Vince Cable says 'no-one needs to earn £1m a year'

Discussion in 'Opinions, Beliefs, & Points of View' started by Xaos, Mar 22, 2014.

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  1. Xaos

    Xaos Well-Known Member

    At least some politicians have the courage to speak about the ridiculous inequality in this country, problem is, unless you can get global support for implementing a 'maximum wage' then businesses will just move to the countries without the restrictions. I'm not against there being some level of inequality, all men are not created equal, it's just that the level of inequality should not be at such absurd levels as far as I'm concerned.
  2. youRprecious!

    youRprecious! Antiquities Friend

    Agreed. (no pun intended!)
  3. JmpMster

    JmpMster Have a question? Message Me Staff Member Forum Owner ADMIN

    What about 900,000? of 500,000? or 200,000? Where do you decide does not need more and what house and cars and properties somebody can own? And does that mean that these people should only work 6 months of year or 20 hours a week instead? Or simply that there skills are not needed at all so they should not use those skills? Or that they should use more work and greater skills but simply receive the same compensation as somebody that does not work as much and does not have the skills? In which case they simply would not bother and the world would not benefit from these skills at all.... Certainly would be nice to have a high end high paying CEO type job but not have to deal with the stress of that - so I guess if we do not pay them (it is an open market- nobody is forcing anybody to pay them that - they have the option of hiring somebody else for much much less ) then we can expect them to give no more thought or care to that work then somebody stocking shelves even though their decisions effect thousands or hundreds of thousands of people if the company fails and they go bankrupt. But lets not pay them that and have them put the same thought as goes into how many boxes of cheerios go on the front shelf.

    Their is a maximum wage - the wage that anybody will pay for a skillset you bring. If you were not worth that or if you prove yourself undeserving you will soon be unemployed. Even with athletes and actors - they pay that because that is what produces a film or show people want to watch. No, I do not believe in random caps of high limits - if somebody will not pay it then they are worth it. These are not "things" like water where people have to pay to live - these are jobs- if they can find better for cheaper they will - hence the contract disputes with athletes and with TV series and there stars - in the end the people worth it are paid and those that are not lose the job - it is already controlled. I promise you as soon as you make a maximum salary for any group , they will be instituted for everybody - then everybody will be paid same regardless and the fact is not every body works equally hard or has equal skills - but everybody thta could work harder and do better will lose all incentive to do so.
  4. Twocky61

    Twocky61 Banned Member

    Why do footballers & so called celebrities earn obscene salaries when nurses police & people with real jobs onlyearn a fraction? THe former are often uneducated phlebs whereas the latter are intelligent people who should be paid the proper salary for the work they do - obviously inteligence does not equate to a well paid job whereas any thicko who happens to be good at kicking a ball or so called 'acting' (celebrities hardly act they just appear ) earn far more
  5. Freya

    Freya Loves SF Staff Member ADMIN SF Author

    Intelligence is just a different kind of talent than acting or kicking a ball. Footballers and actors get paid so much money because they bring equitable amounts of money to the people paying them; the actor that brings more viewers to the box office makes the film company more money and are therefore worth more.

    I think it is really very rude to describe "any thicko who happens to be good at kicking a ball" and imply they are not hard working or worthless; I taught a young lad who did 5 days of school lessons crammed into 3 days then spent the remaining 4 days training very hard with a premier league football club. He gave up his entire childhood to train and hone his skill. It is not "happens to be good at kicking a ball" - it is committing to training and developing a talent to the exclusion of a normal life and then entering into a career that has a shelf life of under fifteen years and is often so physically taxing to keep the body at peak fitness in that way that it shortens life expectancy as well. The kid in question passed all his exams with flying colours. Because he chose to pursue a passion and talent that millions of people pay to go and watch doesn't make him any less of a person.

    Do I think nurses and policemen etc are underpaid? Yes. Do I think that people who generate a huge amount of income for the people paying them should be paid less just because some people consider their talents to be worth less? No. Equally it is reasonable to say that there are very few people who are as good at "kicking a ball" as premier league footballers and a great many who could be policemen or nurses if they chose. In the same way that diamond costs more than glass - worth is sometimes to do with the rarity of something as much as the usefulness of it.
  6. Xaos

    Xaos Well-Known Member

    The way I'm looking at it is that if you took the dumbest and lowest paid person, with for example, an IQ of 50 and a pay of £10k a year (minimum wage is more like £13k a year, but I'm using £10k to make it simple), and the most intelligent and well paid person, with for example, an IQ of 150 and a pay of £1m a year (there are many people paid much more as well, just keeping it simple again) the difference in intelligence is only 3 times, whereas the pay level difference is 100, that just don't seem right to me, but I guess we'll just have to agree to disagree. :)
    Last edited by a moderator: Mar 22, 2014
  7. Event_Horizon

    Event_Horizon SF Supporter

    Vince cable warned of the crisis before it even occurred and even took Brown to task on it. All the good it did. Greed run amok and these bonuses are a serious piss take considering it is you and your children, if you have any, that are shouldering the burden of too big to fail. But let me clarify first.

