Ask HN: What do you think of salary cap?

[rrgok]

Disclaimer 1: I'm not a native english speaker, so forgive me for my spelling and grammar mistakes. I hope to convey the message.

Disclaimer 2: My google fu is not that good and I cannot find anything about it. The only results are related to sports.

Disclaimer 3: It just a passing thought, I didn't explore all the social/economical/political intricacies. But that's why I'm asking here :-).

What do you think of putting socially a limit on how much an individual (not family) can earn? What is the point of earning more than what I can spend in my lifetime, or my grandchildren lifetime?. My question is specifically targeted for people who earn more than half a million dollars per year. I could understand earning at least 150-200K/year having a family and providing them a good life, maybe not a luxurious life. Now, the exact amount I don't know. It will vary according to the market.

I keep thinking, limiting the salary a person can earn, will somehow discourage people from running this rat race and accumulating so much wealth. It will inevitably put in every person mind the idea of work and personal life balance.

Once reached the top money, why should I keep working?

This will partially solve all the social insurance, UBI, retirement plans,..., right? The extra money goes to the social fund of a nation?

The ever-growing and ever-progressing mindset that we have is not sustainable in the long-term. Why not put the same cap also per companies? Why the goal of a company is always earning more? What if we put a cap also there?

[theandrewbailey]

If you put a limit on how much someone can earn, you put a soft limit on how much people do. Why do more for my company if I can't get more out of it? If this happens to too many people, a company's products and services start to suffer. Why would someone invent a new technology that could help millions of people if he can't earn anything more out of it?

> What is the point of earning more than what I can spend in my lifetime, or my grandchildren lifetime?.

That level of wealth doesn't come from salary. It comes from equity. All that "money" is on paper. If the company made too many mistakes, all that wealth disappears. Besides, most family wealth is spent in 3 generations.

EDIT:

> I keep thinking, limiting the salary a person can earn, will somehow discourage people from running this rat race and accumulating so much wealth. It will inevitably put in every person mind the idea of work and personal life balance.

Maybe, but work life balance is a very personal choice. If someone wants to work all the time, we, as a society, should let them. It might not be the best choice for the individual, but its their choice, and no one should stop them.

Furthermore, even if a salary cap was imposed on everyone, there would still be a rat race, since work is not valued equally. People at the bottom will still work themselves "to death" and not have good work life balance.

[prirun]

I think limiting CEO and executive staff total compensation to some multiple of average/median/whatever total compensation could be a good idea. Let them make higher salaries, but they have to bring everyone along with them. As it is now, IMO higher ups take advantage of people lower in the food chain in most companies.

"A study of 300 top US companies released by the Institute for Policy Studies (IPS) on Tuesday found the average gap between CEO and median worker pay jumped to 670-to-1 (meaning the average CEO received $670 in compensation for every $1 the worker received). The ratio was up from 604-to-1 in 2020."

https://www.theguardian.com/us-news/2022/jun/07/us-wage-gap-...

[soueuls]

1. I am 27 but I could be retired if I wanted (lucky break in crypto + living in a developing country + big enough portfolio. I don’t want to retire. I have been programming since I was 13 years old, it’s what I enjoy doing. I would probably need to make a conscious effort of not being paid, that would be a bit absurd.

2. I don’t need more work/balance, 1-2 days off à week is enough for me. I don’t need weeks of holidays. I am working remotely in a nomad fashion, I don’t need time off to travel.

3. I am using my excess cash for fun experiments, your cap would not allow me to do that.

4. Except for unique circumstances, people making half a million a year, are not in the rat race. That allows you to buy roughly 8-10 appartements every year in some countries. They keep working because it’s something they enjoy doing.

What would I do if stopped working?

I would basically keep coding but make 0 money doing it while there are people willing to pay me?

Does not make any sense

[mindcrime]

What do you think of putting socially a limit on how much an individual (not family) can earn?

I think that neither you nor anyone else has any standing to impose such a thing. And I further think that anyone who tries can go fuck themselves. shrug

[rrgok → mindcrime]

Beside the rudeness of your comment shrug, it is already implemented for different reasons in professional sports[0]. I was just extending this concept for all professionals and have a healthy discussion about it shrug.

[0] https://en.wikipedia.org/wiki/Salary_cap

[mindcrime → rrgok]

Beside the rudeness of your comment

I don't see anything rude about it, but YMMV.

it is already implemented for different reasons in professional sports

Yes, I'm quite aware. The thing is, athletes who choose to, say, play in the NFL voluntarily accept the terms of the agreement between the NFL and the NFLPA. If they don't like it, they can get a job doing something else.

I was just extending this concept for all professionals

And that's the problem. Who's going to tell someone what their universal "salary cap" is - and what possible standing could they have to make such an assertion? Who has any standing to tell me I can't negotiate whatever terms I can reach with a prospective employer? Or maybe I do purely service based work where the more hours I work, the more $$$ I make. Who can tell me that there's a limit (other than that imposed by physical reality) to how many hours I can work?

will somehow discourage people from running this rat race and accumulating so much wealth.

Maybe some people like the rat race? Or at least find the prospective reward sufficiently motivating so as to justify participation. As long as its voluntary, it's really no one else's business.

It will inevitably put in every person mind the idea of work and personal life balance.

Great. But for me, that's my decision to make, not yours, or anyone else's. This is my life and I'm the one in control. Likewise I have no standing to dictate the terms of how you live your life.

[5bolts → rrgok]

plus in your sports example, thats just what the team can pay the player. the player has several side gigs without a cap - so if driven they can make 100x more in say sponsorship deals than the team actually pays them. so no "Real" cap in play, just a cap from one income stream. (and thats only there to prevent one super rich guy like Bezos from buying up all the best players for each position and stacking the deck. No one would watch if the same team always won... so realistically its a marketing thing)

[aintmeit]

Things like caps are purely for show. Companies will find a way around it. Who's going to stop companies from wanting to grow indefinitely? You couldn't if you tried.

[verdverm]

It might be worth understanding how Stalin removed capitalism from the USSR and how that turned out. Then look at China, which is also communist, and has had issues with unlimited, and now trying to limit, income potential. Hopefully you can answer your own question after studying the history a bit.