Sunday, February 1, 2009

Missouri Senator Suggests

Let's Pass a Maximum Wage

Sen. Claire McCaskill (D-Mo.) Friday called Wall Street executives “idiots” for using taxpayer money to pay out $18 billion in bonuses, then proposed that compensation for the employees of all bailout recipients be capped at $400,000 per year.

A columnist for The Washington Independent, Daphne Eviatar, thinks McCaskill didn’t go far enough. Eviatar proposes that $400,000 be the maximum salary for all executives. After all, it’s still more than our president makes a year. You can read her logic here.

Most people think it’s greed that has driven salaries and compensation packages of corporate honchos into the billions. It’s not greed so much as ego. They are reaping more money than they can ever spend, but money can’t buy them love.

They figure, however, if they make more than the next CEO, it can get them respect.

Their behavior is about as mature as spoiled sports personalities like Manny Ramirez or Terrell Owens. Performance statistics are no longer the measurements by which athletes compare themselves. It’s now all about salary. Every year, some baseball team owner is dumb enough to pay a journeyman pitcher with a 14-12 won-lost record and a 4.25 ERA upwards of $12 million a year over four years. And then every pitcher who has a better record will demand a bigger salary. It keeps escalating. Superstars aren’t super unless they are signing super-sized contracts.

The same applies to corporate superstars. Even when they have an off year, they still get bonuses. They need top dollar not to stick around with the company that hired them, but to make them feel as if they are leaders of the pack of the alpha dogs that have been ripping apart the flesh of Western capitalism.

People that insecure really shouldn’t be running big companies. There are some large companies in the U.S that limit executive compensation to a reasonable amount, such as Whole Foods, whose top execs cannot make more than fourteen times the wages of the lowest paid workers. (According to the AFL-CIO, the average CEO earns 360 times the wages of the average employee in the same company. European CEOs make roughly half of their American counterparts, and Japanese CEOs just ten percent. Somehow the companies based in Japan, Germany, Sweden and other enlightened nations compete very well with U.S.)

And it turns out, the more an executive gets paid, the worse his or her performance.

Like power, money corrupts. Or as the Bard of Hibbing sang, “Money doesn’t talk, it swears.”

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