Those philosophies are not the only way to do things. Workers don’t have to be paid the minimum possible. At some point, wealth accumulation becomes so extreme that it’s immoral, like when people have so much money that they could never possibly spend it and are spending $300 million on a new boat or whatever. Tax rates used to be much, much higher on wealthy people and they still were “reaping the benefit of their innovation”. Even better than paying taxes would be giving the money to employees. Paying a janitor (not sure why that is your example of someone who is lesser) enough money to buy a house and pay for their children to go to college is not a waste. It’s also how the economy works. Capitalists and the wealthy class in the US seem to think they can keep all the money and economically starve their employees without realizing that the public has to have enough money to buy their products.
If I need to pay my employees more because my company is more profitable, then the government is basically telling me that my cost of labor is far more expensive than my smaller competitors. It will result in only small new companies being able to invest in innovation at a large risk and big companies not having the capital to invest in the kind of research and development that only a large venture can do. Amazon spends ~$43B on R&D. If they had to pay tons more to employees, we wouldn’t have things like their streaming devices, content offerings, or warehouse and logistics improvements that allow for packages to arrive same or next day.
workers don’t have to be paid the minimum possible
Ideally, the market dictates salary in capitalism. This means that a worker can shop themselves around if you are not paying them enough. Where this has broken down a bit is in corporations intentionally and unintentionally colluding on appropriate pay for positions across an industry. The get consulting groups to indicate whether they are in line with industry practices. This can also result in employees getting pay bumps if a company has is having trouble retaining talent. If the government tries to break the organic model by imposing minimum pay rules, then it will hurt small businesses. If it creates a percentage system based upon company profits then you end up having your talent retire early. It is not really a tenable model to keep a business afloat. You would end up with these companies that exist and then go away because the employees have extracted all the wealth they need, so you wouldn’t have prolonged enterprises like Amazon that offer an extremely useful service because their wild success means that it becomes impossible to figure out how to hire people to new positions because the revenue share for one employee would far exceed what other companies could offer, so you have to somehow either find the best person ever for that position or some kind of hereditary system forms. The use-case doesn’t make much sense. If you simply cap the CEO’s salary and say that they are not allowed to make many multiples of standard employees and standard employees cannot make many multiples above the standards for their roles in the industry then maybe that would work, but it seems like an overreach of government.
Those philosophies are not the only way to do things. Workers don’t have to be paid the minimum possible. At some point, wealth accumulation becomes so extreme that it’s immoral, like when people have so much money that they could never possibly spend it and are spending $300 million on a new boat or whatever. Tax rates used to be much, much higher on wealthy people and they still were “reaping the benefit of their innovation”. Even better than paying taxes would be giving the money to employees. Paying a janitor (not sure why that is your example of someone who is lesser) enough money to buy a house and pay for their children to go to college is not a waste. It’s also how the economy works. Capitalists and the wealthy class in the US seem to think they can keep all the money and economically starve their employees without realizing that the public has to have enough money to buy their products.
If I need to pay my employees more because my company is more profitable, then the government is basically telling me that my cost of labor is far more expensive than my smaller competitors. It will result in only small new companies being able to invest in innovation at a large risk and big companies not having the capital to invest in the kind of research and development that only a large venture can do. Amazon spends ~$43B on R&D. If they had to pay tons more to employees, we wouldn’t have things like their streaming devices, content offerings, or warehouse and logistics improvements that allow for packages to arrive same or next day.
Ideally, the market dictates salary in capitalism. This means that a worker can shop themselves around if you are not paying them enough. Where this has broken down a bit is in corporations intentionally and unintentionally colluding on appropriate pay for positions across an industry. The get consulting groups to indicate whether they are in line with industry practices. This can also result in employees getting pay bumps if a company has is having trouble retaining talent. If the government tries to break the organic model by imposing minimum pay rules, then it will hurt small businesses. If it creates a percentage system based upon company profits then you end up having your talent retire early. It is not really a tenable model to keep a business afloat. You would end up with these companies that exist and then go away because the employees have extracted all the wealth they need, so you wouldn’t have prolonged enterprises like Amazon that offer an extremely useful service because their wild success means that it becomes impossible to figure out how to hire people to new positions because the revenue share for one employee would far exceed what other companies could offer, so you have to somehow either find the best person ever for that position or some kind of hereditary system forms. The use-case doesn’t make much sense. If you simply cap the CEO’s salary and say that they are not allowed to make many multiples of standard employees and standard employees cannot make many multiples above the standards for their roles in the industry then maybe that would work, but it seems like an overreach of government.