What do you think about earnings?

[andrewducker]

[Poll #1817753]

Comments

[kerrypolka.livejournal.com]

Ha, so far this is the least controversial poll I've ever seen on your journal!

[laplor.livejournal.com]

As far as I'm concerned, everyone from CEOs to drug addicts deserves to make enough money to pay for a modest apartment and decent food.

Anything above that should be performance based and subject to a maximum cap. The maximum should be fairly high, but really some salaries are so obscene that that they cannot be justified by any performance.

Yeah, I'm a socialist.

[undeadbydawn.livejournal.com]

that isn't socialism, it's just sensible

[atreic.livejournal.com]

I wouldn't talk in terms of a maximum amount people are allowed to earn, but I am very sympathetic to the idea that there should be a maximum-wage-earnt-in-company to minimum-wage-earnt-in-company cap. Although how you stop people outsourcing all their cleaners etc / playing silly buggers is quite a hefty exercise for the reader.

[andrewducker]

Or, indeed, outsourcing their management to "Great Big Co Management Inc".

[autopope.livejournal.com]

"There should be a maximum amount that people are allowed to earn in a year" - NO.

In your enthusiasm to clamp down on executive pay you basically ignore the existence of the self-employed. Go back to the drawing board.

As for why I'm opposed to a cap -- consider for example a self-employed musician who manages to somehow achieve a once-in-a-lifetime #1 hit. Are you going to cap their income for that year, when it's around 30% of their lifetime income and their entire pension and is achieved after years of struggle and penury?

Yes, it's an extreme case. But those of us who are self-employed go through good years and bad years, and there's nobody around to carry us when things are bad. (Just try claiming social security benefits of any kind if you're self-employed!)

[andrewducker]

I don't have any enthusiasm to clamp down on executive pay.

And I absolutely agree that the self-employed (or those who own their companies) are not covered by this at all, which is a massive hole in any kind of maximum pay.

Just look at Mark Zuckerberg for a topical example.

[steer.livejournal.com]

This argument is commonly made in talk of pay caps: "What about a sportsman/artist/musician who does something brilliant once..." Well, what about them? What on earth makes a single year where you do something really great worth a lifetime of pay? Why does a self-employed musician *deserve* to be paid for a lifetime for a year of work? It seems utterly bizarre to me as an argument.

Why is the self-employed sportsman/artists/musician any more entitled than a scientist/banker/grocer to be paid for an entire lifetime for only a short period of effort?

I appreciate your point about "good years"/"bad years" but frankly all jobs have that. It's a bad year to be a public sector worker right now. You'd think I was a loony if I claimed "I've done such good research this year I should be paid for 40 years in case I don't do anything worthwhile again."

When musicians are being interviewed about how they're not making money for something they did 30 years ago... well, let's just say I'm not overwhelmed with sympathy.

[chess]

If you're self-employed, do _you_ earn that in that year, or does you-as-a-company earn that in that year?

I would be quite happy for the self-employed who have an uneven income stream to make a couple million in revenue for them-as-a-company one year and pay themselves the salary cap over a couple of years to take it out of the company again.

(Or they can re-invest the bit they can't take as salary in tools etc, just as companies with more than one employee do...)

There should totally be a maximum amount that a person can earn in a year as in a maximum amount they can acquire for general unrestricted spending, whether they've had lean years before that or not.

There are undoubtedly issues around unscrupulous financial types being 'self-employed consultants' and claiming a lot of stuff as 'company expenses' to top up their capped salary, but at least having to do that slows them down a bit, rather than them actually being able to take home over a million quid free and clear every single year...

[desperance.livejournal.com]

I think you mistyped.

"There should be a maximum amount that other people are allowed to earn in a year."

There. Fixed that for you.

[anton-p-nym.livejournal.com]

I am somewhat in favour of a maximum "share" of earnings someone is allowed to take home from a company (in the sense of, is a CEO really contributing 200x as much to the company as Joe Lunchpail?) but not of an absolute cap.

-- Steve thinks that somethings are indeed best left up to the market, even with the absurdities that sometimes arise.

[autopope.livejournal.com]

Make that a ratio of lowest-wage to highest-wage per hour worked within a company and I'll sign on.

In other words, say the ratio is 25x -- then if the lowest-paid employee is on $10/hour, the CEO can earn no more than $250/hour, unless they up the wage of the lowest-paid.

[danieldwilliam.livejournal.com]

I think any cap on pay would have to be per hour worked.

[undeadbydawn.livejournal.com]

why?

we already have a system where 'putting the hours in' gets you paid, even if you do nothing remotely useful during those hours.

I have literally been hit by a truck on the way to an emergency, life-saving call [as in I actually saved someone's life] and been paid exactly the same as I would for dropping by and drinking tea. I like to think the former was probably a more valuable use of my time. It actually ended up costing me, cos I had to get my bike repaired.

there's more to work than time served.

[danieldwilliam.livejournal.com]

I think policing maximum pay would be very difficult.

Share options would present a particular difficulty.

SEWIWEIC

[0olong.livejournal.com]

The culture of people in a position of power (specifically, in this instance, bargaining power) expecting to earn something close to the amount of money they make for a company is toxic, with a range of vastly negative side-effects, and ethically questionable at best.

