6 ms·

Agreed and also this should be true for the pay of elected officials and corporate executives.

3825 13y ago
Minimum wage for elected officials sounds good on paper. Michael Bloomberg would not mind. However, how does this work for corporate executives? When you say pay does this include stock grants and options or just salary?
- m0th87 13y ago
  Also it arguably opens the doors for corruption. Bloomberg ran on a campaign of "I'm so rich, no one can bribe me." If a non-billionaire politician receives the minimum wage, they could be more susceptible to financial incentives.
- logfromblammo 13y ago
  No, it does not. The minimum wage is set by elected officials. What do you think will happen when they set the minimum wage to whatever it is they want to be paid? How about instead, you set their pay to a percentile marker for the income of their constituents, entirely disregarding income received from any government, including those without wage or salary income. For households with spouses and dependants and such, each member has income equal to the total income of the household divided by the number of members. So if 20% of households have no one working at all (as it is now), elected officials could significantly increase their own pay just by finding a job for just one person in each of those households. Increasing the income of the top 1% would not produce any additional pay. If 51% of households are broke or on the dole, elected officials paid at 50th %ile would get $0. They get to rely on welfare too, just like everyone else. And really, if that's the case, they're lucky enough to not be paid with bullets to the head for their "service".
ntietz 13y ago
The problem with this is that it limits elected officials to only be already wealthy, because then they can go without a good paycheck. High salaries are important to letting the common person into office (although there are plenty of OTHER factors that stop that from happening).
eloff 13y ago
Good luck attracting and retaining talent if you can't pay market prices for executives.
- KingMob 13y ago
  I doubt they should be so worried. Studies show no link between executive pay and executive performance: http://www.economist.com/blogs/graphicdetail/2012/02/focus-0 http://www.economist.com/blogs/graphicdetail/2012/02/focus-0
  - bostonpete 13y ago
    I think this is showing a lack of a link between executive pay and stock performance. It could be the case (though I don't know how you'd measure it) that executive performance improved with pay but just had no discernible impact on stock performance.
    - niels_olson 13y ago
      I don't think most executives do it for the money. Money is just a way of keeping score.
  - eloff 13y ago
    It doesn't matter, performance is not the only concern. Connections and domain knowledge are even more valuable. Let's say you're Amazon and you pay your CTO a respectable $250k/year. Along comes Microsoft or Google and offers him ten times as much. He's rational so he accepts and take with him all of Amazon's technical secrets to success. Even if there were national regulation capping executive pay in the US, other countries would hire away all of the top players with all their knowledge and connections. It would be a disaster. Is executive pay crazy? Yes, often. But the market supposedly is efficient and the pay is that high for rational reasons in many cases (not all!)
- logfromblammo 13y ago
  All you need to do is break it into two jobs. The first job is a paid actor that collects and enters all business-relevant data into a computer system, then follows exactly the script that the system provides in response. This actor is replaced immediately if he ever tries to deviate from the script. Internally, the system automatically translates the recognizable business symbols into abstract values. The second job is an engineer that optimizes the system for the highest obfuscated profit number. Also, build in a safeguard to the obfuscator/de-obfuscator program so that the engineer cannot fire himself.
rmc 13y ago
Sure fire way to encourage politicans to take bribes as well as ensuring only the independently wealthy can be politicians,
- pritambaral 13y ago
  > take bribes as well as ensuring only the independently wealthy can be politicians Those are other, unrelated problems that need to be addressed in their own right, but cannot be used as justification for high pay scale of politicians.
  - bostonpete 13y ago
    I suspect most high ranking government officials in the US could make significantly more in the private sector so it's hard to claim there's a high scale of pay for politicians -- at least in the US.
    - talmand 13y ago
      Politicians don't get rich from their paycheck.
      - niels_olson 13y ago
        They also didn't get elected for knowing a bunch of regular folks.
      - pbhjpbhj 13y ago
        Assuming you're not being snide; how do they get rich then (whilst in post)?
        edias 13y ago
        Generally they don't unless their doing something illegal. Most politicians are reasonably to very wealthy going into office, and being a high ranking politician basically secures them a high paying position in the private sector afterwards. Many people from the FCC/FDA will go into the telecom/pharmaceutical industries for example. Others will charge huge fees for speaking engagements and appearances. I remember reading Bill Clinton charges in the 10k-50k range for speaches but not sure on the specifics. So basically no one expects to make money from their paycheck, but rather go into politics for the fame, connections, and other intangibles.
IanDrake 13y ago
>and corporate executives Sure why not, all they did is take money from willing people called customers. While we're at it let's add... Basketball, baseball, football, hockey, and soccer players, golfers, Hollywood stars, and successful book authors like Steven King. These people are so greedy because they make millions a year! All while their viewers/readers/hot dog venders/editors make so much less. It's not fair. Seriously, I don't understand why people complain about executive pay when the folks I just listed make more for adding less value to the world.
- mhurron 13y ago
  Because people NEVER complain about sports stars/actors/authors imbalance in compensation. But why are we talking about this when there are kids starving in Africa /sarcasm Not everyone has to list everything that annoys them when they are talking about one of those things.
- kumbasha 13y ago
  Lots of executives around the world make huge profits for their companies and employees, without collecting multimillion dollar salaries for themselves. Since being a millionaire is empirically not required for CEOs, their multimillion dollar salaries could be better used elsewhere.
  - russell_h 13y ago
    If you see a company paying their executive too much, why not either: a) Offer to do their job for less. b) Start a competing company? With your lower costs you should have no trouble crushing them in the market.
    - pbhjpbhj 13y ago
      Because people who're in a position to control company buying are falling over themselves to ensure justice in wages and make sure that people who're in a position to control company buying aren't being overpaid?

