A Maximum Wage?

As I mentioned a few blogs ago, I recently read Brian McLaren’s book Everything Must Change for my Emerging Church class at Fuller. Overall I thought the book was terrific.  McLaren raises a number of important questions that the church, to our shame, has long neglected, and he offers some creative answers.

Towards the end of the book he brought up a particularly interesting idea that caught my eye.

We all know about minimum wage.  Most of us, at some point in our lives have worked a job that paid minimum wage, and for most of us, at that time that seemed like a whole lot of money (for me it was Round Table Pizza at age 16…good times).  As Americans we are fortunate that live in a country that requires a minimum wage, though sadly such laws do not exist on a global scale, and there is still massive inequity even in our own country.

Consider, for example the fact that Merrill Lynch CEO E. Stanley O’Neal was paid around $160 million for his five years of service as CEO, and then netted an additional $160 million in an exit package (never mind the fact that the company’s stock actually went down during his tenure). Consider also that the average CEO brought in $14.2 million in 2007, while federal minimum wage is a whopping $5.85 per hour (which adds up to $11,700 per year, assuming a 40 hour work week for 50 weeks per year).

By any logical account, we live in a country (not to mention world) of massive inequity.

McLaren lists “wages” as one of the seven elements of what he calls “development economics” in his chapter entitled “organized religion or religion organizing for the common good?” In the section on wages he writes the following:

“Some economists, including Herman Daly, also recommend a kind of maximum wage (in addition to an international minimum wage), but no the “invidious, forced equality” of the old, failed centralized planning economies.  Instead, they recommend a ratio-based arrangement in which the salary of the highest-paid worker in a corporation would be limited by its relation to the salary of the lowest-paid worker.  So, if the relation was a factor of fifty and the lowest-paid worker earned $20,000 per year, the highest-paid worker could earn up to $1,000,000.  Beyond that level, his salary could not increase without a corresponding increase among the lowest-paid workers.  Daly actually recommends a factor of ten or twenty, suggesting that the “bonds of community break at or before a factor of one hundred.”  Within a framing story that provides no moral context, this kind of ceiling may sound ridiculous, but within a framing story that takes bonds of community seriously, the lack of ceiling sounds even worse.” (page 261)

A maximum wage.

That’s an interesting concept.

I’ll be the first to admit that I’m no unbridled capitalist.  I’m not a socialist either, but I believe that unrestrained capitalism in the name of “freedom” gives us a world where, well, CEOs make gazillions of dollars while a good portion of the world starves.  What would happen if we created a sort of maximum wage?  I’ll tell you this much, either Alex Rodriguez would get a big pay cut, or the folks that work in the concession stands would be stoked.  We most certainly would have a more equitable world, and that would be a good thing.

All of this makes we think about the early church as recorded in Acts, particularly Acts 2.  It says that they had all things in common.  People voluntarily sold their possessions so that a sort of economic redistribution could take place to aid those who had need.  It seems to me that they practiced a kind of voluntary socialism.  They, as Brian McLaren would say, took the bonds of community seriously.  I would argue that it is darn near impossible to really take community seriously while at the same time worshiping at the altar of unbridled capitalism.

That being said, I recognize there are some problems with this idea.  One need only look at the medical and pharmacological innovation coming out of Canada these days (or lack there of) to see the problems with a more socialistic system.  We, as human beings, are motivated by the almighty dollar, and when that carrot is no longer dangled in front of us, our desire to run to our fullest potential is diminished.  So then, when financial gain is made impossible, innovation is stifled.

It’s sad, but it’s true.

The reality is that our world needs innovation, and society benefits when innovation is rightly valued.  I suppose the question is: to what end are we willing to sacrifice innovation to increase the bond of community?  Let’s face it, corporations would be different places if CEOs didn’t make 262 times what the average worker makes like they did in 2005. I think about my friend James and how he has used his life experience and his business degree to start what he has called a socially proactive business.  Or maybe a better question is: how can we become people that seek innovation out of a desire to strengthen our communal bonds rather than strengthen our portfolios? In the conversations I’ve had with James about his business, I’ve appreciated hearing the ways that he is addressing those questions.

If a maximum wage is going to work then those questions have to be answered.

For those of us who believe the Bible and believe that the image of God in fact does exist in every person, I would say that this is an important human rights issue.

I’ll admit that we are far too enamored with the perceived good of “freedom” to ever see this sort of policy exist on a societal level, but it seems like a good idea.