Via marshallbrain.com - What if every worker in the United States got paid minimum wage for the work they do?
It doesn't matter who you are or what you do. Whether you are working in McDonald's mopping the floor or you are the CEO of McDonald's. Whether you deliver the mail for the President or you are the President of the United States. No matter who you are, you make $5.15 an hour for the work you do, and everyone's total income is capped at $11,000 per year. What would happen if we did that?
The reason why we might choose to do that is because the wages of most workers are headed in that direction anyway. Corporations all over the nation have been pushing worker wages down to the minimum wage level:
We all know about the burger places. They have created a burger assembly line where millions of restaurant workers now make minimum wage.
In the 1990s, HMOs started pushing the wages paid to physicians downward for the first time ever. Minimum wage can't be far away for doctors.
Southwest Airlines built a new discount travel model by paying pilots and flight attendants less than industry norms for the work they do. Now the whole industry is following Southwest's lead because they have no choice if they want to compete. Wages across the airline industry are falling. Once that becomes the norm, someone else will come along to beat Southwest and cut wages again. Many commuter airline pilots make near minimum wage already. It's just a matter of time before everyone in the airline industry is making minimum wage.
Wal-Mart took away business from the small town downtown and hired all those store owners for minimum wage.
Wages everywhere are under pressure and headed toward minimum wage anyway. Why don't we simply short circuit the process and take everyone down to minimum wage now, in one fell swoop? It would be a lot less painful that way. And let's include CEOs, executives and politicians in the process. If a major corporation cannot afford to pay a clerk more than minimum wage because of pressure from competitors, then there is certainly no way the same corporation can afford to pay the CEO and other executives $10 million a year. The practicalities and realities of our business environment should apply to every part of the business, not just to one segment of the workers. Everyone, from the CEO on down, should make minimum wage to maximize the corporation's competitiveness.
No one is spared: The president of the United States, all the politicians and bureaucrats, CEOs and executives, business owners, lawyers, doctors and dentists… everyone. If you get a paycheck, you get minimum wage. No exceptions.
What would happen if we did that?
Perhaps most importantly, it would save the economy a lot of money. According to the New York Times Almanac, businesses hire 105 million people per year and pay them just over $3 trillion per year (the figure does not include government employees), for an average wage of roughly $30,000 per year. At $5.15 an hour and 40 hours a week, all 105 million of these employees would start making a uniform $10,700 per year at minimum wage. By doing that, the $3 trillion figure would fall to $1 trillion. The economy would save $2 trillion every year. The drop in prices would be spectacular, because $2 trillion represents $20,000 per U.S. household. Something that costs $10 today might see its price drop to $4.00 or less. Even though we would all be making minimum wage, that wage would buy far more in the economy than it does today. Everyone in the country would be able to live a comfortable middle class lifestyle.
What would happen to highly paid people like TV/movie stars, corporate executives, sports stars, radio personalities and so on? Their salaries would go from millions of dollars a year to $10,700 a year. Would it be a catastrophe? No. In all likelihood, absolutely nothing would happen. Is Rush Limbaugh going to give up his soapbox if he got paid less? Probably not. I imagine he likes the fame and influence his show gives him. He is going nowhere. Are Peter Jennings, Dan Rather and Tom Brockaw going to quit? Probably not. They like the fame too. The stars of popular TV shows? No… they cannot get into the best restaurants, have adoring fans or get Emmy awards unless they appear on their shows.
But if they do quit, it is not a problem. Johnny Carson left the Tonight Show, and we got Jay Leno. It was not a catastrophe. If Dave Letterman leaves Late Night because he does not like the pay, we'd get another host. It would be OK. There are thousands and thousands of people who would love to have Dave's, Rush's or Jay's jobs.
Would CEOs leave? Maybe. But if they are good CEOs, they love what they are doing building companies and leading people. If they don't want to do it unless they get paid $15 million a year, that probably tells us something about them. We probably don't want them leading a company anyway if they are only in it for the money. If we replace them with people who actually care about the job and the company, we would all be better off. We could have completely avoided Enron, Worldcom, etc. and the resulting stock market collapse if we had had good, honest people filling the CEO roles in those companies.
