Limiting What People Can Make Is A Terrible Idea
Here is a comment from, “The Problem With The Minimum Wage” post that I put up on Friday…
“…We don’t need a higher minimum wage, we need a maximum wage. Say, $10 million per year. That’s easily too much money for any rational person. Anyone who makes more than that doesn’t deserve it. The obscenely rich will hardly notice it. That money will ‘trickly down’ _instantly_ into the economy. Result: the standard of living of 99% of our population goes up.” — RanDomino
So why not have a maximum wage?
Well, we have to remember that people, even the “obscenely rich” as RanDomino calls them, will change their behavior if circumstances change. In this case, if we limit the amount that people can make, the people who hit that limit will for the most part do 1 of 2 things; Either they will find a way to get around the law by being compensated in perks, stock options, or other ways, or their level of effort will precipitously decline when they max out the amount of money they’re allowed to make. That’s just human nature and it applies to the rich just like it does to the rest of us.
For example, let’s say you get a sales job and each month, you get $10 a widget for the first 500 widgets you sell and nothing for any beyond that number. Furthermore, let’s say you sell 500 widgets in the first week of the month. Well, what’s going to happen then? You’re going to coast and do the absolute minimum that you’re required to do for the rest of the month. Again, that’s just human nature. People don’t work for free, they work for compensation.
Well, the same thing applies to the rich. Just ask yourself; if there had been a $10 million dollar ceiling on people’s earning, do you think McDonald’s, Walmart, Microsoft, Ford, or any of the other big corporations would exist in their current form? I can tell you definitively that they would not. Why would Ray Kroc bother to sell McDonald’s franchises if he couldn’t make money off of them? What sense would it make for Microsoft to continue rolling out new products if Bill Gates wouldn’t be able to legally make a dime off of them? There would be no point to it, just as their would be no point to you trying to sell that 501st widget if you weren’t going to be paid for it.
Besides, if a person or corporation is willing to pay someone $10 million for their services or if the owner of a business has such a terrific product or service that they can get rich off it, who are we to arbitrarily decide that they’re making “too much money”? As far I’m concerned, we should let people earn as much as the market will bear.