Maximum Wage
Steven Johnson
53047

This is a very interesting concept, though I can’t help but wonder about the distinction between a maximum wage and a heavily progressive income tax.

While many of us in the tech industry think about the white collar jobs, there’s a secondary invisible class of employee (often contractual) that serves the meals in tech company cafeterias, that cleans the desks and restrooms, that transports employees to and from work, that maintain safety and security of the company and its employees. These jobs, not infrequently non-union minimum-wage jobs, still represent an important role in the structure of the efficient operation of a company. Would this maximum wage be tied to, essentially, the minimum wage—thereby setting the range of pay at an organization to be $15–$600/hour, or do companies simply game the system by removing low-wage employees (either through automation or independent contracts) in order to allow for higher top wages?

It seems a highly progressive income tax accomplishes the same sort of goal that you’re positing, but invests the difference back into the public sector, rather than the company. There’s a sharp distinction between those two outcomes, and one might easily draw political lines precisely there. For example, a 0% income tax rate on SF minimum wage nets $31,200. A 90% income tax rate on incomes over $10 million would still net a wage about 40x higher, but also bring in $9 million to the public sector.

I find it hard to get behind Graham’s idea that the primary motivation for doing good in the world is the opportunity to get rich…they’re not mutually exclusive, but they often lead to decisions that may benefit a business but that don’t intrinsically benefit society. Frankly, the opportunity to earn $1 million/year is plenty motivation for those who are driven by money—the fact that it’s not $10 or $1000 million doesn’t reasonably seem to be a reason someone would give up a great pursuit.

That said, taxation seems to be the best means we’ve found so far for ensuring that money makes its way back to supporting the great institutions that define and support the great privilege and opportunity of a first world nation.

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