Talk:Maximum wage

Monetarism

I agree that "economists of the mainstream, if not dominant, Monetarism view, would say"..."inflation is controlled by the growth in the money supply according to the quantity theory of money" is general knowledge, but would like a citation for the idea that they "would say such an argument is entirely incorrect". Also, I agree that "There are no serious mainstream groups advocating a maximum wage" is general knowledge, but would like a citation for "most economists would say a maximum wage is harmful and unenforceable." Personally, I think the former questionable statement is a bit more of an abstract assertion than the latter. (Gamerider 01:32, 6 December 2006 (UTC))

You have a point and I took out the second statement. (Though I think it a maximum wage is harmful and unenforceable), but I stand by the first statement. No serious groups advocate a max wage (for good reason), and I think the biggest mistake this article could make is to not challenge the kind of sloppy economic assertions made by supporters who first wrote this article. The closest relatives of a maximum wage are confiscatory level marginal tax rates and the policy of wage and price controls. Wage and price controls have been attempted in order to control inflation, but they have never sustainably worked which is why modern economies no longer attempt them. The last go the US had at wage and price controls to control inflation was in the 1970s under Nixon, and it ended in failure. As for the other comparison, the top marginal tax rate was significantly higher in the 60s and the 70s than it is now (the top marginal rate was reduced by tax cuts from President Kennedy, tax cuts from President Reagan, and tax reform by the 1986 tax act that reduced the rate but removed exemptions), but inflation is now significantly lower, mostly as a result of a different approach to federal reserve policy started by Paul Volcker and continued by Alan Greenspan (policies that were consistent with Monetarism). Inflation has dropped to unprecedented low levels worldwide because of the growing trend of independent central banks with central bankers that have an understanding of modern economics and a tough approach to fighting inflation. The remarkably low inflation the world is experiencing has nothing to do with maximum wage laws. Mgunn 06:22, 6 December 2006 (UTC)

The 16:59, 5 December 2006 edit was made by me. I forgot to log in before making the edit, which was mostly gramatical, but don't want peope cap, but lawmakers did write into law a top tax rate of 94 percent on all income over $200,000.

A full discussion of maximum wage advocacy in the United States appears in Greed and Good: Understanding and Overcoming the Inequality That Limits Our Lives [1], by Sam Pizzigati (The Apex Press, 2004).

Things like "The minimum wage concept is an effective tool which can help limit the possibility of deflation of a currency or overall economy." or "The working populous in an economy that has both a minimum and maximum wage is therefore bound to live in the middle of the two economic wage points. Although the benefits of such an arrangement are argued by most economists, historians generally agree that a strong middle class has been key to strong economies throughout history." are really problematic for this article.

Thanks!

I’ve added Pizzigati to the references and included some content in the body in this edit and earlier ones; I’ve also added the 1942 war-time maximum income proposal by Franklin D. Roosevelt to the same (History) section, together with the implemented policy (88% tax, plus 5% “Victory Tax” = 93%, though 5% credited after the war).

—Nils von Barth (nbarth) (talk) 07:20, 9 December 2011 (UTC)

Worked for post-WWII Japan

General MacArthur instituted a maximum wage in Japan.

-Ben Reppulst

No attention to the most obvious feature?

I would have thought the most obvious problem of a 100% tax is that there is zero incentive to make any more money, and therefore it would be pointless from the point of view of attempting to raise revenue to redistribute wealth. This clearly deserves a mention in here, probably pointing to the Laffer Curve. -Nichlemn 10:43, 9 December 2005 (UTC)

I have deleted the following sentence because it it obviously untrue: "A maximum wage would theoretically help governments redistribute wealth to the lower classes." Of course the reverse is true.

CSMR 15:32, 25 September 2006 (UTC)

^^^ question, which may be answered by anybody,, if there were to be a say 5 million$ max wage,, and anything above this would be taxed and put towards helping education, hunger, poverty, free medicare, etc. isnt that in itself an incentive??? i mean if i made more money in a year than i could spend in a lifetime, like some of these ceos, entertainers, and athletes do,, then i would only work for a year and never work again if money was my only incentive. but obviously, guys like tiger woods, who has no need for money (and by economist logic, no incentive) continue to work. So basically my question is that, #1 if money is being equated to incentive to work" by economists, even at the highest levels, then explain to me why bill gates still works??? if the gov told bill gates he could only earn 5 mil per year is he gonna be insulted and walk away from microsoft??(yes theres sarcasm in this question, but i would really like an answer) and #2 what other arguements are there against a max wage besides incentive?? cause thats the only one ive been able to find and obviously i am not convinced by it.

