I find it interesting that when I type in “average CEO salary” lots of angry links come up complaining about how overpaid CEOs are but when I google search “J. K. Rowling’s net worth” I find nothing but adoring fans. Yet, Rowling has a greater net worth than 99% of American CEOs. Is it possible that Rowling somehow merits her 1 billion while CEOs do not merit their considerably smaller salaries? Does writing popular books provide a greater service and do more for people’s livelihoods than, say, the work done by the CEO of a company like General Electric which provides the power that we rely on for just about every minute aspect of modern life? It seems strange, especially considering that the average salary plus bonuses for a CEO in the United States is $1,219,702 – that’s a long way down the ladder from Rowling’s billion.
Now, I’m not defending CEOs. Some are certainly overpaid and, overpaid or not, many are greedy people. However, I wonder why it is that society at large is okay with some types of people being fantastically rich (celebrities) but not other types of people (businessmen). Celebrities like J. K. Rowling are popular while businessmen are not – after all, that’s what makes them celebrities – but is popularity an appropriate gauge for reimbursement? That doesn’t seem just. After all, many unpopular people provide valuable services that enrich many lives; they should be reimbursed for their productivity. So, exactly what is a just pay?
Personally, I think just reimbursement means everyone meeting their obligations and getting what they contractually agreed to but in such a way that in the end everyone benefits. Staffs get paid for doing their jobs, management gets paid for running the company, and consumers benefit from the goods and services produced by the company. Everyone benefits and society as a whole should be better off for it. Now, obviously sometimes this is not the case. Sometimes companies engage in fraud, or coercion, or they exploit people and when that’s the case we need a strong rule of law in order to protect people and society at large. However, if I’m getting the wage I agreed to should it even matter to me if I later find out that my CEO is making 50 times my salary? Maybe if I believe that by reducing his salary I can get a little bit more then it does become my concern – but isn’t that greed too? And is it really any different than the greed of CEOs seeking pay raises and bonuses?
Perhaps, instead of pulling other people down, the solution to our economic woes is to work towards lifting the lower people up. This makes sense since merely bringing down CEOs only serves to hurt a few and help no one. Ultimately, this can only be accomplished by limiting government to the protection of liberty and the common good so that the free-market, free of gross waste and expense that comes with our current micro-managing bureaucratic empire, can be allowed to run efficiently and productively to the benefit of everyone. Because, its not inequality in incomes thats really important but the actual quality-of-life of real flesh-and-blood human beings – and even the lowest-earning Americans have been consistently on the rise for decades.
The study gives a startlingly optimistic picture of economic mobility. Take those who were in the bottom fifth of all earners in 1975. The conventional view would lead us to believe that these people were probably worse off in the 1990’s. But the Michigan study found that only 5 percent were still in the bottom fifth in 1991.
More remarkable, 80 percent of the bottom fifth in 1975 had made it into the top 60 percent of earners — middle class or better — over that 16-year span. And 29 percent rose to the top fifth. This evidence suggests that holding low-income jobs is largely a transitory stage for people with little work experience.
Therefore, what we should be promoting is not the redistribution of wealth but people’s ability to mobilize and move from one income bracket to another, and to do that requires personal freedom in people’s financial lives – not ever more restrictive government. Taking from the rich and giving to the poor only ensures that everyone stays put, and that’s the last thing that we want.