Sunday, November 24, 2013

34% of Swiss voters support executive pay cap

Unfortunately twice as many voted against it.

But it's a start. The referendum was over a measure brought by the Young Socialist Party to cap executive pay at twelve times the pay of the lowest paid employee in an organization.

While that '12 factor' is somewhat arbitrary, the ballooning of executive pay packets has become recognized as a problem in most of the developed world, at least in progressive circles.

According to Forbes, in the mid sixties American CEO's made about twenty times what their average employee earned. That has steadily climbed, through good times and bad, to a multiple of hundreds. While the shop floor folks have seen stagnant wages since the 1970's, the suits have been living the dream.

Any cap on executive compensation is bound to be arbitrary, and there is plenty of room for discussion about what an appropriate cap multiple should be, but it's a debate that society needs to have. There was a time when the phrase "working poor" had all but become an oxymoron, but in America the working poor have been the fastest growing economic category over the past twenty years.

That can be undone. Change can happen in the same incremental way that other social changes have succeeded in capturing the public agenda. Civil rights, women's rights, gay rights; none of these struggles were won on the first go-round. Indeed, all of them remain struggles and should not be taken for granted, but the fact that they are now seen as legitimate issues by a broad spectrum of society tells us that executive comp caps could become a generally accepted concept too.

True, simply capping CEO compensation won't by itself lift the working poor out of poverty. But it is an important symbolic gesture. It signals that at some level we're all in this together. A society that rewards the executive suite with eight-number annual compensation while the shop-floor folks need food stamps to feed their kids needs to change, and shaming the selfish bastards who have brought this situation about is a good start.

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