From the Outer Limits of Debate Shaped by the Corporate Media: Maximum Wage Laws

Aldous Slack

Aldous Slack

Aldous Slack is a pseudonym for a paranoid, anxious, musician, occultist, and traveling part-time writer. He likes sufi poetry and most gardens of earthly delight.
Aldous Slack

The idea of a maximum wage is alien to most people. And just like with aliens, maybe the truth is out there but the lies are definitely right here at home. I remember when I first came across the concept, it was being promoted by a Buddhist monk from California. Fittingly enough I had a moment of social satori when the idea hit me. It had never occurred to me you could just illegalize extreme greed. I suddenly saw the ratio of worker compensation to owner compensation as the prime metric for gauging the inequalities of our economic system. CEO pay is still Jimi Hendrix level high, and the bastards have been working their paper magick to lower corporate tax rates with some saying that some of that money may trickle down to the middle class workers *coughs*bullshit. Seeing as corporate media usually won’t touch this topic without insulated gloves and only after making it completely sterile, here’s a brief outline of some of the basic ideas around a maximum wage cap.

First off, a maximum wage cap can take many forms. The two most popular and probably most effective are creating a 100% tax rate at a certain level of earnings like a tax ceiling, or creating a law where the highest paid person in a company or nation can only make a set ratio more than the lowest paid employee or a set ratio more than the minimum wage. Some people support an amalgamation of these two where everything earned past the upper ratio is taxed away. These ratios have been suggested anywhere from a 1:4 all the way up to 1:100 or higher. According to the Economic Policy Institute our current system averages about 1:260 and has averaged over 200 since 2010. There is also debate as to whether the ratio for income should be done company to company or set as a national standard. I am not necessarily supporting one over the other, I’m just trying to inject good fringe ideas into the collective dialog.

Labor journalist Sam Pizzigati has been writing about this for years and in his book Greed and Good: Understanding the Inequality that Limits our Lives, he offers some support for a 1:10 saying, “before inequality in the United States started exploding in the 1980s, this same ten times ratio defined income distribution patterns in nearly every major American workplace, as Yale law professor Boris Bittker pointed out in 1977. Noted Bittker: “In virtually all institutions of our society — the universities with which we are especially familiar, the federal civil service, and business organizations save at the very top — the salary scale from bottom to top is confined to a ratio of 1 to 10 or thereabouts.”” He also points out taxing categorization would be easy-peasy because you would tax people at the same ratio you use to set the maximum and minimum wage.

Pizzigati in a more recent piece has pointed out when CEO’s can make so much money they are liable to engage in business practices that make large profits for them but do little to nothing for the company. He argues there, CEO’s don’t want to invest in new research or production because, “years can go by before any of these investments bear fruit. By that time, the executives who made the original investments might not even be around. Grand fortunes, by contrast, can come quick. CEOs can do a downsizing here, cut a merger deal there, then sit back and watch short-term quarterly earnings — and the value of their personal stock options — soar.”

With a pay cap all of these tricks to boost stocks become impotent. If the CEO wants to make more money he has to raise the minimum wage of his employees or possibly the national minimum or it all goes to taxes. This Ted Turner nightmare has its obvious socialist charms, so then why haven’t any of my friends or family ever heard of this concept. Well, the obvious answer is biased reporting, controlled by corporate media outlets, owned by people who would see much of their own earnings literally decimated by maximum wage caps. Is that a conspiracy theory? No way. Slave owners never taught their slaves how to escape. Remember it’s not just the lies that shape public opinion, it’s also the truths they neglect to mention.

Historically, in 1942 Roosevelt suggested a maximum wage of $25,000 a year. That’s a little under $400,000 by today’s standards. He was justifying it with the cost of war and it didn’t pass but shortly after he did implement The Revenue Act of 1942 which established an 88% marginal tax rate on income over $200,000. That’s as close as we’ve come to a maximum wage in this country, though Bernie Sanders was a supporter of a maximum wage at least until somewhere in the 90’s when he seemed to switch to supporting a tax rate between 50 and 90 percent for the wealthiest people. British politician James Corbyn recently proposed a maximum wage, only to scale it back and water it down shortly after. I myself don’t dig taxes much, since the largest piece of the pie goes to the war machine, so remember the maximum wage could be set to have the excess go towards raising the minimum wage to raise the standard of living for everyone, since of course, if the lowest earner made more everyone else could then earn more as dictated by the set ratio.

The general idea here is to spread the wealth, and avoid all the catastrophic problems that come with our current system of economics. Some also hope that with a redistribution of wealth from the top, the lower classes could then afford things like healthcare, food, housing, education, anything fun, and basically everything else that makes life bearable. The obvious draw here is that a law like this would immediately stop the widening income inequality gap, and make rich ass holes feel more human.

Now for the naysayers. I know, some of you are thinking this could never work. No-one with wealth and power will support laws that take those very things away. Well, you may have a point, but to return to the words of Sam Pizzigati in his book The Rich Don’t Always Win, “Two-thirds of Americans believe that the nation’s enormous wealth ought to be “distributed more evenly.” But almost as many Americans—well over half—feel that protests against inequality will ultimately have “little impact.” The rich, millions of us believe, always get their way. Except they don’t. A century ago, the United States hosted a super-rich even more domineering than ours today. Yet fifty years later, that super-rich had almost entirely disappeared. Their majestic mansions and estates had become museums and college campuses, and America had become a vibrant, mass middle class nation, the first and finest the world had ever seen.” If wage caps were promoted on TV half as much as Trump was during the election we would have white class warriors ready to battle in the streets for fair pay. The only solution to our profit driven ‘information’ saturated society; we’ve got to start brainwashing ourselves with better ideas.