Wage Cap

The 200 year experiment has failed. While we have shown that large businesses with centralized mass production reduce the cost of producing goods, we have failed to show that they reduce the prices of goods. Mass production is good and useful. When done properly, it decreases production costs and increases quality. Centralizing mass production has not been good or useful. Centralized production requires robust transportation fleets, which are expensive in fuel, time, and maintenance of both vehicles and roads. The failure of the experiment, however, is not related to transportation costs. The experiment has failed due to greed and corruption.

Large companies have slowly robbed their employees and customers more and more. With this ill gotten gain, they have paid our government to make laws that give them even more power. We now live in a nation of slaves and slavers. The majority of us are slaves, while the rest are the slavers. There is no middle ground. Most of the people in the US work to produce enormous profits and are then paid only enough for room and board, while the profits they have worked so hard for go to some CEO or other person that does less work than they do. The people are now rebelling, but our government does not even know what to do, because they have never thought about how to best serve the people they govern. I have some suggestions.

I propose a wage cap. Presuming the average adult needs 8 hours of sleep a day and that this leaves them with 16 hours during the day that they could work, and presuming that the average person is capable of working like this 6 days a week, a person cannot reasonably work more than 5,000 hours in a year. Also presuming that a well trained individual can do work valued at over 10 times what the average McDonald's employee's work is worth, it might be reasonable to say that this individual should be paid $100 an hour. Given this, this person could earn $500,000 a year. If you want to argue that the work of the McDonald's worker is worth less than 10 times the trained individual, then the trained person cannot eat fast food and then shall only be able to work 13 hours a day, since he now has to spend 1 hour per meal in preparation time. So, I propose that a maximum wage be mandated that prohibits payment of more than $500,000 in combined wages and benefits per year per person. This is enough money for anyone in the US to survive quite comfortably, and it would affect less than 5% of the population.

In addition, I propose a profit cap for businesses. This should be a percentage and should represent a reasonable profit margin, that cannot be considered extortion (there should also be a fairly large maximum dollar amount, to limit the size and influence of businesses). Costs for maintenance and replacement equipment can be taken from the total profits, but research and expansion costs should not be (they must be counted as profits). Elective costs should also not be subtracted from profits, including charitable donations (it is unethical for a company to donate money that was generated by their workers). If a company generates more profits than are allowed, those profits should be equally distributed among employees (that have not reached their maximum wage) and a fine should be charged against the remaining profits (a company may instead choose to distribute before filing taxes to avoid the fine).

These two things would make a huge difference in distribution of wealth. Large businesses would be paying much less to officers, because of the wage cap. The profit cap would require the businesses to do something with this money and the rest of their overages, that does not directly benefit the company and that does not just get rid of it to charities. The only options would be to either use the money to pay the employees fairly, or reduce prices dramatically to avoid the overages in the first place. Either of these would be good. The first would directly ensure that employees get a fair share of the profits. The second would increase the value of the US dollar so much that even current minimum wage would be quite lucrative pay. In addition, many workers could cut their work hours, opening up jobs for the 9% of unemployed Americans.

An interesting side note: Those who already have large amounts of wealth would also benefit greatly from the second scenario (prices dropping), as the value of their accumulated wealth would double, triple, or even better.

I realize that this solution has some holes. The actual legislation would need to carefully address the question of exactly what costs a company can exclude from their profits, to avoid holes that would allow companies to use overages in ways that would not benefit the employees. The wage cap legislation would have to also avoid loopholes that would allow any form of compensation to not be counted in the cap. I am neither a lawyer nor a politician, so I am not qualified to actually draft this legislation, but I do feel that I am qualified to suggest a good framework that could be used in drafting legislation, by those who we pay to do that job.

I believe that this particular course of action would not only solve the distribution of wealth problem, but I believe that it would also solve most of the problems with our economy as well. It could potentially double the value of the US dollar, making us a real contender in the world economy again. It could put many Americans into higher tax brackets, which would solve the budget issues with our government (or at least make them less severe). Fixing the distribution of wealth problem would create more jobs (fewer people would need to work multiple jobs, some people would choose to work only part time, and many people would start small businesses), potentially entirely eliminating the 9% unemployment we are currently facing.

It is certain something needs to be done. As I have mentioned, I believe that we are on the brink of revolution, especially if the government does not act quickly to fix these problems. I believe this solution would fix a great number of our current problems. It would affect our capitalist economy (which, in case you missed it, is failing) by slowing expansion and limiting rates of gain, but it would not replace it will a more oppressive system, nor would it interfere with it significantly. This would benefit a vast majority of the US population, and those who did not benefit would not be significantly harmed. We need to do something, and I think that this solution would fix the most urgent problems the most quickly and the most permanently.

Lord Rybec