Well, consider, if someone had "helping others" as an incentive, and so would gladly work with 100% of their incomes taxed, you would expect that they'd be donating that income anyway without the effect of the tax. So the "selfish" person who earns money and gives none of it away will concurrently not work with 100% tax, not considering where the tax dollars could be spend. Therefore, a 100% tax would not provide any net "generosity". - Nichlemn

^^ good answer

I would quit, read Atlas Shrugged.

In answer to this question, Bill Gates may not walk away from Microsoft but he would have less incentive to act with so much drive and ambition.

If Bill Gates was not allowed to make more than $5mil/year AND all of his competitors were subject to the same limit (which is the point of a maximum wage law) competition would go on unhindered. Just because Bill Gates couldn't make more than $5mil/year doesn't mean Microsoft couldn't make more than that, it just can't give more than $5mil/year to any one person. Investors would still want a company to grow.131.174.91.179 (talk) 15:01, 7 June 2013 (UTC)

Regarding the small changes I have made, plus a question

I would like to note that my changes, while mostly grammatical, did also encompass some factual data. Mostly, this was in regards to how that factual data was represented. I have reworded the article as to avoid vague groups like "supporters" except in reference to actual theoretical camps. Example: Rather than saying "Supporters believe that the maximum wage concept..." I have instead changed the words to read "It is believed that the maximum wage concept...". However, I have left words like "supporters" in sentences like "supporters argue that..." due to the fact that the argument is made by the supporters of the concept; this is not the case for the example I have displayed above. I also have removed all references to a "they" or "them", as this locus is unacceptable without first introducing a group to which "they" or "them" refers.

It is my request that the sentence "This, supporters argue, is advantageous due to the fact that most economists agree that strong economies are supported by a strong middle class", although not directly tied to the Implementation (the subject under which the sentence can be found) of the maximum wage, be left in place until such time as either I or someone else writes a "Support for the maximum wage" or similarly titled and subjected section in response to the criticisms already present in this article.

1. your revision seems like it gives factual creedance to the maximum wage rather than a neutral view. 2. no economists would argue you build a middle class by putting a maximum wage in effect. 3. that last sentence is original research and poorly constructed...and repeat point 2. (Gibby 16:42, 8 February 2006 (UTC))

I, obviously, agree with you that the final sentence, which I proposed keeping, does offer a viewpoint that gives credence to the maximum wage view rather than to a neutral viewpoint. I believe my reason for wanting to keep the sentence was reasonable in the effect that it would be removed at a later date; however, since wikipedia is supposed to carry with it a neutral viewpoint I will not argue about the removal of that sentence.

My other grammatical changes, however, did not bring the article closer to supporting maximum wage; I argue that your grammatical structure gives credence to those camps which are against the maximum wage. I believe that by removing references to specific loci without referencing a specific group or person is unacceptable in a neutral-point article. This article is not meant to represent the viewpoint of abstract groups. If you wish to leave your version of wording I recommend referencing which specific group of supporters you are talking about. Otherwise, the more neutral wording of "it is believed" should be left intact. Moreover, I am shocked that you would revert the page back to its original form without a general consensus on the mater first being collected, and am shocked even more so by the fact that you did not leave the changes to glaring grammatical errors (IE "supporters of the maximum wage is theorize" is an unacceptable sentence to leave unchanged).

I would also like to point out that there are economists who would argue that placing both a minimum and maximum wage upon a society would place all people within that system between the two wage points. Whether or not this would lead to a middle class or a polarized upper and lower class is undetermined; however, I did not specifically state that economists argue that such an action would occur. I merely pointed out that supporters of the maximum wage concept believe that a middle class would be created, and that economists believe that a strong middle class is essential to a strong economy. Both of these points are neither speculation or original; they are fact. Although you may disagree with these facts, I find it unacceptable that you changed them without first consulting the issue and giving me a chance to respond. (Gamerider)

There are no economists that argue that placing maximum and minium wages will result in a society of middle class because that is retarded and an economic fallacy. period. Nor does having a middle class and only a middle class constitute a strong economy. (Gibby 06:28, 10 February 2006 (UTC))

I have reverted the article and have placed an NPOV dispute warning at the top of the page. In the future, please deal with arguments like this by adding this or similar warnings rather than deleting entire articles. I have also nominated this article to be checked by a third party for neutrality, as we seem to be getting nowhere in our arguments.

The notion of a middle class society resulting from both a minimum and maximum wage being implemented is a legitimate theoretical outcome. Furthermore, saying that the theorized outcome "is retarded" is not an argument, nor does it support your argument stating that its an economic fallacy. It is not an economic fallacy that a society, being constricted to living within two wage points, would end up living somewhere in the middle of those wage points. Whether or not this results in a middle class is disputed, as the possibility of a economically polarized society (where there is only a very rich and a very poor class) is apparent as well.

