How about a maximum wage?
I just had a friend send me this super-interesting graph that appeared in the NY Times, showing the average salary of a company executive compared to the average worker in the United States, and how this ratio has changed over time. Unbelievable. In 1940 half of executives earned more than 56 times the average worker’s pay. In 2004 half of executives earned 104 times the average worker’s pay. It doesn’t take much to realise that there is something very wrong here.
It seems that Europe is starting to take obscene CEO salaries, bonuses and golden handshakes seriously. People are getting really mad about the situation, and there are moves afoot to put legal limitations on pay-outs, with the Netherlands leading the way.
Although the disparity between the incomes of CEOs and the average working in New Zealand is less obscene than that in many countries, it’s still ludicrous, and the gap in increasing at a pretty alarming rate. In 2000, the average CEO earned 8 times the average wage. Today, just 8 years later the average CEO earns 19 times the average wage. Over half the total net worth of our nation is owned by the top 10 percent wealthiest people. The bottom 50 percent of the population owns just 5 percent of total net worth.
What could we do about this? A maximum wage? Indexing of the lowest paid worker of a company to the highest paid worker, so that every time the CEO gets a pay rise, the company’s entire workforce sees a parallel rise? I don’t really know the answer but we should be getting really mad about injustices like this. At the moment there’s not even any significant acknowledgement that this is a problem.
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