    I have no issues with various people earning one million or more a year if they earned it. A arbitrary maximum wage is not helpful to any one, it will cause more issues than it would apparently solve. The reason actors and athletes get paid more is because they fill more seats, more money, higher pay off. Both those jobs are actually hard in their own ways. A Hollywood style studio earns more than a hospital or even the police service can hope to ever come close to. Stadiums and merchandise bring in a lot of bread as well. If certain sport stars and celebs fill more seats sell more mags and overpriced Chinese sweat shop made sport kits, so be it. To keep these stars of profit doing what they do they get paid more, especially when they realise they are invaluable.

    What I have issues with is the entire financial sector that is behaving like a Mafia cartel that have lobbied hard curried favour and bought government policy, thriving at our expense! I mean that quite literally. Much of the austerity is because we had to bail out those that gambled with our lives and money and allowed debt to seem normal. Even while on welfare I was being offered lines of vast amounts of credit with no hope of being able to pay it back! That in of itself is insanity. A rather tempting insanity if your boiler has broken or school peer pressure means your kid need the latest thing so they are not bullied.

    Even when they knew and were warned this would all explode they kept on at it any way. Any one who pointed out this was all going to end horribly for most, was fired and vilified as not being positive. An end to boom and bust they all cried.

    What is outright insulting about these bonuses is that you bailed them out. They made horrific losses. They were given even more of your money with instruction to loan to small start up businesses in the hopes of getting business working again and employment up. Did they do that? No, in fact loaning fell even more. They also raised their various fee's and did their damnedest to get out of paying back what was owed when certain behaviours were shown to be illegal. You are technically share holders in some rather large banks. Yet you have no power or say. The mood of the country is these bonuses are an absolute insult while people watch their wages freeze, pensions raided and their children go without shoes.

    If a business has to keep taking out more and more loans to continue to survive I can assure you a bank will not be looking at it as a success. So it is absolutely absurd of the various banking cartels turning round and saying they have been successful so deserve their bonuses. That is absolutely laughable. Of course they are successful they socialised all their losses onto you and your children and left us with a legacy of up to 2018 worth of austerity.

    If you want to understand it all you could watch this. Some stuff is missing but it is does a pretty good job. Informed people are dangerous people.
  8. JmpMster

    JmpMster Have a question? Message Me Staff Member Forum Owner ADMIN

    It has nothing in the world to do with the factor used to multiply difference in IQ - it has everythng in the world to do with the number of people able to perform a certain function and the productivity they produce. By your calculation nobody should be paid more than 100k a year which is ludicrous. The simple fact is there are 7 billion people in the world and 99% of them can do the job of the lowest paid person. More importantly than that, the efforts of those highest paid do in fact result in far more than 100x the return of the efforts of the lowest paid menial labor.

    Would you think it reasonable if I come to your place of work , and tell you what the most you can earn should be? Every person in the western world has recourse about the wage they are paid. If they believe they should be earning more they can choose to apply for a higher paying job. If nobody is willing to pay them more , then it can be fairly well established they are in fact being paid fairly. If that is minimum wage than and it is not a living wage then a valid argument may be made to increase the minimum wage possibly, but it has nothing to do with a "maximum wage". If somebody will pay them more then they can go work for the higher pay. No individual , company, or organization is any anyway obligated to pay more than minimum wage. They do for one reason - they cannot acquire the skill set they want for that amount of money. Therefore the money offered is increased until they get the skill set they want.

    If a person says they will not work for less than £1.5m a year and somebody wished to pay them that, more power to the person - I would certainly take that - sadly, I do not possess a skill set in that demand. If somebody is willing to pay that , it is because they believe they will get greater than that return on their money invested.

    People are not any different than any other commodity. In a business relationship, it is no different than purchasing a piece of machinery. Some places like a corner garage buy a car lift that costs £12k to lift a car 2 meters into the air in 10 seconds and holds it safely for the oil to be changed. A car manufacturer may buy a piece of equipment £2m that lifts 10 cars 3 meters in the air and rotates them 360 degrees in 5 seconds to install 12 parts and paint the vehicle. You can argue for days they are both just lifts, you can even say it lifts 10 cars so it should be only 10x as much, but the simple fact is one is worth far more because it is capable of doing much more and the productivity of the company overall will increase enough to justify that added cost. Nobody is making anybody pay more for that - they choose to because it is worth it to them.

