Frequently we hear scuttlebutting on the raising of the minimum wage and its adversarial impact on smaller businesses. This criticism of raising the minimum wage seems to be just and valid, as smaller businesses frequently run on smaller profit margins and costs of labor play a tremendous role in determining the cost of the product and services provided by that company. The more expensive that the product or service becomes, the less likely it is consumers will purchase the product if there is a cheaper alternative available, logic seems to dictate. Again, that seems to be a fair argument. This issue becomes a sticky big company vs. small business matter when it is put into a real-world context. Why?
Through economies of scale, as long as sources are maximizing their outputs as efficiently as possible, larger firms will be able to compete better as they are able to defray costs more effectively. Of course, this holds true when ideals are only tested in theory and not in practice. In practice, the result can be similar, but doesn’t necessarily hold true. Which brings me back to the main point: costs increase by statute for everyone. Is there a way to defray costs out so that competitive wages for all are possible?
I would propose so, although this idea has its own shortcomings. I would rather see the institution of a maximum income law. For all points and purposes, no person who does not have a serious medical condition which must be treated with the greatest medical care should need to have more than X dollars. What that X sum is, I don’t know right now, but for all intents and purposes, it’s a substantial sum.
There have been upsets and stirrings in the American public regarding the gross overcompensation of individuals, frequently members sitting on executive boards, CEOs, and other persons of high executive office in large corporations, who receive grotesquely large compensation packages whilst bankrupting a company. (See Enron run. Run Enron, run!) Frequently this money is more than any average American could ever imagine personally having, amounts being in the tens of millions of dollars. Now let us consider the following proposition: Is it just for executives who mismanage a company and get fired to receive amounts of money that most people could ever dream of? It seems to run counter to the idea that the best job done gets the most compensation.
So don’t pay it. Or get taxed out of it. There are myriad better ways to expend that money than through hypergratuitous compensation. Because really, what is running a company into the ground worth? If I can come up with an equation and figure out what that maximum income would be, I’ll post it. I’m thinking that it’s likely around 1.5 million yearly. Possibly less.
But yes: If I ran things around here, no person could make more than $X (where X equals the result of an as-yet undefined equation which I think will yield an X of 1.5 million).