Friday, April 25, 2014

Killing the Maximum-Wage Myth

Mises Daily: Wednesday, April 23, 2014 by Julian Adorney

As Bill Maher indicates, the issue of a maximum wage is one that simply will not go away. The comedian and liberal pundit recently expressed support for a maximum wage of $300,000, arguing that wages for the bottom 90 percent of Americans stagnated while worker productivity rose. Greedy executives, in Maher’s scenario, are robbing the worker and seizing more than their fair share.

There are several problems with this claim.

First, wages haven’t stagnated; that claim rests on aggregate numbers and fails to account for several key factors, as explained here by economist Don Boudreaux. So already, one should be skeptical of any conclusion Maher comes to based on his faulty data. But even if it were true, that wouldn’t be a compelling argument for a maximum wage.

 As economist Lawrence Reed argues, executives aren’t necessarily overpaid. He admits that some are; those with strong political connections or whose boards are lazy rubber stamps. But, he points out, “there are others whose contributions are worth more than they are paid; they may be underappreciated by their boards.” Like other underappreciated employees, they may eventually leave for greener pastures.....To Read More.......

My Take - First of all - I agree that most CEO's are grossly overpaid, and their golden parachutes are obscene - getting millions for failing - but so what? It's the height of hubris for government to tell a company how much they should pay the boss. Its bad enough they're telling them what the starting salary must be as in minimum wage, and I guess this is the next logical step for an illogical system.  However, we need some clarity!  It's not the governments company, it's not the government’s money, and it’s none of their darned business.  And Maher is a blithering idiot! I'm amazed anyone still watches him.

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