Alan Weiss’s Monday Morning Memo® – 06/10/2019
Capitalism is a fine system for generating wealth, but it’s not one that automatically distributes it well. We once compensated for that with extended families, religious communities, government safety nets, pensions, and so forth. Not so much anymore.
I read this weekend that the minimum wage requirements in New York State place recipients at twice the official “poverty level.” It’s hardly a fortune, I think about $35,000 as compared to $15,000. And the minimum wage laws were originally intended to be transitory, helping people who were between jobs or working part-time while attending school or helping their families.
I’ve always believed that all people deserve an equal starting line and a level playing field, though not a guarantee of winning the race. I have no issue with entrepreneurs who start their own companies making a fortune, given the risks and talent involved, whether Bill Gates or Oprah Winfrey (who are both highly generous). But I do question paying a hired executive of a public company $100 million and more, which is what the top earners are now receiving. In fact, I’m wondering about a lot lower paychecks than that, because there isn’t a direct correlation between executive pay and company performance. Mark Hurd of Oracle collected $84 million recently for non-stellar performance, for example.
Does a CEO making $50 million do twice the job of one making $25 million? Especially when the average pay in the company is $34,000? I believe in capitalism, but I also believe in rationality.
“The world isn’t fair, Calvin.”
“I know Dad, but why isn’t it ever unfair in my favor?”
― Bill Watterson, The Essential Calvin and Hobbes: A Calvin and Hobbes Treasury