Re: SEWIWEIC

[0olong.livejournal.com]

To put it another way, it's not a question of 'a maximum amount that people are allowed to earn in a year' - what you mean is surely 'should there be a maximum amount that people are allowed to BE PAID in a year?'

There is a maximum amount that people can EARN, in the sense of doing enough work or having enough talent to be paid that sort of quantity.

[del-c.livejournal.com]

There should never be a maximum amount, just an increasing percentage of the marginal pound taxed. If you're an annual billionaire, you can still get up in the morning looking forward to a 10% raise, it's just that 99 pennies of the last pound you get are taxed. But you *will* get that last penny, and probably for doing less work than I do for my last penny. And it adds up to another million pounds for you, even if 99 million does go into the public coffers.

A hard cap is so unnecessary, that it makes me wonder who's putting it around that that and unlimited compensation with low marginal top tax rates are the only two possibilities on the table.

[ninebelow.livejournal.com]

Yep, exactly.

[bookzombie.livejournal.com]

My problem with setting ceiling amounts is: who gets to decide? Trying to get an objective decision would be almost impossible. Though I do like the idea of fixing the relationship between the chief executives' pay and other employees...

[simont]

who gets to decide? Trying to get an objective decision would be almost impossible.

Ha, yes! Anyone you asked would give a plausible argument for choosing to set the ceiling at £X, and it would just so happen that the maximum that that particular person could reasonably expect to earn in their life was £X-1...

[calum]

I wouldnt set a maximum salary, but I would set a minimum tax level payable - regardless whether its from shares, income, capital gains, etc. If its your money to spend, pay tax on it.

No more tax avoidance - you earn a million quid a year, you damn well pay 40% tax on most of it.

[inamac.livejournal.com]

I'm out of step on 1 because 'part' of 'some people's' is awfully vague. Which part? Whose? If an employer is doing his job he'll be selecting the most competent worker, and incentivising them with interesting/challenging work rather than money.

And where do football players stand?

I'm not in favour of blanket maximums because I know too many actors who've been assessed for taxes on high-earning years at times when they're out of work.

But it's all very difficult. *Flails*

[philmophlegm.livejournal.com]

Dead easy.

The state has no business whatsoever interfering in contracts between private individuals and private companies. On the other hand I have much less objection to a cap on public sector pay. Oh, and tax rates should be as low as possible and as flat as possible.

But then I'm a liberal.

[chess]

So private companies should be allowed to exploit undereducated employees by introducing unfair contract terms that they have no hope of understanding and enforcing them?

Should you be allowed to sell yourself into slavery? What about your children?

[drdoug.livejournal.com]

The cases where it's genuinely sensible to base pay on performance are few and getting fewer as automation eats in to commodity-producing piecework. Certainly at the executive level it's a mug's game of cat-and-mouse around the principal-agent problem.

[doubtingmichael.livejournal.com]

I voted no on the "maximum amount per year", because someone like J K Rowling seems to have earned every penny, by a very simple transaction (but let's tax that income, of course!). However, I also think that a lot of people who are very highly paid are only doing so because they work close to money and that makes it easier for them to get hold of it.

In all the discussions about CEO pay, nobody (on either side) seems to be saying "Well, what's happening is that they can get a lot of money, so they do. What's strange about that?" I'm not sure it's helpful to demonise that motive, and the many debaters on the left seem to be very keen to do that.

[del-c.livejournal.com]

Debaters on the right seem keen to demonise the simple taking away of it in taxes. The thing about taxation is that it *doesn't* pass moral judgment on the tax payer. The argument against taxing rich people, by contrast, utterly depends on lionising the rich; they claim they "earned the money, it's theirs, and they should keep it".

What you call demonising is just the simple contradicting statement "no you didn't earn it, you just got it. And now we get it back". If you don't want demonisation of wealth, you have to abandon lionisation of wealth, and also abandon demonisation of tax.

[ajax-nz.livejournal.com]

Use the national median income.(not average)
Base a tiered tax rate on multiples of that.

Means rich *ankers have a big incentive to make everyone else richer too.

[danieldwilliam.livejournal.com]

A way round the issue of lumpy pay for artistic or scientific output might be base income tax on life time average earnings.

[chess]

That sounds very difficult to calculate...

[rhythmaning.livejournal.com]

I ticked "no limit" to what people can earn - but that isn't necessarily strictly the truth.

I don't think there should be a statutory limit, but I do feel there should be a moral limit, based on the lowest paid person in an organisation. Maybe 10 or 20x.

I also think that shareholders should have more balls and determine pay.

[chess]

Do you have a pension scheme? Have you written to the people who run it, expressing that they should be a more active shareholder in the field of limiting pay?

Shareholders can't usually 'have more balls' because they mostly come in the following flavours:

1) large institutional shareholders who represent a very wide range of opinions including quite a lot of 'they deserve it' and a majority of 'we don't care' - pension schemes etc

2) daytrader / hedge fund activity who have no connection with the individual company at all and hold shares briefly in a massive number of companies, which they don't have the time or interest to actually interact with in any way...