Should the US Copy Switzerland and Consider a 'Maximum Wage' Ratio?

Hugh Pickens DOT Com writes "John Sutter writes at CNN that as Swiss citizens vote on November 24 to consider capping executive pay at 12 times what the lowest-paid worker at a company makes in a referendum. Some say the idea of tethering top executive pay to some sort of concrete metric might stop American execs from floating further into the stratosphere. 'Here in America, the land of unequal opportunity, the CEOs of top-500 companies make in a single day about what it takes an average "rank-and-file" worker a year to earn, according to the AFL-CIO, the federation of unions,' writes Sutter. 'Democracy starts to unravel if a few people become wildly, ethereally successful, while the rest of a country struggles.' A $1 million salary worked for American CEOs from the 1930s to 1980s, says Lynn Stout. But CEO pay, including options realized that year, jumped about 875%, to $14.1 million, from 1978 to 2012, according to the Economic Policy Institute. 'What we've got is basically an arms race,' Stout says, 'where the CEOs are competing on pay because they each want to have higher status than the others.' Peter Drucker, the father of business management, famously said the CEO-to-worker salary ratio should not exceed 20:1, which is what existed in the United States in 1965. Beyond that, managers will see an increase in 'resentment and falling morale,' said Drucker. Stout has suggested that the IRS make CEO pay a non-deductible business expense when it's higher than 100 times the minimum wage. 'Limiting CEO pay to 100 times the minimum wage would still allow top execs to be millionaires,' concludes Sutter. 'And here's the best part: If the fat cats wanted a pay increase, maybe the best way for them to get it would be to throw political weight behind a campaign to boost the minimum wage.'"

Re:Sounds good on paper

[Joce640k]

But it's not going to work in the US, where rapid growth is part of the ostensible "American Dream" -- which includes gobs of wealth.

"it's not going to work in the US because citizens won't ever get to vote on anything like that."

FTFY.

People will still be able to make "gobs of wealth" in Switzerland, it's just that the people lower down the chain have to make money, not just the CEO.

Re:Stock Options

[sjames]

Study the French Revolution.

Re:Stock Options

[fredprado]

Corporations weren't successful controlled anywhere in the world, much less in US. Actually in US it can be said that it was always the other way around, my friend. History revisionism is not cool.

As a resident of Switzerland...

[mindstormpt]

I've been having plenty of discussions on the topic. It's funny, as Switzerland is probably the country that needs something like this the least. The median salary is around 75,000 USD, and although there is no global minimum salary in the law, there are sectorial conventions. The salary for a supermarket cashier starts at around $4,000 USD per month [info.rts.ch], but a gardener with technical training, for instance, will not earn less that $4,600 [jardinsuisse.ch].

It's also one of the few where citizens can change their constitution easily and directly, i.e. one of the few where this could ever happen. It won't happen this time (according to the polls), although many voters I talked to just disagree with the number, not the principle.

The BBC has a nice article on it [bbc.co.uk], showing the minimum and maximum salaries, and of course the ratio, for a few major Swiss companies. If you want to learn more about the direct aspects of Swiss democracy, the federal government publishes some information in English [www.ch.ch].

Re:Yes.

[ToastedRhino]

What a strange reply. As far as bang for one's buck goes, the US healthcare system is severely lagging and pretty [theverge.com] much [ucsc.edu] everyone [marketwatch.com] knows this. Perhaps you should go back and read what he had to say instead of spouting nonsense about the need for facts without providing any.

Re:Ratio

[DerekLyons]

We tried to organize a resistance to this; You seem to have already forgotten Occupy Wall Street.

ROTFLMAO. Seriously? You think the ludicrous play acting 'protest' of the Occupy movement was resistance? Child, you have no fucking idea what you're talking about. The Occupy movement was no more resistance than I'm Captain Kirk. The Occupy movement was a fucking joke, it's been forgotten because it was nothing to remember.
 

So let me be very, very clear on this point: The majority are fed up. We've tried rebelling. But when we see every attempt to organize for social change squashed and people jailed and stripped of their assets... it tends to have a chilling effect on future protest.

Let me be very clear on two points: First, you haven't tried rebelling. You've stood around on street corners and in parks vaguely hoping that slogans and Facebook image memes would somehow magically create change. Second, you haven't organized for social change either.
 

Police today come at protesters sideways... for every tear gas canister lobbed into a crowd, there's fifty more people having their door busted in on bogus drug warrants, or police sent to find something, anything, to detain those involved.

You make me wish my retirement funds were invested in tinfoil stocks. You've created a 'rebellion' from whole cloth, and invented a vast conspiracy to put down your little Facebook game as if it were some 'threat'.