April 15, 2009

Introduce a maximium public wage

Posted in Your Ideas · 2 comments ·

I found out recently (on this forum) the Dutch have a maximium wage which is earned by their prime minister and nobody else in state employment can earn more…

I think this is an excellent idea and we should adopt it here….

Lets say its at EUR150,000/year

1) We already have a minimum wage, everyone knows what it is, its an hourly rate.. Having a maximum would set an upper limit.
2) I’d like it to be a maximum amount of money that anyone could get from the state in a given year, whether through wages, pensions, grants, subsidies, directors fees, bonuses, even overtime. whatever….
3) It would stop golden circles where the same people are on 20 state boards and all know each other.
4) It would increase employment…. If this meant we have 10,000 hospital consultants earning 150,000 a year working 20 hours a week, wouldnt it be better for us than having 5,000 of them earning 300k each.
5) It would have an effect on other salaries such as trade union leaders, industry body spokesmen etc… Actually, it would be great to have this limit applying to all registered charities and organizations receiving government funding.
6) We could apply it to all organizations and individuals bailed out by the state, e.g. banks, developers etc….
7) A lot of companies provide professional services or contractors to state agencies at ridiculous rates… e.g. tribunial lawyers, PR companies, IT consultants etc…. It could be used to get value for money in this area.
8) It makes things simple, there is a minimium and a maximium
9) It provides everyone working for the state, an idea of what they are worth. To keep it simple, say the min wage resulted in a salary of 15k, the max 150k…
10) It would have a moderating effect on pay elsewhere and improve our competitiveness

Reasons against it…
1) Well it could be argued that this would stop the best talent from working in the public sector
2) It could push a brain drain from public to private.

The goal is not to punish, 150k is a hell of a good salary, the goal is to get value for money.

  1. Tim

    Garry, That is inaccurate;

    No-one in the state is allowed to earn more than the Prime Minister of the Netherlands – not bankers, “business people”, no-one, is the way it was told to me.

    I find that, frankly, inexplicable, but I think it would be worth trying.

  2. Garry

    Hi Tim, I dont know the Dutch system at all. I was interested when I saw the comment mentioning it posted on the site here.

    As regards implementing it across the private sector……Theres arguments for how this would work but Ive no problem in principal with having a maximium as well as a minimum there also… The multiple between the best paid and low paid in all sectors has gotten out of hand and it should be brought back into line…

    I think that radical change is needed to get the country through the next few years…

    And the more I hear promises of action which are then followed by backtracking, the more I think something very simple and easy to implement is needed. Otherwise, a decision gets announced and then people backtrack…

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