I have changed my statement that economists believe a strong middle class constitutes a strong economy to actually say what it said in the first place: that historians believe a strong middle class constitutes a strong economy. This is an effect that we have seen throughout history; in many different civilizations throughout the world. (Gamerider)

Jiminy Christmas! "A legitimate theoretical outcome" maybe if theoretical outcomes are not supposed to be predictive of events in the actual world. Let us be clear here. The idea that the result of both a minimum and maximum wage would be a society entirely composed of middle class is not a legitamate outcome of ECONOMIC theory.

Furthurmore, if you are going to state that historians believe that a strong middle class constitutes a strong economy you'd better site your sources. Historians of economics would not subscribe to such a ludicrous blanket statement. The fact is economy such as preasent day United States would be considered "stronger" by just about any historian than that of a neolithic tribesman, despite the fact that most of the members of that society were likely "middle class." Factually, in many ways the poorest citizens of modern industrialized nations are materially better off than juust about any human being that has ever lived. Economist tend to view things such as standards of living to be the best ways of evaluating the health of an economy, not merely the distribution of income levels.

-jglassman

It is only a legitimate outcome in fairyland. If you put a maximum wage you will end up with a society of poor, not middle class. The assumption is completly silly. (Gibby 17:01, 15 February 2006 (UTC))

It should be rather obvious that when people say things like that having a large, strong middle class is good for an economy they mean it is good compared to another economy with the same means, so Sweden in 2013 does better than Brazil in 2013 (GDP/capita, hdi, life expectancy, corruption index, crime levels, social mobility, etc...) and an egalitarian neolithic tribe does better than a neolithic tribe with a privileged nobility.

Also, any economist worth his salt would not say standard of living only depends on material wealth only, especially not in the narrow sense of physical goods. Writing that John Rockefeller didn't have a mobile phone or a TV so today's working poor are better off than him is something WSJ columnists do to make themselves feel better, real economists know Rockefeller could buy every one in congress and the senate many times over, could go to bed with a different set of 7 beautiful women every night, could pay for people to carry him around in a throne all day, could hire entire armies of servants, could hire the best lawyers in the world and pay even the highest fines without feeling it, he could buy vast amounts of real estate and had the social status that comes with being one of the richest men in the world, so that mobile phone and TV are a bit insignificant in comparison. It would be nice if the level here could be more real economist and less WSJ 1%-stooge columnist.89.99.122.33 (talk) 00:27, 2 August 2013 (UTC)

Added history from Department of Labor website

I added some information from the government Department of Labor website. There is no opinion in there, just a statement of its existence in those times and the sources reference specific laws and state instances. I see no reason to argue over what the effects of maximum wage laws have to be- they are what they are. If they are in effect they can be used for many different rationals. The minimum wage article isn't being disputed as biased, what's so complicated here?

Please

Who wrote the opening paragraphs of this article? One of the topics of highest agreement among professional economists (read, not wanna-be socialists who took high school economics) is the connection between increases in the supply of high powered money and inflation. I'm sorry, but high wages alone do not create inflation. I would like someone to walk me through an economy where the high powered money supply is fixed, and the advent of high wages, or rising wages in some sectors or for some individuals results in economy-wide inflation. It just dosen't happen. The opening paragraphs of this article are irresponsible. They are a fantasyland excuse for implementing a maximum wage. While I am against a maximum wage law, I do admit that some of the arguments presented have some truth, such as the ability of wage controls to equalize the wealth distribution. (I would point out that price controls do equalize wealth - we all tend to be poorer). However, advocating wage controls as a method to prevent changes in the valuation of currency is pure fantasy; this simply does not happen without changes brought about by central banks in the money supply.

In addition, a valid but overlooked criticism of this policy is that it is totally unenforcable. The United States has outlawed most drugs, prostitution, and many forms of sports betting. However, these activites still occur in black markets throughout the nation, and the world for that matter. I find it hard to believe that the government would be able to enforce maximum wage/wealth laws without an army of investigators, enforcers, prosecutors, and the like. The US has a global army employed in the fighting of narcotics trafficing and by the IRS to investigate tax compliance. All the resources placed in these enforcement roles are essentially wasted - drugs are readily available in the US and tax avoidance couldn't be easier. It could be argued that the deadweight loss placed upon high wealth generating activites by this form of extremely progressive taxation would be more burdensome and unattractive than the original conditions which prompted such a policy.

