[Kalium]

That's an excellent question! Let's see if we can address it with some math.

I'll start with this: http://ir.united.com/corporate-governance/company-leadership

This says there are 24 executives at United (I counted). If you assume literally every single one of them is paid as much as the CEO is and redistribute all that money across the whole of United, then that's 24 * $200 = $4800. $200 was rouding a bit ($207 is ungainly to work with), so it's actually closer to $5000.

Now, $5000 a year isn't nothing. It's undoubtedly and unquestionably a life-changing amount of money for a lot of people struggling to get by on manifestly unreasonable and unfair minimum wages.

That said, $5k is also far short of the $14k number above. And we had to make several unreasonable assumptions to get here.

Realistically, the policy proposed here is freezing salaries and re-directing raises among executives. Most compensation would be unaffected. Further, not every executive will be paid as well as the CEO. Assuming generous 10% yearly raises and that other executives are paid around half of what the CEO is, you get a result that looks like $5000 / 2 = 2500 * 0.1 = $250 / yr.

Which isn't far from the initial result. (And still includes some unreasonable assumptions)

[mercer]

Thanks for the calculation! I think limiting it to the 24 execs is still a bit on the conservative end of things (as far as equalizing pay goes), but it's interesting to think on.

I'm actually surprised how merely broadening the calculation a bit already results in a quite significant amount. 5k is quite a bit!

Anyways, thanks again :).

[Frondo]

What I'd like to see is what the numbers look like if you:

1) Pegged the CEO <-> lowest-paid worker (or contracted worker, so you can't just contract out the janitors) to no greater than 10 to 1.

2) Balance out the next few layers of management to reflect that cap.

3) And see what pay looks like for the lowest-paid workers.

If you don't like 10-to-1, maybe we do 20-to-1. Find a nice low ratio, though, and if people want to make more, they can run the business such that everyone makes more.

[Kalium]

Very minimally different, I rather strongly suspect. You'd probably get larger shareholder dividends, but not that much larger.

There's this idea we're dealing with here that there's massive, virtually untapped, make-everybody-well-paid amounts of money being wasted on management overhead. It's a very reasonable idea. Managers at the top get paid an amount of money that's clearly and obviously incredibly excessive and has absolutely no connection to anything!

Yet, it might be worth considering that this might not actually be true in the important broad sense. What if there isn't a vast pool of money locked up in management salaries that would dramatically improve the lives of workers? What if there isn't the "fix the car money" or "send a kid to college money" another poster was rhapsodizing about for every worker? Might it be worth considering that in most cases, managers aren't actually paid vastly more than their direct reports?

Besides, there are plenty of ways to structure businesses that would get around something as simplistic as a compensation ratio.

There will always be another "But what if we run the numbers differently?" scenario.

[Frondo]

I have no reason to believe that it's minimally different, and I'm curious what reason you do, aside from it's comforting.

When 10 people own as much as half of the population of the country, there's something there. Calling it not "a vast pool of money" might be semantics, because there's definitely something there.

[Kalium]

When 10 people own as much as half the population, there's definitely a lot wrong with society.

It's perhaps worth considering that most companies might not replicate that structure internally. Given the numbers above, this strikes me as good reason to suspect that the approach you describe - while definitely a good idea to promote equality! - might not have the the numerical outputs you expect.

[Kalium]

5k is definitely a lot!

You have to be wildly fantastical to get there, though. Meaning it's not a number that should be taken at all seriously as anything other than a work of numerical fiction. $250 is a number that's likely much closer to reality, though probably still too high unless you can find a much broader swath of people to freeze the salaries of.