I would like a law

[lynxreign]

It is a simple law.

No employee of any company at any level can make more than 100 times the lowest paid employee of that company.

You're paying someone $20,000 a year, then you can make 2 million a year. Want a raise? You have to raise the salaries of the lowest paid employees.

Now, tell me why you don't like my law.

Comments

[editswlonghair.livejournal.com]

Another big problem w/r/t unhinged CEO compensation are incestuous boards of directors, glad-handing each other's companies and enable such greed. Boards also need to be more transparent and accountable to shareholders and employees, not just the CEOs and upper management.

And, of course, institutional investors play a big role in this complicity, when fund managers turn a blind eye to corporate mismanagement because they are either more concerned with short-term profits over long-term viability; or they are complicit, getting their pay to play kickbacks and egregious bonuses for their hedge fund and credit default swap shenanegans which create paper wealth.

But I have to admit, the libertarian in me does not like such overt legislating of capitalism in this way (for many of the reasons already outlined). Oversight and regulation for health, safety, and environmental reasons are one thing-- but ultimately I think market forces should (and will) decide economic concerns such as price and remuneration... Hell, as much as I hate seeing the de-industrialization of our country, I don't know if such cost of manufacturing concerns should be legislated either.

I hope (and really do believe) that the out of control executive wage and bonus inflation of the past couple of decades is coming to an end because of this depression... shareholders who've seen such huge losses are hopefully not going to stand for continuing the $20m salaries and $100m golden parachutes anymore. But, just like the cycle of business, this social responsibility is a cycle too... soon enough, I'm sure we'll have another gilded age in the mid-21st century once memories fade and future Republican admins and congresses loosen whatever 'Newer Deal' regs get put into place during this mishigas...

[lynxreign.livejournal.com]

I think market forces should (and will) decide economic concerns such as price and remuneration

But they don't today. We're witnessing how that part of the market has completely failed.

And I'm not saying this would be a panacea, just one part of the package. Other regulation is also needed. In addition to greater transparancy, etc, we need Single Payer Universal Healthcae. It'd save businesses and employees a fortune, making business more profitable immediately and making this plan more palatable.

We're witnessing how that part of the market has completely failed.

[chaoticmoth.livejournal.com]

A large part of what failed is how stocks function. If you want to put in a law that is going to legislate anything, why don't you regulate the prices of stocks? Make it so that stock prices are a direct reflection of reality and not based on emotion and wild speculation. If your company has X earnings, with Y profits your stock is priced at Z.

[lynxreign.livejournal.com]

Part of my plan indirectly does affect how stocks function. Currently stocks and CEO salaries are the primary focus of a company. The primary focus SHOULD be customers and employees. This redirects at least part of that. If CEOs are forced to choose between themselves and stockholders they'll pick themselves every time.

[chaoticmoth.livejournal.com]

But you still have wild speculation and business decisions made to influence stock price instead of the bottom lines for the business.

If you directly legislate stock prices being tied to the bottom line then people who want to increase the stock price have to focus on the business. No more fluctuations based on projections, no more company stock values dropping because they made a huge profit but came in below expectations, just a simple formula of "We did well, and our stock price shows it" and "We did poorly, and our stock price shows it".

[lynxreign.livejournal.com]

OK, so formulate your own law for that aspect of it. I don't think many business decisions would be made to influence stock price and only for that reason under this system.

[editswlonghair.livejournal.com]

But they don't today. We're witnessing how that part of the market has completely failed.

Yes... today. But these market forces have worked in the past, and they will once again in the future. It's the sturm und drang of capitalism, which is one of it's strengths. This meltdown is a 'market correction' writ large... after 20 some-odd years of deregulation, irrational bubbles and casino capitalism, I hope that pragmatism, common sense fundamentals, sanity-- and hopefully at least some modicum of social responsibility-- come back into vogue.

And in many ways it's a sea-change in social attitudes and norms that needs to happen to bring about these changes... somebody else said it elsewhere in this thread, and I agree with them: it's more about sociology than economics in a lot of ways... If this depression leads to anything worthwhile, it'll be a generation of thrifty savers and pragmatists, and a move away from Boomer (and Gen X and Y) rapacious consumerism and egoism.

Your beloved Spock said it best: "The needs of the many outweigh the needs of the few, or the one." ;)

...just don't apply that principle to civil liberties! :D

[lynxreign.livejournal.com]

But these market forces have worked in the past, and they will once again in the future.

Yes, once there is good regulation again.