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Rather than a mandatory minimum wage, would it be possible to institute that the lowest total compensation is a certain percent of the highest compensation. For example if a CEO makes 1 million, the lowest an employee could be paid is 50k, or 5% of the top pay.

The intent of this isn't necessarily to increase the lowest paid employees, but to shrink the pay gap.

Has this ever been tried? What are arguments for or against?

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  • Let us continue this discussion in chat. – Relaxed Oct 11 '15 at 20:11
  • Comments are not for extended discussion; this conversation has been moved to chat. – Sam I am♦ Oct 12 '15 at 15:01
  • Effectively, this is more likely to put a cap on CEO pay than to increase the lowest salaries markedly (you can frame the rule in the other direction but the company can still/would be forced to reduce the compensation of the CEO to make sure other wages fall into the window). Caps on CEO pay have been discussed and almost been tried in Switzerland so maybe you can find relevant material by looking for info on that. – Relaxed Oct 13 '15 at 9:04
  • I've had this thought myself many times, but I never thought to ask it. Thanks for doing so! – Bobson Oct 13 '15 at 16:09
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Has this ever been tried?

Yes, in 2013 there was a proposal about limiting the highest wages in a company at 12 times the lowest pay in Switzerland.

Final results showed that votes against carried the day by 65.3% to 34.7% in favour.

Sources :

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  • 1
    They tried to try but they did not really try so we are still left to guess what the actual effects might have been. – Relaxed Oct 16 '15 at 6:36
  • Actually, you are right... – Sir Sy Oct 16 '15 at 10:03

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