In other words, the tech sector doesn’t have to be the poster child of inequality’s abuses. It could actually be a role model. Take just one potential remedy as a thought experiment. Let’s say we decided as a society that no private company should have a pay ratio above 40:1. That would lead to a radical decrease in income inequality, and it wouldn’t involve a cent of additional taxes. Every private company would be allowed to keep the exact same portion of its income. The government wouldn’t be extracting money out of the private sector; it would just put some boundaries on the way the private sector distributes its money internally. Critics would scream that such a dramatic intervention would be terrible for business, but of course the one sector of the economy that has already voluntarily embraced this ratio turns out to have nurtured the most profitable corporations in the history of capitalism. This would no doubt be fiddling with the natural markets for wages, but we fiddle with these all the time, through progressive income taxes, earned income tax credits, subsidies, and tax incentives. We have a minimum wage. What if we had a maximum ratio?

https://howwegettonext.com/maximum-wage-3e21048fc107#.9bktoo56m

4 thoughts on “In other words, the tech sector doesn’t have to be the poster child of inequality’s abuses. It could actually be a…

  1. So, it’s a neat idea, but I don’t think that rule would have the intended effect. If I was earning 400 times what my line workers were, and this rule came in, I’d simply split off the factories into separate companies, and then arrange to have them have them ‘outsource’ management to my exorbitantly paid executive firm.

    The main problem is that the rule doesn’t actually encapsulate the desired outcome – it works, but only if nothing else changes in response.

    Imagine the similar approach of having a per-region income cap. Again, if nobody moves, it would work out just fine, but of course everybody who stands to lose and who can afford to will just move. Any surviving mixed-income neighborhoods are killed off.

    Come to think of it, both of these measures might increase social class balkanization!