6 ms·

Most likely what will happen, and I believe this is the case already in most businesses, that the cleaning functions will be outsourced to a separate company. T

by daemin 10y ago

Most likely what will happen, and I believe this is the case already in most businesses, that the cleaning functions will be outsourced to a separate company. Therefore the limit won't be the cleaner earning 10k/y, but some office admin person earning 30k/y (just guessing that one). Now then a CEO might want to outsource those jobs as well, so the company would officially only employ the highest income people. Either that or split the company up based on earning bands, and have the CEO be the CEO of each company, so even though they could only get paid 500k for the company with the cleaners, they would also be paid 1m for the company with the office admins, and more for each other company in the bucket. There are ways to work around whatever limitations will be created.

shuntress 10y ago
This is essentially a loophole and there must be a way to close it. Maybe it's naive to think its as simple as being slightly more verbose: "Salary tied to lowest paid employee or contractor"
- daemin 10y ago
  Well technically running separate businesses for each salary tier would still get around it. The CEO's pay would be the combination of all of the individual CEO salaries that they would be doing. Also cleaning and administration services wouldn't be contractors, but services bought from another company. So that wouldn't count either.
  - ethbro 10y ago
    Point of interest: sometimes technical people forget that the law doesn't work the way that computers do. If you close all reasonable loopholes and make your intent clear when you write the law, a judge (at least here in the US, I know the UK has a slightly different system) is not going to say "Oh, that's undefined behavior, you get a free pass." He or she is going to say "That's undefined behavior, but you're trying to circumvent what was clearly the intent of the law. Bring yourself into compliance or face further penalties."
    - sitkack 10y ago
      Asperger's is useful in programming, not so much in Law.
      - ethbro 10y ago
        My friend and I started a habit of prefacing humorously pedantic rebuttals with "Well, actually...", but also calling each other on it when we did so involuntarily. It's surprising how often we had cause to (although maybe we're both borderline).
    - daemin 10y ago
      Well I don't actually consider the options I've presented to be that far fetched. For all the places that I've worked, the cleaners have always been part of another company, one that was contracted to provide cleaning services. There's also firms and contractors that provide bookkeeping services for small businesses. I'm sure a lot of other administrative tasks could be outsourced as well. Having these services provided by other companies would raise the minimum salary in a company quite a lot. The other thing companies do is set up plenty of shell/thin corporations around the world, assign the IP rights to those in minimal tax countries, and then charge massive internal fees so that all the rest of the organisation barely makes a profit. This sort of thing seems to be the same level of loop-hole as setting up multiple companies so that the CxO's can get paid more. Of course that's forgetting that most of the CxO pay is actually in stock and options, and not so much is in cash, so I don't know how much a law capping CEO pay would do. Some notable CEO's have actually taken just $1 of actual cash for payment (because legally they have to be paid something to receive company perks).
      - crdoconnor 10y ago
        >The other thing companies do is set up plenty of shell/thin corporations around the world, assign the IP rights to those in minimal tax countries, and then charge massive internal fees so that all the rest of the organisation barely makes a profit. This sort of thing seems to be the same level of loop-hole as setting up multiple companies so that the CxO's can get paid more. All it takes to end this practice is for the tax authorities to take a dim view of it. Starbucks and Google were both caught by this and although they didn't pay a fine as large as they should have done, with a nod and a wink, they did end up paying more. The economic system is nowhere near as immutable to change as certain people would like you to believe. The swift reaction by BlackRock to the government simply making noises in particular was noteworthy: https://www.theguardian.com/business/2017/jan/15/blackrock-demands-cuts-to-executive-pay-and-bonuses https://www.theguardian.com/business/2017/jan/15/blackrock-d...
- LgWoodenBadger 10y ago
  Aggregate everyone involved (regardless of company) into one category and do the math that way.
  - daemin 10y ago
    I've thought about this and it can't easily be done. Where would you draw the line between the company providing a service or being essential to the product? For example in clothes manufacturer, which contracts out the making of its clothes to a company in another country. Would the people employed by that other company be counted?
  - Nomentatus 10y ago
    A "maximum wage law" might well be the most effective "minimum wage law" we could devise. But this does leave patent-holders and large shareholders (and real estate moguls) still scooping up an outsized share of GDP. That would be okay by me, IF network effects were being regulated or prosecuted (including under the Sherman act) so that public utilities were being supervised as such. But that's exactly what hasn't been happening for forty years and more, now.
anigbrowl 10y ago
I have really had it with this kind of bullshit gamesmanship. If the people at the top default to exploiting the rules for their own advantage, why should anyone bother to play within the rules when it's so much more profitable to subvert them? In the context of sports, this manifests as using procedural methods to run out the clock or interrupt play by complaining that a foul has taken place, or causing a foul because the penalty (letting the other team have a shot at the goal or having a player sent off temporarily) is an acceptable price to pay for interrupting the momentum and scoring ability of the other team. All sports teams want to preserve their options under the rules, but some teams seem to rely more on leveraging the rules than on superior performance onthe field. This may be pleasing to their hardcore fans, but when all the action is on the sidelines I feel it's a sign of the team going into decline. I feel the same way about business. If a firm's corporate identity is built on clever legal and accounting tricks and PR rather than the provision of a valuable product or service by people who enjoy their jobs, then it's likely a shitty firm. Unfortunately there are quite a lot of shitty firms, and their cumulative effect on the economy as a whole is cancerous.
- victormours 10y ago
  The whole "wealth management" industry is actually all about this. As long as they keep on operating as they do now, the gaming will continue.
- deleted 10y ago
  [deleted]

