What is the maximum wage?
Maximum wage is a legal limitation of the amount of money that an individual can earn as a salary. It is an economic concept to combat the inequality of income and inflation. The idea of the maximum wage is functionally related to the minimum wage, which is the lowest hourly wage that employers can pay to employees under the law. While the minimum wage Act is common in most of the main economies to protect the standard of living of the country, the Maximum Wage Act must still be widely carried out in countries that include capitalism.
income inequality is a problem that governments are struggling as part of the Social Security program. When the difference between what earns the lowest wage gainful and the highest earnings, it becomes too serious, plunges society into the two -stage structure. There are poor people and wealthy people and reduced "middle class". This type of economic development is mature for social unrest.
In the US, for example, some corporations apply to its CEOFiceers (CEO) up to 300 times higher wages of their lowest paid workers. Many economists promote wage disparity at the highest level at most 25 times the lowest paid workers. Some experts believe that growing wage disparity is part of the root of corruption, market busts, economic decline and higher inflation.
In countries based on capitalism, it is difficult to support a system that would limit the ability of a person to earn as much as he is able. Such a proposal may seem to be anti -capitalist on his face and against the values of the free market system. Government proposals that seem to be based on the concepts of wealth sharing are often referred to as the "socialist" brand. Instead, politicians sometimes submit proposals for maximum wages to reduce the reception of certain society segments, such as CEOs of the main corporations. For example, a country's government mayAll in a specific industry such as the banking industry, and hover the idea of restricting the salaries of the executives of this industry as a result of receiving public money.
Although the maximum wage law is not a preferred approach in most countries on the free market, it has been successfully designed in countries that follow a more socialist model. For example, Venezuela has made a maximum wage law for government workers. This has ordered that public salaries cannot be more than a certain percentage higher than the minimum wage.