    If you place an artificial high end cap , then everybody that make more than that will take the high cap, the people that were making close to that will be paid less, the next ones less , etc etc , all the way down the line to the person that was going to be offered £15k a year is now offered £13k because you have lowered the value of the entire skill line. More importantly, since none are making as much as they were before, they have no incentive to work as hard, so overall productivity and innovation goes down as well. This means the production also decreases , resulting in equal or higher cost to the end consumer despite lower cost of production.

    Aside from self righteous indignation that somebody makes a lot of money- what is the point of the argument? If it does nothing to improve value or quality of life for anybody else, what gain are you looking to get from arbitrarily deciding what the most a person is worth? Where do you get moral high ground for determining the maximum worth of a person even if it is strictly moralistic viewpoint?
  9. flowers

    flowers Senior Member

    its all about what society deems as more important. eg actors are much more important than nurses and teachers, for example. So are atheletes. I may not agree with that.But these are the collective values of the society in which I live. I do not have to agree with it. But I do have to understand that this is how our society currently operates.

    I believe that someday things will change. Greed will be a thing of the past. But until then, this is the society in which I live.
  10. JmpMster

    JmpMster Have a question? Message Me Staff Member Forum Owner ADMIN

    I am not sure I buy into the greed argument- the example given is often CEO's of these huge companies getting paid $3 million a year. Which is a lot of money and the very naive theory is that if they were not paid so much then the employees would be paid more. But look at a large company like General Motors , where CEO salary is in the $3 million range last year. They also have 550,000 employees. So if they worked for free, each employee could have been paid an extra $5.45 , enough for a donut and coffee one morning. It has not changed the lives of the employees in even a micro bit.
    Or to the consumer - where it would have cost the consumers 80 cents less per $30k car. The belief that these salaries are out of scale when you divide out output and employees - or that by reducing these salaries you will change the lives of employees or consumers is ridiculous if you look at that very simple math. If you Took every executive in GM that makes over $150k a year and paid them nothing, you could not give the other employees a pay raise of $100/ year. It would be good to reduce jealousy as well as greed , particularly when the actual real numbers show the argument to be without any merit whatsoever on what it is costing the world , the other employees, or the consumer when placed on the actual scale of size being dealt with. In the end , while you could make one person substantially poorer, you have not improved the standard of living of anybody. So it really is petty jealousy that "somebody is getting it" and has nothing to do with leveling the world economics.
  11. Xaos

    Xaos Well-Known Member


    Where does the motivation to work and be productive come from when you've already got multimillions of pounds in the bank?
    Last edited by a moderator: Mar 23, 2014
  12. JmpMster

    JmpMster Have a question? Message Me Staff Member Forum Owner ADMIN

    It clearly does since they still work otherwise there would be no discussion about paying people this money as they would not be working to be paid.
  13. DepressedDave

    DepressedDave Member

    I don't agree with your argument.

    You could enshrine into international law that all organisations - public or private - must ensure that the highest paid member of staff earns no more than 20 times the lowest member of staff.

    No one is worth more than £1 million because no one can earn that much on their own. Bill Gates doesn't build all windows computers on his own garage does he? Justin Bieber can't millions without a huge team of musicians, recorders and producers etc. David Beckham can't play football without the kit man cleaning his kit, the kitchen staff and the referee...

    You see instead of paying Bill Gates, Justin Bieber and David Beckhams millions, that money could and should be redistributed to the teams that support these people ensuring the lowest earning member of staff earns no less than 1/20th of the highest.
  14. JmpMster

    JmpMster Have a question? Message Me Staff Member Forum Owner ADMIN

    And what would the point of that be as law? Just another silly law with no merit or cause an das pointed out above - redistribution of wealth does not work as redistributing all of that CEO's salary equates to $5 / year for an employee - so it does nothing to "help" -- in fact it does hurt government and people a lot. And I really hope you do in fact mean worldwide - then your 20 times will have you living on an annual salary of several hundred dollars when we redistribute on a global basis. These feel good ideas have absolutely no basis in fact or economics- and the redistribution serves to make the lives of a very few more poor (and Bill Gates also donated over a $BILLION in charities- that all disappears as well remember, as well as the fact his entire estate has been willed to charities). The inability of doing simple math by dividing these numbers into the millions of peopel and seeing that it does not matter in the least if all of it is redistributed makes millions of well meaning people waste time trying to figure out how to destroy the fortunate few instead of spend time trying to figure out how to help the less fortunate earn more. But hey- it is easier to point fingers and call a couple dozen people names then to actually solve the issues.