by daemin 10y ago

shuntress 10y ago

This is essentially a loophole and there must be a way to close it. Maybe it's naive to think its as simple as being slightly more verbose: "Salary tied to lowest paid employee or contractor"

daemin 10y ago
Well technically running separate businesses for each salary tier would still get around it. The CEO's pay would be the combination of all of the individual CEO salaries that they would be doing. Also cleaning and administration services wouldn't be contractors, but services bought from another company. So that wouldn't count either.
- ethbro 10y ago
  Point of interest: sometimes technical people forget that the law doesn't work the way that computers do. If you close all reasonable loopholes and make your intent clear when you write the law, a judge (at least here in the US, I know the UK has a slightly different system) is not going to say "Oh, that's undefined behavior, you get a free pass." He or she is going to say "That's undefined behavior, but you're trying to circumvent what was clearly the intent of the law. Bring yourself into compliance or face further penalties."
  - sitkack 10y ago
    Asperger's is useful in programming, not so much in Law.
    - ethbro 10y ago
      My friend and I started a habit of prefacing humorously pedantic rebuttals with "Well, actually...", but also calling each other on it when we did so involuntarily. It's surprising how often we had cause to (although maybe we're both borderline).
  - daemin 10y ago
    Well I don't actually consider the options I've presented to be that far fetched. For all the places that I've worked, the cleaners have always been part of another company, one that was contracted to provide cleaning services. There's also firms and contractors that provide bookkeeping services for small businesses. I'm sure a lot of other administrative tasks could be outsourced as well. Having these services provided by other companies would raise the minimum salary in a company quite a lot. The other thing companies do is set up plenty of shell/thin corporations around the world, assign the IP rights to those in minimal tax countries, and then charge massive internal fees so that all the rest of the organisation barely makes a profit. This sort of thing seems to be the same level of loop-hole as setting up multiple companies so that the CxO's can get paid more. Of course that's forgetting that most of the CxO pay is actually in stock and options, and not so much is in cash, so I don't know how much a law capping CEO pay would do. Some notable CEO's have actually taken just $1 of actual cash for payment (because legally they have to be paid something to receive company perks).
    - crdoconnor 10y ago
      >The other thing companies do is set up plenty of shell/thin corporations around the world, assign the IP rights to those in minimal tax countries, and then charge massive internal fees so that all the rest of the organisation barely makes a profit. This sort of thing seems to be the same level of loop-hole as setting up multiple companies so that the CxO's can get paid more. All it takes to end this practice is for the tax authorities to take a dim view of it. Starbucks and Google were both caught by this and although they didn't pay a fine as large as they should have done, with a nod and a wink, they did end up paying more. The economic system is nowhere near as immutable to change as certain people would like you to believe. The swift reaction by BlackRock to the government simply making noises in particular was noteworthy: https://www.theguardian.com/business/2017/jan/15/blackrock-demands-cuts-to-executive-pay-and-bonuses https://www.theguardian.com/business/2017/jan/15/blackrock-d...
LgWoodenBadger 10y ago
Aggregate everyone involved (regardless of company) into one category and do the math that way.
- daemin 10y ago
  I've thought about this and it can't easily be done. Where would you draw the line between the company providing a service or being essential to the product? For example in clothes manufacturer, which contracts out the making of its clothes to a company in another country. Would the people employed by that other company be counted?
- Nomentatus 10y ago
  A "maximum wage law" might well be the most effective "minimum wage law" we could devise. But this does leave patent-holders and large shareholders (and real estate moguls) still scooping up an outsized share of GDP. That would be okay by me, IF network effects were being regulated or prosecuted (including under the Sherman act) so that public utilities were being supervised as such. But that's exactly what hasn't been happening for forty years and more, now.

anigbrowl 10y ago

I have really had it with this kind of bullshit gamesmanship. If the people at the top default to exploiting the rules for their own advantage, why should anyone bother to play within the rules when it's so much more profitable to subvert them? In the context of sports, this manifests as using procedural methods to run out the clock or interrupt play by complaining that a foul has taken place, or causing a foul because the penalty (letting the other team have a shot at the goal or having a player sent off temporarily) is an acceptable price to pay for interrupting the momentum and scoring ability of the other team. All sports teams want to preserve their options under the rules, but some teams seem to rely more on leveraging the rules than on superior performance onthe field. This may be pleasing to their hardcore fans, but when all the action is on the sidelines I feel it's a sign of the team going into decline. I feel the same way about business. If a firm's corporate identity is built on clever legal and accounting tricks and PR rather than the provision of a valuable product or service by people who enjoy their jobs, then it's likely a shitty firm. Unfortunately there are quite a lot of shitty firms, and their cumulative effect on the economy as a whole is cancerous.

victormours 10y ago
The whole "wealth management" industry is actually all about this. As long as they keep on operating as they do now, the gaming will continue.
deleted 10y ago
[deleted]