There is a great deal of concern about CEO income. Some say it’s 300 times what the average worker makes. Let’s say we pass a law that makes CEO income only twice the average, or only the average of workers in their company. We will have solved the income equality problem. And, guess what…there is no difference for the workers at the bottom. Punishing somebody at the top does nothing to help those at the bottom of the income scale. Would it not make MORE sense to focus on how we can improve the income level of those at the lowest level by improving their value in the marketplace? Let’s not kid ourselves that wages set themselves or can be realistically set by anything but the value of the work being done. After some basic level, which we call minimum wage, wages are set by the value of the work being performed in the marketplace. Work is a commodity just like anything else in the world. Some work is worth more than other work. All people are equally valuable. But all work they do is clearly not equal. Wages are not set by the value of the person but by the value of the work they do. Therefore, the way to raise lower level wages generally is to increase the value of the work they do! Pushing down the top does nothing to increase the value and wages of the people at the bottom of the scale. In fact, because so very few people have the ability to lead a massive enterprise successfully, pushing down the income at the top will take some of the people with the ability to do that job – an indispensably important job in any organization – to lower levels and therefore may result in the people at the bottom of the scale losing their jobs or lowering their income because the leadership is not as competent. An incompetent CEO can result in thousands of job cuts, pensions lost and the retirement funds of senior citizens that are invested in mutual funds to tank.

Take a look at the worlds most valuable company, as of this writing; Apple. For over a decade after the initial high flying days of the company, it decreased in value and performance. At one point in the late 1990s, even after Steve Jobs returned, the stock was in the teens and the press referred to the company as “Beleaguered Computer maker Apple”. Michael Dell advised to close the doors and sell off the assets. A series of very intelligent, highly educated and respected CEOs came and went. And the company declined. Then Steve Jobs, for all his foibles, returned, saved the company and lead it back and beyond to the place it is today – the worlds most valuable and respected company. One leader succeeded in changing and saving the company where many other very capable people failed. A CEO of that nature is worth his weight in diamonds in terms of just basic economic reality. The other people were and are valuable people. They couldn’t do the job Jobs did. Jobs was worth any amount of money, not because of who he was but because of what he could accomplish. I happen to be at Apple during that time – and could NEVER have done the job that he did, nor could anyone else at the company or, as time revealed, could anyone else seemingly.

Cutting the top income job in the company does not automatically increase the bottom income level, although it does solve the inequality gap. At least until we run out of that rare commodity – a good CEO. If we are smart and compassionate and care about the people at the bottom of the scale, forget about the gap between the CEO and the line worker and concentrate on how we can make the line workers work and skill set more valuable. Then you will raise their standard of living. Anything else is just feel good nonsensical non-economics and lacks any chance of helping the lower paid worker.