I agree with letter writer Dirk DeRooy (“We’re jealous of wealthy people” Feb. 6) that greed is an affliction which all share. However, there are built into the labor system limits to income. Once an hourly or salaried individual reaches those limits, income does not continue to rise. Your value to your employer has reached its maximum. Since your salary is just another item of cost, it must be managed carefully or the business owner is at risk of over-pricing his goods or services.
In times of recession, you may be made redundant to lessen the cost of goods or services provided. Do these same rules, which constrain greed, apply to management? Yes, but as you work up the hierarchy, the raises become more generous and various forms of compensation become available, which are not available to lower levels. These generous forms of compensation are rationalized with arguments such as, more responsibility entails greater risks and therefore greater rewards are required. In recent years, generous rewards are commonplace and have produced super wealthy corporate executives whose pay exceeds all sensible limits of value received to the corporation when compared to the cost of compensation received. In the most egregious cases – for example Enron and Global Crossing – where the system of constraints essentially failed, the top executives looted the company. Owners and lower level employees lost billions.
The remedy to this type of behavior is prison time, not tax reductions or dismantling government oversight. Part of our economic malaise today is due to financial irresponsibility on the behalf of dozens, if not hundreds, of major corporations. Greed is a problem only when our societal constraints fail to constrain the greedy. Today, in our corporate world, the constraints of greed are failing at the top, not the bottom of the wage totem.
Everett
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