Maximum Wage bill
Discussion
On now, after PMQ
http://www.bbc.co.uk/iplayer/playlive/bbc_parliame...
Paddy Tipping (Labour - Sherwood) is suggesting this. WTF is this mong on about? Wanting to cap maximum earnings? WTF for? I earn peanuts in the grand scheme of things, but I can see that this is a ludicrously bad idea, there would be no incentive to do better, it would kill the economy.
http://www.bbc.co.uk/iplayer/playlive/bbc_parliame...
Paddy Tipping (Labour - Sherwood) is suggesting this. WTF is this mong on about? Wanting to cap maximum earnings? WTF for? I earn peanuts in the grand scheme of things, but I can see that this is a ludicrously bad idea, there would be no incentive to do better, it would kill the economy.
cottonfoo said:
His thought was to link the maximum wage to the average wage of the entire company, so the only way to earn more would be to pay the employees more.
Or, ABC inc splits into several companies, ABC Secretarial services, ABC Marketing, ABC Logistics etc, all acting as contractors to ABC Holdings, inc, with differing pay structures.Proabably help with corporation tax as well.
ks from a dead party.Jasandjules said:
I wonder if he includes expense claims in that....
However, the bottom line is we live in (in theory) a free market, therefore the market sets the price. It is not for the state to interfere in that.
You had to add that caveat of "(in theory)".However, the bottom line is we live in (in theory) a free market, therefore the market sets the price. It is not for the state to interfere in that.
I don't think there is agreement about what sort of "market" we now operate in.
Exactly. It's important that we pay the high earners lots of money to motivate them to work hard. And we need to reduce the minimum wage for low earners to motivate them to work harder.
Edit: Wait, that sounds a bit contradictory. What I meant was that we need to pay even higher wages to the high earners for various reasons. Yes, that's a bit better.
Edit: Wait, that sounds a bit contradictory. What I meant was that we need to pay even higher wages to the high earners for various reasons. Yes, that's a bit better.
Edited by BOR on Thursday 4th June 09:25
And interesting take on wage inequility:
"Everyone seems upset by the prospect of banks paying big bonuses. What they’re not asking is: why have banks paid them for so long?
The popular answer is that banks need to attract the best talent.
Yeah, right. Eric Falkenstein and James Kwak provide the real answer. Traders must be bribed not to plunder the firm. If you don’t pay them millions, they’ll sell the banks’ assets cheaply to rival firms for which they then go and work. They are paid fortunes not because they have skill, but because they have power.
It’s not just bankers of whom this is true. Peter Skott and Frederick Guy show that it is changes in differences in power that can explain a hefty chunk of the rise in inequality we’ve seen since the 1980s.
To see why, remember efficiency wage models. These tell us that where employers cannot monitor workers directly, they might want to pay more than the market-clearing wage to bribe workers not to shirk or damage the company in some way.
Now, since the 1980s, technical change has made it easier to monitor ordinary workers. Automated production lines, bar-coding in retailing, GPS systems that follow van drivers or recorded telephony in call centres all allow bosses to measure and control less “skilled” workers. So there’s no need to pay such workers above the market rate. Their wages have therefore stagnated.
However, the efficiency wage component of managers’ pay - the amount over the market-clearing rate necessary to bribe them - increased since the 1980s. When finance was plentiful, managers could rip off shareholders by arranging management buy-outs at low prices. To stop this, bosses had to be offered big money. And in more competitive or contestable markets, a lazy manager can more easily send a company to the wall. With the costs of shirking so large, the bribe required to induce effort must also be large.
The result of all this has been a growing gap between the pay of bosses and some professionals on the one hand and workers on the other.
You can call this a rising return to “skill” if you like. But the “skill” is an ability to demand a big bribe - and this comes from power.
Could it be, then, that one effect of this banking crisis will be to show that talk of “talent” is just an ideological veil behind which rising inequality has been the result of inequalities in naked power?"
http://stumblingandmumbling.typepad.com/stumbling_...
"Everyone seems upset by the prospect of banks paying big bonuses. What they’re not asking is: why have banks paid them for so long?
The popular answer is that banks need to attract the best talent.
Yeah, right. Eric Falkenstein and James Kwak provide the real answer. Traders must be bribed not to plunder the firm. If you don’t pay them millions, they’ll sell the banks’ assets cheaply to rival firms for which they then go and work. They are paid fortunes not because they have skill, but because they have power.
It’s not just bankers of whom this is true. Peter Skott and Frederick Guy show that it is changes in differences in power that can explain a hefty chunk of the rise in inequality we’ve seen since the 1980s.
To see why, remember efficiency wage models. These tell us that where employers cannot monitor workers directly, they might want to pay more than the market-clearing wage to bribe workers not to shirk or damage the company in some way.
Now, since the 1980s, technical change has made it easier to monitor ordinary workers. Automated production lines, bar-coding in retailing, GPS systems that follow van drivers or recorded telephony in call centres all allow bosses to measure and control less “skilled” workers. So there’s no need to pay such workers above the market rate. Their wages have therefore stagnated.
However, the efficiency wage component of managers’ pay - the amount over the market-clearing rate necessary to bribe them - increased since the 1980s. When finance was plentiful, managers could rip off shareholders by arranging management buy-outs at low prices. To stop this, bosses had to be offered big money. And in more competitive or contestable markets, a lazy manager can more easily send a company to the wall. With the costs of shirking so large, the bribe required to induce effort must also be large.
The result of all this has been a growing gap between the pay of bosses and some professionals on the one hand and workers on the other.
You can call this a rising return to “skill” if you like. But the “skill” is an ability to demand a big bribe - and this comes from power.
Could it be, then, that one effect of this banking crisis will be to show that talk of “talent” is just an ideological veil behind which rising inequality has been the result of inequalities in naked power?"
http://stumblingandmumbling.typepad.com/stumbling_...
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