The minimum wage is an attempt to ensure anyone working full time can support themselves. It is flawed as some people can not produce at this level. They are essentially unable to get work as employers can not afford to hire them.

Alternative 1:

Tie the average wage and the highest wage(compensation) together within a business. Have a law which mandates the highest compensation within a business can be no greater than (for example) 20 times the average compensation.


Alternative 2:

Have a reverse income tax. How this essentially works it that all citizens are given a subsidy. As a citizen earns increasing levels of income, the amount of this government provided money is gradually reduced until it is zero. For example, everyone could be given a subsidy of 8 thousand. eventually this personal subsidy would be zero when a person earned outside income of 20 thousand. Earning 5 thousand would still get you a subsidy of 6 thousand, etc.



Are there any other alternatives ? What can you see as the pros and cons of each of these three systems ?

As evidenced in Ben & Jerry's Ice Cream (they've tied their compensations), this doesn't work if you have to hire an outside executive.



Where would the money come from for this reverse income tax? In effect, it won't be any reverse tax at all. It'd simply be taxing the rich.

Another alternative. Have no income tax. We can switch to a national sales tax for governmental income. The poor, who would buy less things, would pay less tax. The rich, who would buy more things, would pay more tax.

Alternative 2 does cross the line between a minimal wage alternative and tax reform. When talking of tax reform another alternative besides a sales tax is a transfer tax where and exchange of money is taxed at a flat rate. It seems to be a better way than sales tax to get a return on the value of having a currency and tax those who use it.

Is Alternative 1 something like a maximum wage, based on a case by case basis for businesses? Am I getting it all wrong?

Alternative 1 would end run away coporate board greed. The salary of the top CEO could not be raised unless all people in the business get a wage increase. When the business makes a huge profit, everyone who works at the business would get a wage increase instead of the top end giving themselves a higher per cent raise. It would also end the CEO getting a raise when the business does poorly. This is because the average compensation and the top compensation are linked via a rule that the highest compensation in a business can not be greater than 20 times, for example, the average wage in the business.

We can't have a national sales tax. The poor spend more (percentage-wise) on stuff. Would you tax food?