Would you support a maximum wage ?

Great Debates
41

Not so fast…Markets are more complicated and less ideal than are dreamt of in your philosophies. (Sorry to butcher a little Shakespeare). If the other technologies are contributing to problems like global warming and pollution and there is no action taken to put these external costs into the commodity in the form of a tax, then these other technologies are effectively being subsidized which may be why less-environmentally-destructive technologies can’t compete. Then there are the problems of market barriers, such as the realization of economies of scale and so on.

Blind faith in the omnipotence and omniscience of “free markets” is no less of a religion than blind faith in anything else.

42

In general, insurance is designed to guard against unforseen losses. YOu pay less than the cost of the loss because it gets spread out over very large numbers of insureds.
What you have in health insurance is someone with a forseeable loss. If you come to me with cancer, and I know that I am going to pay $100,000 im medical bills over the next year, how can I charge you only $5,000? Well, the only way to do that and stay in business if I get the other $95,000 from either the government or other policy holders. It is like getting car insurance with the knowledge that your car is already stolen.

I am pretty sure that for most of human history, we did not have health insurance. It is not a need. IT is preferable to have it, but not necesary. To protect against people dying in the streets, we have medicare and medicade and anti-dumping laws. But I hijack.

One of the reasons I am motivated to work is for health insurance. IT is the only reason one of my employees works at all. Once you start giving away everything that people want, you not only take away the incentive to work, but you also punish those who continue to work hard anyway. If I have to pick up your salary shortcomings as well as your healthcare, I am going to have to work harder for less.
Try training your dog this way. Give him everything he wants, then reward him for not following commands and take away his gfood when he does follow them.

43

Health insurance is impacted by two things:

1 - Controlled supply. Doctors have to pass all kinds of tests and go through a tremendous amount of training, so the supply of them is always going to be somewhat limited by these factors. Given that, the price will always be expensive.

2 - A large subsidized market. The demand side is subsidized through tax-free corporate health insurance plans. These corporations can expense the cost of the insurance for the piece that they pay against their taxes, while the piece paid for by the employee comes off his income as a before-tax adjustment; it isn’t even subject to Social Security or Medicare tax. This takes away a lot of the incentive to compete on price. It also heavily victimizes the self-employed and those who work for employers who don’t provide health insurance.

The problem today is that we have a semi-socialized system being defended by right-wing ideologues as if it were a pure free-market system, which it simply is not. If it were, the price inflation we see in the health market simply wouldn’t exist.

44

Umm, me and my wife make almost $100,000 a year (before taxes) and we are always short on funds. True, this is combined income, but if we had a baby she would either have to quit or start paying several thousand a year in day care. We don’t live a very rich life, we have two cars, a 10 year old Honda Civic with 185,000 miles on it and a recently purchased 2001 Honda Civic, we live in a 3 bedroom apartment in a middle-class neighborhood ($995 a month). I’m sure if we lived in a small town we could live a lot better, but we would also have to spend more time commuting, neither of us could make what we are making now outside of a large city.

I’m against a maximum wage, there is no good reason for one and I am sure it would inhibit our economy. A lot of rich people work hard for their money, at least the ones who are making a wage and not living off of inheritences or trust funds. They generally work in important jobs, do we want them to not work as hard?

45

“…at least the ones who are making a wage and not living off of inheritences or trust funds.” :rolleyes:

Nice comment above Mr. Z on training the dog. “Good businessman. Now, keep producing, keeeeep producing.” Some day the magic bag is gonna be empty and everyone will wonder what happened.

46

The problem with solar and wind power is that it is unreliable, expensive to maintain, and does not generate nearly enough energy. To equal the output of a single coal, gas, or nuclear powerplant, you would have to blanket the landscape with thousands of windmills or solar panals (not exactly great for the environment).The chemicals that go into making the solar panels and batteries used to collect the energy are also harmful to the environment. So obviously, solar and wind power are not 100% clean.

In any case, I’m not an energy expert. My point was that forcing a salary cap on the entire population of the US would not create a Utopia like the OP believes. It would create a socialist nightmare of shortages, inadequate housing and even worse healthcare.

47

jshore, you’re better than that. It isn’t a matter of blind faith, at least not from where I stand. :wink:

48

[QUOTE]
Originally posted by nowalls99 *
**
[QUOTEWhile I don’t completely agree with Mercutio, I am in favor of maximum wages for certain professions. For example, professional athlete’s are limited to making $99,999 per year, doesn’t matter the sport. Actors can only be paid a maximum of $30,000 per film*[/QUOTE]

What difference does it make to you? They aren’t being paid with your money unless you attend their events. (Ignoring for a moment the subsidy provided to several pro sports teams in the form of publicly funded stadiums.) If 20th Century Fox wants to pay Julia Roberts $20 million to star in a movie, why should I care?

49

To avoid hijacking this thread too much into the pros and cons of a National Health Service, I’ll just remind y’all that this topic was covered not too long ago.

