Originally published August, 25, 2008

Recovered after first disaster February 4, 2010

When you start talking about a man’s paycheck, the discussion is going to get serious in a hurry. Over 95% of you don’t need to worry, I’m not talking about you. I’m not talking about the poor or the rich, I’m talking about the super rich. I’m all for the American Dream of being able to work hard and reap the benefits, but there’s been a little too much reaping going on at the high end. Top salary and benefits packages continue to escalate. Is there such a thing as too much? How much is too much? Let’s find out.

Minimum wage is still less than $10/hr. Manufacturing jobs might get you $20/hr. Electricians and plumbers and other skilled trades are making $50/hr on up, but they have to buy your own tools. Technology experts command $100-200/hr. The big time lawyers, representing the big time innocent until proven guilty, are getting three, four, five hundred dollars per hour. So just to keep the math simple, let’s settle on $1000/hr. Your pay rate is one thousand dollars for each and every hour worked.

So, how many hours a week are we going to work? Don’t get greedy and say 200 hours a week. There are only 168 hours in a week. Once again, to keep the math simple, lets say we’re going to work 100 hours per week. Go ahead and calculate your weekly paycheck, not too shabby, eh? Finally, I’m going to require a 2-week unpaid vacation. So after working 50 weeks a year, 100 hours a week, for 1000 dollars per hour, how much did we make? Five million bucks.

My point is this: I’m all in favor of people being able to make lots of money and pay a fair and reasonable tax, but at some point the income becomes obscene and excessive. And at that point, I think the tax rate should become obscene and excessive as well. Before you get bent out of shape, keep in mind that what I’m saying doesn’t affect 95% or more of the population. Most of us didn’t earn anywhere near $5 million last year.

The groups most effected by this include corporate leaders, professional athletes and entertainers. There are certainly more, but this is representative. Many corporate leaders are making more than $5 million a year. What gets me is these large payouts to leaders that failed to produce results. Carley Fiorina got paid over $20 million when she left HP. I have a problem with that.

The professional athlete is in a little bit different situation. They’re just sharing the wealth with the team owners, right?. After all, they’re the reason we fans show up. We are paying to see T.O., not Jerry Jones. They’re entitled, right? My response is; to a point. I’m all about the American Dream, but I think there can be too much of a good thing.

So what happens to the money if it doesn’t go to taxes? You could give the offensive line a raise. This means more rich people, that’s a good thing. You could cut the price of a ticket in half. Being able to afford to take the family to game is a good thing.

Athletes will say that their careers are often very short. Good point. So lets look at the average Joe. Assume for the moment that he enters the work force with a starting salary of $100,000 (that math thing again). Then assume he works for 50 years, longer than most of us will work. And a hundred thousand is still pretty good take home pay. What do you get? Five million bucks. Any further discussion would include the words athlete and whine in the same sentence.

Similar results could occur in the corporate world. For every executive making over $5 million, there are hundreds of minions underneath, making it all happen. You could give them all a raise, or at least a bonus. You could make a small number of them rich. More rich people, always a good thing. Cheaper products and services, I like that. Increased pay outs to the shareholders, Wall Street likes that. Make a charitable contribution to a truly charitable organization. Or pay taxes.

Now, for the 5% who want to lynch me right now, get over your bad self, you ain’t that good. Nobody is. That’s my point. I can only imagine you’ve had a moment where you’ve said to yourself, ‘I’m filthy, stinking rich!’. Perhaps you yelled it at the top of your lungs. You know it too.

This is not so much political commentary as it is a numbers thing. Five million is a huge number. We throw big numbers around all the time, but we don’t really grasp the significance. We lost sight of how big five million is. In a world of billions of dollars in oil profits, and trillions of dollars in national debt, five million dollars is chump change. To a family, it’s a lifetime of income. In reality, most of us won’t see anywhere near that in our lifetimes.

Just because we can afford to pay these guys all this money, doesn’t mean we should. Econ. 101 taught us about the marginal propensity to consume, and we maxed out on some of these guys a long time ago. Couldn’t this money be better used elsewhere? Couldn’t this money get distributed a little differently? Which brings me to a future topic, Greed.