3825 13y ago

Minimum wage for elected officials sounds good on paper. Michael Bloomberg would not mind. However, how does this work for corporate executives? When you say pay does this include stock grants and options or just salary?

m0th87 13y ago
Also it arguably opens the doors for corruption. Bloomberg ran on a campaign of "I'm so rich, no one can bribe me." If a non-billionaire politician receives the minimum wage, they could be more susceptible to financial incentives.
logfromblammo 13y ago
No, it does not. The minimum wage is set by elected officials. What do you think will happen when they set the minimum wage to whatever it is they want to be paid? How about instead, you set their pay to a percentile marker for the income of their constituents, entirely disregarding income received from any government, including those without wage or salary income. For households with spouses and dependants and such, each member has income equal to the total income of the household divided by the number of members. So if 20% of households have no one working at all (as it is now), elected officials could significantly increase their own pay just by finding a job for just one person in each of those households. Increasing the income of the top 1% would not produce any additional pay. If 51% of households are broke or on the dole, elected officials paid at 50th %ile would get $0. They get to rely on welfare too, just like everyone else. And really, if that's the case, they're lucky enough to not be paid with bullets to the head for their "service".

ntietz 13y ago

The problem with this is that it limits elected officials to only be already wealthy, because then they can go without a good paycheck. High salaries are important to letting the common person into office (although there are plenty of OTHER factors that stop that from happening).

eloff 13y ago

Good luck attracting and retaining talent if you can't pay market prices for executives.

KingMob 13y ago
I doubt they should be so worried. Studies show no link between executive pay and executive performance: http://www.economist.com/blogs/graphicdetail/2012/02/focus-0 http://www.economist.com/blogs/graphicdetail/2012/02/focus-0
- bostonpete 13y ago
  I think this is showing a lack of a link between executive pay and stock performance. It could be the case (though I don't know how you'd measure it) that executive performance improved with pay but just had no discernible impact on stock performance.
  - niels_olson 13y ago
    I don't think most executives do it for the money. Money is just a way of keeping score.
- eloff 13y ago
  It doesn't matter, performance is not the only concern. Connections and domain knowledge are even more valuable. Let's say you're Amazon and you pay your CTO a respectable $250k/year. Along comes Microsoft or Google and offers him ten times as much. He's rational so he accepts and take with him all of Amazon's technical secrets to success. Even if there were national regulation capping executive pay in the US, other countries would hire away all of the top players with all their knowledge and connections. It would be a disaster. Is executive pay crazy? Yes, often. But the market supposedly is efficient and the pay is that high for rational reasons in many cases (not all!)
logfromblammo 13y ago
All you need to do is break it into two jobs. The first job is a paid actor that collects and enters all business-relevant data into a computer system, then follows exactly the script that the system provides in response. This actor is replaced immediately if he ever tries to deviate from the script. Internally, the system automatically translates the recognizable business symbols into abstract values. The second job is an engineer that optimizes the system for the highest obfuscated profit number. Also, build in a safeguard to the obfuscator/de-obfuscator program so that the engineer cannot fire himself.

rmc 13y ago

Sure fire way to encourage politicans to take bribes as well as ensuring only the independently wealthy can be politicians,

pritambaral 13y ago
> take bribes as well as ensuring only the independently wealthy can be politicians Those are other, unrelated problems that need to be addressed in their own right, but cannot be used as justification for high pay scale of politicians.
- bostonpete 13y ago
  I suspect most high ranking government officials in the US could make significantly more in the private sector so it's hard to claim there's a high scale of pay for politicians -- at least in the US.
  - talmand 13y ago
    Politicians don't get rich from their paycheck.
    - niels_olson 13y ago
      They also didn't get elected for knowing a bunch of regular folks.
    - pbhjpbhj 13y ago
      Assuming you're not being snide; how do they get rich then (whilst in post)?
      - edias 13y ago
        Generally they don't unless their doing something illegal. Most politicians are reasonably to very wealthy going into office, and being a high ranking politician basically secures them a high paying position in the private sector afterwards. Many people from the FCC/FDA will go into the telecom/pharmaceutical industries for example. Others will charge huge fees for speaking engagements and appearances. I remember reading Bill Clinton charges in the 10k-50k range for speaches but not sure on the specifics. So basically no one expects to make money from their paycheck, but rather go into politics for the fame, connections, and other intangibles.

IanDrake 13y ago

>and corporate executives Sure why not, all they did is take money from willing people called customers. While we're at it let's add... Basketball, baseball, football, hockey, and soccer players, golfers, Hollywood stars, and successful book authors like Steven King. These people are so greedy because they make millions a year! All while their viewers/readers/hot dog venders/editors make so much less. It's not fair. Seriously, I don't understand why people complain about executive pay when the folks I just listed make more for adding less value to the world.

mhurron 13y ago
Because people NEVER complain about sports stars/actors/authors imbalance in compensation. But why are we talking about this when there are kids starving in Africa /sarcasm Not everyone has to list everything that annoys them when they are talking about one of those things.
kumbasha 13y ago
Lots of executives around the world make huge profits for their companies and employees, without collecting multimillion dollar salaries for themselves. Since being a millionaire is empirically not required for CEOs, their multimillion dollar salaries could be better used elsewhere.
- russell_h 13y ago
  If you see a company paying their executive too much, why not either: a) Offer to do their job for less. b) Start a competing company? With your lower costs you should have no trouble crushing them in the market.
  - pbhjpbhj 13y ago
    Because people who're in a position to control company buying are falling over themselves to ensure justice in wages and make sure that people who're in a position to control company buying aren't being overpaid?