Just to remind you, my point at that time was that a government-run service is no more than a country-wide insurance scheme. In fact due to the interesting nature of health insurance (well - interesting if you’re an actuary), this is one of the few examples where running a single country-wide system is almost certainly more utility-optimal than a market-based competitive system. Insurance is not just another good, folks - something that jshore was trying to tell you. It has its own peculiarities that don’t sit well within a free market. Do I really have to dredge up again that old essay of mine on the necessity for regulation in an insurance market that I trotted out within my first few posts to this board?

Don’t forget that you need large numbers of people to buy into an insurance scheme for it to be worth running it. Furthermore, morbidity is particularly volatile, meaning that the numbers need to be larger than this type of insurance for a typical life insurance scheme.

I know that some of you will have difficulty with the idea of the government as just another large and particularly efficient (mutual) insurer - but when it comes to health insurance in particular that it how it works.

Anyway, we should really go to a new topic if we want to continue this. In regards to the OP: I’m sorry to jeopordise my position of one of Mercutio’s “Good” posters so soon ([url="http://boards.straightdope.com/sdmb/showthread.php?threadid=53944"here is a shameless plug), but I must join the throng and similarly align myself with the evil free-marketers I usuall side against, declaring that a cap wouldn’t work for the reasons already described. An extremely penal tax in excess of, eg $10,000,000 p.a. might though (98% anyone?).

pan

50

(here is a shameless plug) even. Although since this is hijacking a hijack this really must stop here. I forbid anyone to click.

pan

51

That might not be as disastrous as a $100,000 cap, but there would still be the problem of a great many rich people moving to foreign countries, or finding ways around the tax.

Personally, I think that our social policy should be based on helping those in need and getting the necessary money in the fairest way possible, rather than simply reducing the gap between rich and poor.

52

The OP is based on an incorrect premise.

If you put a cap on wages (including income from other sources?), and then start deciding how you will spend the left over money, you are missing the point.

There won’t be any left over money.

If the government makes a law that no one can earn over $100K per year, several things will occur.

  • Tax revenues will decrease by more than half. Rich people pay most income taxes. Good luck finding $1.7 trillion off the middle class for your government subsidies.

  • When someone approaches the $100K per year limit, he or she will take one of two approaches.

    • Take all further compensation in non-taxable benefits.
    • Not work any harder than they perceive to be necessary to hit and stay at the $100K mark. Maybe some engineer has an easy way to make solar power economically feasible, but it will take about six months more work. What is the payoff for him? Nothing, he already makes his $100K. It will have to wait, while he goes fishing. You have the next generation in operating systems, one that will blow Windows out of the water and make PCs that can design fertilizers that feed the world. Why bother? You won’t be any better paid than you are now.

Sorry, but this is based on the misconception that there are two prices for anything - what you can get for it on the open market, and what it “should” cost. The second price is a fantasy. My labor is worth whatever I can convince someone else to pay for it. If I can convince someone it is worth more than $100K, I can also find a way to get him to pay it. If I can’t find a way, whatever will increase the marginal value of my labor over $100K disappears. So do the taxes on it (your “leftover money”).

Welcome to the real world.

53

It’s also worth noting that the transition to the “salary cap” would likely cause a recession, or even a depression.

To illustrate, in the town in which I live, perhaps 25% of the homes were purchased for over $600,000. The mortgage payment, taxes, and insurance on such a home would make it difficult or impossible to keep up with the payments on only $100,000 of income. Thus, a lot of mortgages would be thrown into foreclosure if a salary cap were implemented.

Now, you might think, who cares about the rich - let them move somewhere cheaper, but consider that a big wave of foreclosures would threaten the solvency of many financial institutions.

Consider also that in the presence of a “salary cap,” many people would do their own yard-work, cleaning, and child-care instead of hiring others. This may sound like a nice idea, but it would put many many landscapers, maids, and nannies out of work. Many of these people, in turn, would default on THEIR obligations, causing further economic distress.

You can bet that a “salary cap” would have many of these unintended consequences and cause a LOT of economic dislocation.

Personally, I think we should leave “bad enough” alone.
These grand schemes to bring about utopia invariable have serious unintentional negative effects, IMHO.

That said, I must say that I have lived in the NYC area, which is very wealthy and has tremendous disparity in wealth; and New Hampshire which is much more egalitarian (but much poorer). I must say that New Hampshire has a lot to be said for it – in many ways, it’s a much nicer place to live. I’m just skeptical that we could turn NYC into NH through legilative fiat.

54

Another issue to consider: The maximum wage , if it applied only to a strict definition of wages, would have no effect on people who earn their money through the stock market. On the other hand, you could make it apply to stock market gains as well, but then people wouldn’t have any reason to invest in top-performance stocks.

55

Okay, already! How dead are y’all gonna beat this here horse!?! I mean, if even commie pinkos like me think it is a bad idea, what is there left to argue?! I tried to turn the debate more toward issues of progressive taxation, etc. but I guess that didn’t take!