Should there be a limit? A professional athlete gets a 100-million-dollar contract. That’s what the market will bear. This person is good, but are they really a thousand times, or ten thousand times better at doing what they do than everybody else on the planet is at doing what they do?
Okay, I’ll reel it back a little. How about corporate executives. In 1965, on average, CEOs made 20 times what the workers at their companies made. (Source: Economic Policy Institute.) That seems like a big gap, but there is probably logic to justify it. CEOs do important things. But in 2021, the ratio of CEO to employee compensation increased to 399 to 1. (Source: Economic Policy Institute.) Any chance that’s excessive? Were CEOs 20 times more important than each worker in 2021, and now they’re 399 times more important?
So, here’s my thought. Maybe there should be salary caps for corporations. There could be a rule that CEOs are only 20 times more important than the average worker and that should be their salary cap. If they want to make more money, then the workers should get more money too. I don’t care about the exact multiple. Let it be 10, or 50, or 100. Whatever’s fair. Just because our free-market system produces sensible results in some cases doesn’t mean we should unquestioningly accept every result it produces.