Made of Money

Maximum Wage: Your Response

Your thoughts on the idea that countries should introduce a maximum wage, pinned relative to earnings of the poorest

2 min read

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Last week, Steven Johnson posted an article here on How We Get To Next asking whether technological progress is a necessary result of extreme inequality.

It’s launched a really thoughtful conversation, with responses both agreeing and disagreeing with Steven. Here are excerpts from some of the them:


Rick Fischer took issue with what he describes as an incomplete analysis of the categories that produce income inequality, and suggests a different solution:

“Just as success builds on past accomplishments, failure builds on past failures. This is the most promising category to remedy [to improve] income inequality without risking harmful unintended consequences. And since most of these negative conditions are the result of bad government, they are susceptible to good government remedies.”


ReeD Martin pointed out that a heavily progressive income tax would accomplish the same goal as a maximum wage ratio, while instead investing the difference back into the public sector rather than the company:

There’s a sharp distinction between those two outcomes, and one might easily draw political lines precisely there. For example, a 0% income tax rate on SF minimum wage nets $31,200. A 90% income tax rate on incomes over $10 million would still net a wage about 40x higher, but also bring in $9 million to the public sector.


Daniel A. Shockley said that a maximum wage ratio would encourage gaming the system:

We’ve already seen a solid way to accomplish in reality what the maximum ratio purports to try to solve: incentives to value people’s time fairly. The large marginal tax rates on the highest income brackets accomplished the development of a strong and large middle class. Rolling those back has been part of the destruction of the middle class. Why not do what we already know works, instead of something that is easily gamed?


Howard Chambers called Steven’s essay “remarkable” and related it to her own work in city planning, writing:

Coming from my experience in trying to disrupt how we plan and design our cities to work better for people, the support, resources and interest is very weak. Big tech companies, VCs and developers disappoint in their inability to see the positive ripple effects in investing in city planning; a social renaissance–with people interacting with more tolerance and empathy, sustainable systems that create energy and clean waste and finally economic robustness sprouting from intelligent insights and observations.


Jay Maynard asked Steven where his suggested 40:1 ratio comes from, and what’s to stop future governments from decreasing it even further:

“What you ignore is that the wider distribution of startup capital wealth in Silicon Valley is entirely a product of the free market. Companies found that they needed to do that to attract the best talent. It happened without the tiniest bit of government intervention. [“¦]

I, for one, am not willing to bind the mouths of the kine who tread the grain. Even if that means they make a thousand times what I do in a year. I simply don’t have that right, and neither does anyone else.”


Finally, Kati Sipp wondered what could have been if Silicon Valley had evolved within a society with a more egalitarian economic system:

The existing system of income inequality has produced the environment where people are willing/eager to accept task-oriented gigs, in order to earn a little bit more money. I often wonder, if we’d seen the kind of wage growth that existed from the 1950s to the 1970s, whether there would be such a large group of people willing to drive for these apps? [“¦] I’m not convinced.


Is a maximum wage ratio a fair solution to inequality? Or is it unnecessary interference in a successful ecosystem?

Does the government have the right to so strategically monitor Silicon Valley’s wealth? Or is it really true that the success of the startup ecosystem in the tech industry depends entirely on the free market?

Does anyone have any better suggestions than a 40:1 ratio? Or think that a pay ratio is still insufficient on its own to combat inequality?

You can read Steven Johnson’s original article here.

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How We Get To Next was a magazine that explored the future of science, technology, and culture from 2014 to 2019. This article is part of our Made of Money section, which covers the future of cash, finance, economics, and trade. Click the logo to read more.