From: dliebman@terapin.com (David Liebman)
Newsgroups: talk.politics.theory
Subject: Re: tiered wages
Date: 13 Oct 92 01:28:04 PST
Organization: BBS

dliebman@terapin.com (i):
 
>> instead of fixed minimum wage, who not establish the minimum as a
>> percentage of the maximum?  the ben and jerry's corporation practices
>> this: the most trivial wage slave of the company may receive compensation
>> no less than X% of that of the highest-paid.
 
pajerek@telstar.kodak.com (Don Pajerek):

> Another interesting idea is the 'salary cap' system employed by the NBA.    
> The idea here is that the players as a group are entitled to a certain      
> percentage of total team revenues. The exact division of the money is       
> a matter of negotiation between the individual players and the team, but    
> both parties go into the negotiation with the understanding that there      
> is an absolute limit on how much can go to the players.                      
 
 
in essence, the system i proposed would effectively link the high salary
levels with revenue, since the low salary levels, to which the high is
tied, typically comprise the majority of the total salary expenditure.
that is to say, the executive salary can only rise with the peasant salary,
which can only rise if the company can afford it.
 
still, i see the tier system as preferable to the NBA system for a
couple of reasons.  to begin with, any situation of negotiation between
a company and its workers clearly favors the company, particularly if it
is not a union shop, or particularly at a time when congress (as
demonstrated in its actions regarding this summer's rail strike) and
government in general are permissive towards strike-busting activities.
workers already negotiate for higher pay; there is little reason to
believe that adding a 'negotiated percentage of revenue' rule would have
any effect other than encouraging the execs to 'renegotiate' whenever
profits rose.  at any rate, perhaps the more immanent rationale for
a wage limitation would be to prevent excessive executive salaries.
but few workers would be willing to strike, losing money and possibly
job, just to try and keep the boss' salary down.  the immediate benefit
for them would be too low to function as an adequate incentive.
 
for these reasons it is important that workers' and executives' salaries
are determined with respect to each other, rather than separately
with respect to any third factor.  this creates internal coherence:
everyone wants _everyone's_ salary to rise.  this instead of the
current situation, which would remain under the NBA system, in which
everyone competes to lower the other's salary as much as possible.  the
ratio must be mandatory, not negotiable, as in federally regulated (and
it must be federal, to prevent capital flying from state to state).
 
further, the tier system would still, in accordance with popular
free-market principles, permit the company to determine what portion
of profits ought to be paid out in salary.  a company could, if it
was deemed necessary, lower wages to free more capital for reinvestment.
only it would have to lower _everyone's_ wages.
 
-dave
 
 
Newsgroups: talk.politics.theory