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Wage ceiling

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The dismal science
Economics
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Economic Systems

  $ Capitalism
  $ Communism
  $ Socialism

Major Concepts
People

A wage ceiling, also called maximum wage, is a system in which there is a limit to the salary one can have, and when someone receives salary, if the salary is more than the maximum wage, the surplus is taken by the government.

Positive aspects[edit]

The positive aspect of a wage ceiling would be that it might solve the deficit and could allow the government to spend more money on communist policies education, healthcare and many other social programs. One other good aspect is that the wage ceiling would allow for lower taxes on those who earn less than the maximum wage, since these taxes wouldn't be needed anymore.

Negative aspects[edit]

The most common argument against maximum wage is that, if the wealthy get a limit on how much they are paid, they'll go away, in another country. Without the wealthy, the government would lose money, there would be fewer jobs, etc.

A maximum wage would stop people to try to earn more money, because they wouldn't earn it anymore, leading to lower government revenue.

Proposals[edit]

The Green party candidate Jello Biafra proposed a maximum wage of $100,000 [1], and no tax on those who earn less. One could argue that in case of a mass emigration by the wealthy, the government would take a long time to recover from the deficit. Also, it the $100,000 maximimum wage is possibly too low. The French politician Jean-Luc Mélenchon proposed a maximum wage that would be 20 times the median wage in his platform for the 2012 presidential election [2], but never talked about it again in the next election.

Similar ideas[edit]

A similar idea is to limit the gap between CEOs and employees. The city of Portland had a similar idea, as they decided to put a surtax on corporations where the gap between employees and CEOs is more than 1 to 100.[3]

References[edit]

  1. https://ianbone.wordpress.com/2014/01/20/jello-biafra-on-the-maximum-wage/
  2. http://www.liberation.fr/france/2011/09/12/melenchon-propose-le-smic-a-1700-euros-et-un-salaire-maximum_760707
  3. https://www.theguardian.com/us-news/2016/dec/08/portland-oregon-ceo-pay-tax-passes-income-inequality