As you start to think about this new minimum wage reality, you begin to realize something. Most people -- especially the ones who are highly paid today -- would stay in their current jobs. The perks of fame and power would keep them there. So here's the question: Why isn't supply and demand governing the pay of CEOs, TV celebrities, sports stars and supermodels, driving their wages down just like everyone else? (Full Text)
It doesn't matter who you are or what you do. Whether you are working in McDonald's mopping the floor or you are the CEO of McDonald's. Whether you deliver the mail for the President or you are the President of the United States. No matter who you are, you make $5.15 an hour for the work you do, and everyone's total income is capped at $11,000 per year. What would happen if we did that?
The reason why we might choose to do that is because the wages of most workers are headed in that direction anyway. Corporations all over the nation have been pushing worker wages down to the minimum wage level:
We all know about the burger places. They have created a burger assembly line where millions of restaurant workers now make minimum wage.
In the 1990s, HMOs started pushing the wages paid to physicians downward for the first time ever. Minimum wage can't be far away for doctors.
Southwest Airlines built a new discount travel model by paying pilots and flight attendants less than industry norms for the work they do. Now the whole industry is following Southwest's lead because they have no choice if they want to compete. Wages across the airline industry are falling. Once that becomes the norm, someone else will come along to beat Southwest and cut wages again. Many commuter airline pilots make near minimum wage already. It's just a matter of time before everyone in the airline industry is making minimum wage.
Wal-Mart took away business from the small town downtown and hired all those store owners for minimum wage.
Wages everywhere are under pressure and headed toward minimum wage anyway. Why don't we simply short circuit the process and take everyone down to minimum wage now, in one fell swoop? It would be a lot less painful that way. And let's include CEOs, executives and politicians in the process. If a major corporation cannot afford to pay a clerk more than minimum wage because of pressure from competitors, then there is certainly no way the same corporation can afford to pay the CEO and other executives $10 million a year. The practicalities and realities of our business environment should apply to every part of the business, not just to one segment of the workers. Everyone, from the CEO on down, should make minimum wage to maximize the corporation's competitiveness.
No one is spared: The president of the United States, all the politicians and bureaucrats, CEOs and executives, business owners, lawyers, doctors and dentists… everyone. If you get a paycheck, you get minimum wage. No exceptions.
What would happen if we did that?
Perhaps most importantly, it would save the economy a lot of money. According to the New York Times Almanac, businesses hire 105 million people per year and pay them just over $3 trillion per year (the figure does not include government employees), for an average wage of roughly $30,000 per year. At $5.15 an hour and 40 hours a week, all 105 million of these employees would start making a uniform $10,700 per year at minimum wage. By doing that, the $3 trillion figure would fall to $1 trillion. The economy would save $2 trillion every year. The drop in prices would be spectacular, because $2 trillion represents $20,000 per U.S. household. Something that costs $10 today might see its price drop to $4.00 or less. Even though we would all be making minimum wage, that wage would buy far more in the economy than it does today. Everyone in the country would be able to live a comfortable middle class lifestyle.
What would happen to highly paid people like TV/movie stars, corporate executives, sports stars, radio personalities and so on? Their salaries would go from millions of dollars a year to $10,700 a year. Would it be a catastrophe? No. In all likelihood, absolutely nothing would happen. Is Rush Limbaugh going to give up his soapbox if he got paid less? Probably not. I imagine he likes the fame and influence his show gives him. He is going nowhere. Are Peter Jennings, Dan Rather and Tom Brockaw going to quit? Probably not. They like the fame too. The stars of popular TV shows? No… they cannot get into the best restaurants, have adoring fans or get Emmy awards unless they appear on their shows.
But if they do quit, it is not a problem. Johnny Carson left the Tonight Show, and we got Jay Leno. It was not a catastrophe. If Dave Letterman leaves Late Night because he does not like the pay, we'd get another host. It would be OK. There are thousands and thousands of people who would love to have Dave's, Rush's or Jay's jobs.
Would CEOs leave? Maybe. But if they are good CEOs, they love what they are doing building companies and leading people. If they don't want to do it unless they get paid $15 million a year, that probably tells us something about them. We probably don't want them leading a company anyway if they are only in it for the money. If we replace them with people who actually care about the job and the company, we would all be better off. We could have completely avoided Enron, Worldcom, etc. and the resulting stock market collapse if we had had good, honest people filling the CEO roles in those companies.
As you start to think about this new minimum wage reality, you begin to realize something. Most people -- especially the ones who are highly paid today -- would stay in their current jobs. The perks of fame and power would keep them there. So here's the question: Why isn't supply and demand governing the pay of CEOs, TV celebrities, sports stars and supermodels, driving their wages down just like everyone else? (Full Text)
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