    That millions is being taxed at 42% or more while that millions being redistributed in $5 chunks is being taxed at 15% or less - so the government and social programs LOSE millions in having the wealth redistributed.

    Just arbitrary redistribution has a name - it is called theft. While marginally legal as a tax, a law to say such a thing is absurd. As said before - the discussion s are born not out of greed , but jealousy.
  15. chjones21

    chjones21 Well-Known Member

    I am slightly with the idea of having a cap i.e. the CEO can only earn lets say 20 times the median wage of all the sum total of employees in his firm etc. etc. because I also think that everyone is contributing and that should be recognised.

    But on a larger scale, I think the sums make for a peculiar society of inequality … in the UK a lot of people who are in jobs that previously gave them a good standard of living are struggling and need a two parent income (for example) not so that they can buying Maseratis and all the rest but just to maintain the roof and food on the table. I do think that hard work should be rewarded so I agree with an increase in salary but perhaps there should be a limitation on it (for the good of society in general).

    I am not sure how it is connected but I do think these ridiculous salaries cause a type of poverty for the average man because they start to price the average person out of things. If there are ten houses and ten people …. if everyone is on roughly the same salary then everyone will probably have enough to buy a house - depending on how wisely or stupidly they are with their income. If the CEO has one hundred times more income he can buy ten houses by pushing up the price out of the range of everyone else and although he can't live in the other nine …. he can then rent them out or similar, to make more money and so an inequality slowly starts pushing the lifestyle of the average person further and further down. That's just a vague example but if he couldn't do that - because wages were capped then everyone would be happier (and I think feel more committed and valued to the work that they were doing).

    I also think that it stops money circulating and is bad for the economy. If there is 1000 pounds and 100 people have 10 quid each, they spend that very effectively and quickly …. and these huge billions that are sitting in the wealth of one person, it stagnates … they don't have the footfall, the time, the energy to buy in the same way that the money would be used if it was more effectively distributed. It is why IKEA has a turnover of a huge amount, ALDI or ZARA …. these companies are all directed to the less well-off but are amongst the richest companies in the world. 1 million people can spend and create and buy 1 billion pounds worth of goods per day in the way that a billionaire could never manage.

    Take away the wealth and spending power of the average and concentrate it in the hands of a few only and you can start to bankrupt your economy. A billionaire - even if it is huge by average standards - their spending of 1 million per year is nothing in comparison to what 1 million people would be spending per year if that billion was dispensed between them.
  16. Hache

    Hache Well-Known Member

    The state should not interfere with the private sector. If these salaries are a problem use the invisible hand.
  17. Xaos

    Xaos Well-Known Member

    "Plato said the income of the highest paid in society should never amount to more than five times that of the lowest paid"

    "business guru JP Morgan said no company should have a differential between highest paid and lowest paid greater than 10"

    Just thought I'd post these to show that even amongst some of the elites there has been support for the idea, hopefully they won't be written off as having "petty" jealousy. This isn't an idea that I give much passion to either, for what it's worth.
  18. Hatshepsut

    Hatshepsut Guest

    Perhaps American International Group is a United States exception to a rule of compensation proportionate to returns. Edward M. Liddy and the the rest of the executive corps at this insurance giant ran the company so far under that in 2009 it required a $170 billion bailout loan from the U.S. Treasury under the Troubled Asset Relief Program enacted to render investors whole after the financial collapse. This was almost a fifth of all the money TARP ever lent to businesses.

    Yet in that year, Liddy and other officers decided to pay themselves $165 million in bonuses (NY Times, Mar. 14, 2009), using funds from the loan disbursement as the firm was bankrupt and bereft of cash by then. A scandal erupted. The House of Representatives initially passed a 90% surtax on such bonuses, which never become part of the final TARP law but did spur Liddy to ask his colleagues to return part of their bonus money. I don't know if they followed through or not, although I think at least some of the bonus money went back to the Treasury.

    This shows me that free markets cannot always regulate prices for labor. Rank and file workers may get paid what they're worth, and no one argues the dishwasher should earn as much as the restaurateur. Rules change at the summit, where power exercised behind closed doors is exercised to defeat any will of the market. Labor markets aren't particularly transparent anyway, hardly resembling the perfect competition of small wheat growers you read about in economics textbooks. Sometimes government has to step in.

    I agree that an income cap should be imposed. It will of course have to be drawn arbitrarily, but £1 or £2 million per year for an individual payee is reasonable.
    .. :mod: .. :mod:
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