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February 6th, 2009
12:19 PM ET

A maximum wage?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/01/29/obama.fair.pay/art.obama.afp.gi.jpg caption="Obama officials reveal pay and spending limits."]

Tom Foreman | Bio
AC360° Correspondent

There are certain scenes that you can only imagine, but you know they actually happened. This week, I am certain one of the lions of Wall Street stopped in the midst of trading, put his hand on his wallet, grimaced and gasped, “I felt a great disturbance in the Force, as if millions of dollars in bonuses cried out in terror…”

Or something like that.

President Obama’s call for a half-million dollar income cap for senior executives at companies receiving bailout money has undeniably disturbed Big Money America partly because that crowd knows this is something a lot of Americans can get excited about. The equation for supporters is simple: We the taxpayers are keeping your sorry keisters afloat; you have no business pumping up your piggy banks until you pay us back.

Members of Congress are hearing that refrain repeatedly in the ocean of messages inundating the Capitol. Between the stimulus package, Tom Daschle’s taxes and this wage cap notion, they are being overwhelmed by constituents phoning, e-mailing and writing. And a precious few are saying, “Whatever you do, make sure you keep rewarding the Fat Cats!”

There is actually a philosophical argument for the concept of a maximum wage, although you don’t hear it often. Just like we decided that a minimum wage was necessary because having people work for a dollar a day was detrimental to society; a maximum wage, in theory, would prevent a handful of people from effectively cornering the market on money, and possibly tanking the whole economy in their quest for quick profits, and…uh…well…

Still, aside from the distant screams of “Socialism!” that would drown out any debate on such a concept, there are practical problems in making a maximum wage work, even in the limited form that Mr. Obama wants. First, who are we talking about? If we say “senior executives,” you can bet your left leg, that every company out there will instantly proclaim that they’ve never had such people, and never will. If we say “The CEO, the CFO, and anyone else with a C by his name,” you can bet the other leg, these companies will start handing out new, untouchable titles faster than you can flip a quarter.

It’s not like the President is asking them to get cardboard signs and cups to work the morning rush. A half million a year, for most of Americans, would be like winning the lottery.

But these folks are not most Americans. Their personal economy is just fine, and they want to keep it that way. So political analysts know if President Obama wants this “change,” he’ll have to fight for it, down to the last dollar.


Filed under: Economy • First 100 Days • Tom Foreman • Wall St.
soundoff (8 Responses)
  1. kerr

    Raise their taxes. Makes more sense and it's easier. After all we are suppose to have a progressive tax system even if we don't have a progressive agenda.

    February 7, 2009 at 9:27 am |
  2. Annie Kate

    I haven't seen any suggestion about everyone earning the same thing – just execs not earning more than 500K. I wouldn't specify a title name on the injunction to not pay someone more than 500K. I'd just write it that no one in the company can earn more than 500K no matter the job or the rank. That should take care of it.

    February 6, 2009 at 6:36 pm |
  3. Making a Dollar

    Some american dream...here's your maximum! How stupid! I agree, those companies who require government assistance to stay afloat should monitor their employee salaries...including "senior executives." But lets be real, senior executives have worked long and hard to reach their respective positions. They are the best at what they do and as such are the leaders in their companies, they deserve to be compensated well beyond their employee....if everyone makes the same salary, what will promote advanced education and hard work...

    February 6, 2009 at 4:37 pm |
  4. CR

    I agree they will find their way around the salary cap. America has made too many trade agreements to go 50% American made. If we do that, be ready to go without many items, the fruit and veggie section in the grocery store will be smaller among other things.

    February 6, 2009 at 2:28 pm |
  5. Planetsusie

    Most Americans are financially rewarded in the workplace for either individual or group performance – things like meeting or exceeding efficiency , productivity, sales, or customer satisfaction or value-add criteria.

    I have no idea why this concept does not seem to apply in quite the same fashion for corporate executives or chiefs-of-whatevers, since their salaries and bonuses are generally tied to stock prices, or, even worse, the reputation for meeting some sales or performance number in a past executive position, during what was, for many of these folks, a time of glowing economic prosperity. Good for them, they managed to persuade board members that they deserved their outrageous negotiated salaries and golden parachutes, while nearly EVERYONE was making money hand over fist, even though all they really had to do was maintain or marginally grow their agreed upon number. But, as everyone knows, numbers can be massaged easily enough, and those powers of persuasion do not necessarily translate to management skill.

    The handful of truly skilled managers can let their numbers speak for themselves right now... Exxon, HP, Wal-Mart come to mind, among others. Which isn't to say the management policies of these corporations are pristine, but they are consistent in their approach, like customer satisfaction across various categories (being green, still producing a quality and/or innovative product, community involvement, etc.) and the key fact that they have made the required adjustments to compensate for an ever-changing and fickle economy and customer base.

    Managers perpetually send the message that it’s not necessarily what an employee has done in the past, it’s what he/she continues to do, every day, that matters, both for customers and their own pocketbooks. This simple concept could be applied to every level of a corporation, from facilities to financial. It’s generally not the American President’s job to tell corporations how to run their businesses, but his idea of a maximum wage cum bonus cap can be viewed as a terrific reminder of a solid management concept – reward for performance, not just for showing up.

    February 6, 2009 at 2:09 pm |
  6. GF, Los Angeles

    Good luck finding something made in the US Artbuff. I only have two items of clothes made in the US. The rest are from Asia.

    I think the CEO's should get what the average American worker makes – $42,000 a year. Once they pay back the taxpayers can they get whatever salary they want.

    February 6, 2009 at 1:22 pm |
  7. Cindy

    Obama may have put a cap on the big wig's salaries but make no mistake they will find ways around it! They have great lawyers that will find the loopholes and can get them more money. They are in the business of cheating people ya know!? LOL

    Cindy..Ga.

    February 6, 2009 at 12:45 pm |
  8. ARTBUFF

    IF WE WANT TO HAVE JOBS, WE NEED TO BUY AMERICAN MADE PRODUCTS< IT NEEDS TO BE REQUIRED IN THE STIMULUS PACKAGE, AT LEAST 50%

    February 6, 2009 at 12:31 pm |