-Md Economist

I just came across this article and at least challenged some of the most doubtful assertions (I probably should have deleted them, anyway, I didn't). Hopefully the article imparts a more proper understanding now. Mgunn 18:57, 29 November 2006 (UTC)

Enforcement would require the elimination of cash money and direct linking of accounts to a person with an automated limit for how much money any one person can receive in a year. Not impossible, but it would require major changes to financial systems. Of course fraud could still take place by people buying themselves a car via their business or the payment of bribes in cars and gold, but this would all be limited and be punishable by jail time (large settlements to stay out of jail wouldn't exist anymore because no one is supposed to be rich anymore). P.S. the stuff about inflation does indeed not make a lot of sense and even if it's true it shouldn't be the main selling point, the main selling point should be the limitation of income and wealth inequality and the positive effects that would have for anyone who's not in the 1%.89.99.122.33 (talk) 00:54, 2 August 2013 (UTC)

Rewrite / Delete?

I think most of the material in here is just bogus/wrong, and it sounds like much of the article was written by a high school economics student. I generaly avoid deleting wide swathes of text, but much of this articleprobably warrants it. I think the main points are: (1) explain what a maximum wage is (2) Some economists used to view wage controls as a way to fight inflation... this view is quite discreditted (3) no serious group advocates a maximum wage. If there are no objections, I'll redo the article. Mgunn 21:20, 15 January 2007 (UTC)

• One point nobody has noted is that not all wage ceilings are enforced by governments. Professional sports leagues like the Victorian Football League used to impose rigid wage ceilings on players (the Coulter Law) to help even the competition. This would need discussion of the article is improved luokehao 6:48, 16 November 2008 (UTC)

Some other things to consider in a rewrite

I would like to point out that a rewrite of the page, the benefits of a maximum wage should be pointed out. Granted it doesn't do much for the numbers of an economy on the whole, but it does help out decrease the gap between rich and poor, and a high rich-poor gap is damaging to other parts of the society. Also, the current article only seems to really delve into things from the theories of Monetarism. Although dominant, Monetarism has definitely been shown not to be the most accurate theory on economics. (That title belongs, if I recall correctly, to Creative destruction, at having the highest accuracy rating at prediction economic trends than any other theory).

Obama maximum wage

I heard today that Obama is going to limit corporate earnings in his aid packages. http://www.google.com/hostednews/ap/article/ALeqM5iYX--wRrv7CQhjxb9FFjidsIvjLQD964VDDG0 should this be included in the article? wiesel (talk) 20:56, 4 February 2009 (UTC)

Should the Laffer Curve be discussed in this article?

I was wondering if the article should discuss the disincentives for governments to impose a maximum wage or have extremely high tax rates for the highest marginal rate because according to the laffer curve you want to tax income at the point where government tax revenue is maximized. In addition, in the 1990s the highest federal tax rate in the U.S. was 39.6% for personal income taxpayers and in addition interest rates (federal funds rate) were low because Alan Greenspan recognized the productivity revolution that began in 1995 compelling him to set low interest rate targets for the federal funds rate. Basically, tax rates and interest rates were low during the 1990s and the commodity price level was much lower in the 1990s versus the 2000s, signifying that in certain instances when income is not taxed in a punitive manner, but maximized to maximize government tax revenue, you do not need a maximum wage but sound fiscal and monetary management of the economy to reduce inflation, and promote greater economic growth and government revenue. Someone please respond to these comments to induce further discussion on the subject.65.110.146.154 (talk) 21:27, 16 February 2009 (UTC)

A maximum income law does not mean total taxation as a percentage of GDP has to increase. If you tax everyone 100% above say, $1 million per year, this will affect less than 0.5% of people (in the US) you can use the additional tax income to lower taxes on the other 99.5% of people (if you eliminated all taxes for income below $1 million you could bring down total taxation to something like 10% of GDP, so don't worry about that Laffer Curve). So for every person who has to pay more taxes 199 people end up paying less taxes and it is well known from psychology that going from a net income of $30k to one of $40k is much more motivating than any income beyond $1 million. To disagree with this you'd have to deny every psychological study on the subject AND you'd have to believe the richest 0.5% are supermen who produce more value than 199 ordinary people combined.89.99.122.33 (talk) 00:35, 31 July 2013 (UTC)

Related concepts...?

"Maximum Total Earnings legislation suggests that when a person has accumulated sufficient wealth that they can survive on the interest alone they must stop working and allow someone else to work. This theoretical concept assumes there is a set amount of work to be done in an economy, and is not supported by any major form of modern economic thought. Attempts to reduce unemployment by removing people from the labor force, as is proposed by this theory, have been a failure.[citation needed]"

This reeks of NPOV problems. Also, what are the related concepts supposed to be? :-P I propose deletion, if not of the entire section at least this text and insertion of actual related concepts/topics by name. Nlalic (talk) 19:01, 21 July 2012 (UTC)

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