We all know about minimum wages. They should provide enough to live on. But what about maximum wages? It might not be such a crazy idea.
Data compiled by the Canadian Centre for Policy Alternatives shows average pay for Canada’s top CEOs reached $8 million in 2012. That’s 379 times what a minimum wage worker is paid.
Canada’s highest paid CEO, Hunter Harrison of Canada Pacific Railway, received $49.1 million in 2012—more than 2,300 times what minimum wage workers were paid. CEO salaries have increased by 73 per cent since 1988, compared to just 6 per cent for average workers’ wages, and those numbers account for inflation.
The idea of a maximum wage isn’t new. During the Second World War, U.S. President Franklin Roosevelt proposed a maximum salary of $25,000 (about $350,000 in current dollars). It wasn’t enacted, but the U.S. and Canada did introduce progressive tax rates of up to 90 per cent on top incomes through to the 1970s. These changes didn’t hurt the economy either. Rather, this economic period is often considered the “golden age of capitalism,” where economic growth and productivity were much stronger than our current age of corporate greed.
The proposal was revived in the 1990s by U.S. labour activist Sam Pizzigati. He proposed that the richest and most powerful would have a vested interest in raising the wages of the lowest paid, instead of stomping on them.
A proposal to cap the pay of executives at only 12 times the pay of their lowest paid workers gained enough support to be put to a referendum in Switzerland late last year. It was defeated by about 65 per cent to 35 per cent, but the level of support was not insignificant.
At least the Swiss are putting the question to the people.