job and hence the demand is high and supply is low. The fear of losing the few who have competency is in my opinion that which drives up the price and perks. And I think in private sector, where the competition for survival rages at its fullest, the supply for true competency is so tiny that salary costs go up to attract the best. But in government jobs, I don't know, at least here it's a damn mess. People make ridiculous amount of money for sitting on their asses and talking crap on tv/radio.

But the navigation officer surely wasn't paid 20 times more than the other folks. Responsibility does indeed justify a higher pay, that's quite logical. My CEO earns maybe £500k a year. His responsibility is to drive the direction of a company worth around £5bn employing around 6000 people. He has a board of directors beneath him, which keep him in check, so I would argue that:

a) His responsibility is well supported.
b) There are clear candidates for his replacement at any one time from the board.

I'm not sure his "true competency" is worth that much, so responsibility doesn't seem to play a big part at all in determining the salary of anyone currently beyond the 1:20 ratio.

I mean that pretty much sums it up. You bring everything down to your understanding level without even considering that there is more to it than what is apparent at your paygrade level. For instance true competency doesn't just mean knowing how to compile a budget or other managerial skills it also encompasses skills of politics, manipulation, administration and more. It takes skills you will never deploy as a specialist or some random employee.

But i guess you have to have been there to truly understand this. And the changing of the top dog is usually the last resort because it brings about such a shift in developed powerspheres that can send the company spiraling into chaos or unbelievable success. Just look what happens when countries get new presidents/prime ministers (depending on the type of democracy).

Just having similar CV's doesn't mean the other board members are fitting replacements. Lots of big companies do not promote within, they bring someone from the outside.

Well, I can only address the arguments you present. You mentioned responsibility, but it doesn't seem to be the case that they have this massive weight on their shoulders, given the support of the board and middle-management. Heck, they even have consultants on-tap if they want.

Now you mention there are other skills at play. Politics and manipulation. What exactly are these elusive skills precisely?

If I knew that answer, I'd be one rich and bad ass famous Peltz. There are probably tens of thousands of books asking exactly the same question. Some believe its charisma, some believe its presence factor, some believe it to be something else. Whatever it is, stock owners are willing to pay ridiculous amounts of money for it.

Just so we are on the same page here, we are talking about the things that allow top managers to earn the money they do. I stated that one factor which would support "no cap" is the responsibility. The more people the company affects the higher the responsibility since large companies (for instance Nokia in Finland) and their business results can affect pensions and other social securities. Hence stock owners are motivated to pay large amounts of money for skills leading these behemoths (our discussion) and for the simple reason the top dog, who has access to all business secrets, is not simply bought out of the company.

Essentially it comes down to this simple picture. While it appears self explanatory in reality it is not. You can ask infinite number of questions about this picture.

So, thusfar i've come up with three: responsibility, true competency at running large companies, and access to company secrets.

On the matter of company secrets, I came across this piece of information.



How about that for loyalty. I bet they weren't working for minimum wage and yet they still walked away. The perks they got from Volkswagen must've been enormous.