One way of solving this problem of the obscene chasm between the earning of the bosses and the workers would be a very simple tax system, so simple that i keep getting told it is unworkable.
tax on earnings up to 100, zero
tax on the next 100, ten per cent.
tax on the next 100, twenty per cent
tax on the next 100, thirty per cent.
tax on the next 100, forty per cent
tax on the next 100, fifty per cent.

i am talking about earnings per week here, and the incremental increase in taxation would make it less attractive for the few to hog all the money.
it would also mean that the taxes of the rich support the poor, rather than the current situation of the poor supporting the obscenely rich.

I was reading a paper on restricting CEO pay last night, and in it a book by Graef Crystal is cited as tracing a ratio of 5 back to Plato; JP Morgan is cited in the paper as saying it should not be more than 20. The original manifesto from Is Feidir Linn (that led to the Claiming Our Future conference and coalition) proposed a ratio of 10.

[For the fellow nerds on this thread, are the references and links:

Dittmann, Maug and Zhang "Restricting CEO Pay", European Corporate Governance Institute Working Paper in Finance 291/2010; available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1660490 [be warned: (a) the maths gets hairy after the nice opening; (b) the paper concludes that (most ways of) limiting CEO pay would lead to *increases* in average CEO pay comapred to what they get now.]

Is Feidir Linn, 2010 "A vision for an inclusive, equal, sustainable Ireland" available at: http://www.communityplatform.ie/Final-Manifesto.pdf]

Perhaps instead of a specific ratio we should say that in each company, the committee that decides wage rates must have 50% worker representation on it. A stepping stone towards this would be, all businesses in receipt of government contracts would have to make this change by, say 2015 if they want to keep getting government contracts.

This would ensure that the people who work in the company have a say in who gets paid what, and because workers would be less likely to sanction ludicrously high salaries without the people at the bottom getting a pay increase too, it would level out wage rates.

I think this would be easier to implement than a blanket, across the board 10:1 rule, and also would have less opposition. The 10:1 ratio should be applied in the public sector, including the likes of Taoiseach and central bank governor.

Equality Dude
Ref : Free - Loader.... Point Taken

Ref : Why more money for more skill ? (more than 10 fold that is)
To encourage people to improve their skills and to aim for higher standards of education & skills, and to allow a lifetime of efforts be well rewarded.

A 10 fold gap is too low, some people gamble years & years of their lives developing new technologies and enhancements, and a 10 fold income growth is not sufficient to reward this sort of dedication.
I would find it harder to argue against a 200 fold gap (cos even after 40 years of struggling, you could still be better off if you eventually succeeded)

We do want to encourage people to work long and hard at difficult problems, and a 10 fold gap is too small for that.

HWE

@ HardWorkingEejit

Part of the situation you describe is the well-known free-rider problem. As far as I know, that is an unsloved problem in existing systems. Why should alternatives be required to attain a higher standard

Why should a high-skilled -- which is a different point from hard working -- why should a highskilled and hardworking person get more than ten times the amount that a lowskilled and hardworking person?

As for your second point, yeah, we should go for it! For example, that would mean that a full-time shelf stacker in Marks and Spencers on Dublin's Grafton Street would have got a pay *rise* of stg£750,000. Cool by me. (Or, taking my tongue out of my cheek, why should a single worker in a company get a pay *rise* of £7.5 million?)

The underlying sentiment is excellent, but I think the specific point about the 10:1 ration in a (single) business would need to be examined more carefully. We already currently see increasing use of 'flexibility', outsourcing, so-called "self-employed" contractors, etc. It would be very easy to undermine the purpose of a 10:1 ratio limit by setting up a separate company for different activities -- outsourcing lower jobs so that the pay ratio for the top earners is not hampered by the presence of receptionists, secretaries, call centre agents, retail sales staff, etc.

Lucy: "I just wonder about arguments that this would cause a brain drain. How do counter them?"

You mentioned one way, which is essentially an attitude shift. This has to start with children and education as well as adults and their current obsession with growth at any cost.

My system of phasing in greater equality would help too. You would have a brain drain but my guess is that it would work both ways, as Ireland becomes more attractive as a true land of equal opportunity.

Don't forget, this system would raise all boats rather than swamping most, which is what happens under the current system.

Might I suggest reading this: http://www.monbiot.com/archives/2010/10/11/the-values-of-everything/ which is coincidentally very relevant to our points?

This simple idea means that the right-wing argument that 'a rising tide raises all boats' becomes a reality. Neo-liberals say that entrepreneurs deserve high incomes. It is usually those who stand to gain from this that promote the idea. Well this requirement means that, sure, let some people earn high incomes. But to do so they have to share the profits with everyone in the company - right down to the toilet cleaners.
It would also give everyone a meaningful stake in the organization. It obviously requires transparency so that the pay of the highest paid is known and staff should insist on knowing what the 'expenses' are too.