Wednesday, July 30, 2014

Switzerland Proposes A Maximum Wage In Lockstep With Its Minimum Wage

"What's The Right Ratio For CEO-To-Worker Pay?"


If a minimum wage, why not a maximum one, too? "Increasing shareholder power may only have a small effect on the problem. So why not consider a maximum wage? One possibility is to cap top pay as some multiple of the lowest paid, as a recent Swiss referendum proposed. That referendum was quite draconian, suggesting a multiple of 12, yet it received a large measure of popular support....The Swiss did vote to ban 'golden hellos and goodbyes'. One neat idea is to link the maximum wage to the minimum wage, which would give CEOs an incentive to argue for higher minimum wages! Note that these proposals would have no disincentive effect on the self-employed entrepreneur."Simon Wren-Lewis.

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