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Floyd Elliot Headshot

Let's Have a Higher Minimum Wage -- and a Lower Maximum Wage

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Conservatives love incentives. Let's pay a top executive 1800 times what a worker makes... because incentives! Let's tax capital gains at half the rate we tax worker's pay... because incentives! Let's eat poor people's children... because delicious! And... incentives! (Okay, Jonathan Swift beat me to that one by two centuries, but before 2013 ends I expect it to become a Tea Party meme.) (Honestly, it gets harder to write satire every day: yet another reason to hate right-wingers.) (Like I need another one.) Apparently, though, incentives don't work on poor people, at least according to those very think-y conservatives. If today's minimum wage of $7.25/hour barely makes the person earning it better off than a person on aid, conservatives think the solution is not to raise the minimum wage, but to cut off even the minimal aid poor people can get after twenty years of both Democratic and Republican assaults on welfare. Because socialism!

The problem with these incentives is that their right-wing champions rarely think about what they provide incentives for. What kind of behavior do they create? Taxing investment income lower than working wages gets you a bunch of Wall Street douches crashing the world economy -- over and over again -- and getting tax breaks for it. (Not to mention a bailout when their idiotic Ponzi schemes turn out to be... what's that word? Oh, right: idiotic. And Ponzi schemes.) Could I get a tax break when I crash my car? Because I do not drive well, especially when I drink. A commenter on one of my earlier posts suggested -- rudely and with the certainty of someone who has given the matter little thought, in classic Internet commenter style -- that investors get tax breaks on investment profits because they take risks. Well, sure, and we all know that cops, firefighters and inner-city teachers take absolutely no risks at all; they live sedate secure existences free of any anxiety. Even apart from the difference between risking your life and risking your (well, other people's) money, do we want Wall Street to take those risks? How about we ask all those people who lost their houses, instead of just off the top of my head Rick Santelli or Jim Cramer? Indeed, let's never ask those two morons anything ever again.

A study co-authored by Nobel-prize- winning psychologist Daniel Kahnemann showed that the lower your income, the more an increase in income means to you and your happiness; over about $75,000/year (in 2010 dollars), an extra dollar means virtually nothing. So raising the minimum wage will actually provide far greater incentive to those on the lower end of the pay scale than raising the wages of CEOs would -- and for far more people. Opponents of raising the minimum wage argue that a raise will increase prices and raise unemployment, but a dollar in a low-wage worker's pocket makes those low-wage workers both happier and more productive (because incentives!), and also creates demand for products. Poor people spend their money on food and rent -- goods and services -- revving up the economy; rich people sock an extra dollar away in savings and investments, where, in an economy with essentially no borrowing costs, it does no one any good except bankers, for my feelings on whom, please consult my monograph in The Economist, "Let's Run All the Bankers Over With Their Own BMWs."

But even if I'm wrong (and I can't remember the last time I was, but then I also can't remember what I had for breakfast this morning) (Pop-Tarts, maybe?) (no, that's wrong), and even if raising the minimum wage lowers revenues, we have an easy way to cut costs to make up for those lost revenues: impose a maximum wage. JC Penney's ex-CEO Ron Johnson, made 1,795 times what the average JC Penney employee makes. (He now heads up The average American CEO makes 230 times what the average worker does, as compared to the average Japanese CEO, who makes only 16 times what the average Japanese worker does. So, I propose that we impose a 100 percent tax on all executive wages and income over, oh, let's say 20 times what the average worker earns -- oh, hell, let's make it 25 times. You CEOs go buy yourselves another Bentley, on me. (Well, on all of us.) Let's call this the maximum wage. Or you could call it the Elliot wage, because of how I like to put my name on things, a habit that has in the past served me well, as I have never found myself at a loss for underwear.

Under the maximum wage, companies would be free to pay their executives whatever they want -- those executives would just never see that money. Those taxed-away executive wages would go directly to the employees of the company earning less than the average, with some skimmed off by Uncle Sam to pay down debt or for our next insane war on an abstract noun or possibly to buy puppies for disabled children. Are you for the maximum wage, or are you against puppies for disabled children? Do you favor cute puppies, licking the sad disabled faces of sad disabled children, or more money for rich douchebags who will only spend it on cudgels with which to beat their servants? This might not be the popular stand, but I say: give me more cute puppies and less servant-cudgeling.

"But paying CEOs gobs of money makes them better CEOs and makes the company profitable!"

Yeah, you'd think so, but not so much. As a matter of fact, research shows that the more you pay a CEO, the worse the company does. So by limiting executive pay, the maximum wage will help shareholders. You're welcome, shareholders, most of whom have far more money than me. Please feel free to tip me lavishly. I have an expensive yogurt-covered-peanut addiction, and I'm not paying for it with my writing.

Sure, the right-wingers will decry this idea as socialist, and for once they'll be right, but they've so devalued that word by applying it to our center-right president and his timid tepid (but still better than the status quo) health care plan (one that they themselves came up with, then disowned when Obama proposed it) that only they themselves and their media at Fox News care anymore when they deploy "Socialist!" in their (default) attack mode. Plus, the idea has a visceral appeal. Economic justice, reviving the floundering economy and helping the beleaguered American middle class are all very well, but a maximum wage will do what we all dearly in our heart of hearts most want to do: stick it to the boss.

(Not my boss. He's awesome. Hi, Kevin! Love to the wife and kids!)

Also, did I mention the cute puppies? Because they are awful cute.