FAIR PAY REDUCE WEALTH GAP
As far as we know the Elon Musk’s proposed $50 Billion Tesla bonus is still up in legal limbo because the courts have not yet finally decided whether its legal. The audacity to request such a bonus, however, is breathtaking and it lays bare the issue of the vast wealth and income inequality that exists today. In Rao’s Solution (a novel by David Dixon Lentz) links for which are on this site, it’s pointed out that the pay gap ratio between the very highest paid CEOs and workers in the 1960s was about 100 to 1. Thus in a company where workers made $5,000 per year, CEOs would make roughly $500,000. Today, CEO’s make far more than that 100 times what workers make. 700 to 1 is not unheard of for some companies. This is contributes to the rise of oligarchy and the politically corrupting influence that money has on the American political scene. Elon Musk contributed well over $250 million to Trump’s 2024 Presidential campaign and Musk’s deep pockets make him a very influential force especially in Republican politics. Political decisions should be based on the merits of the various arguments presented by the candidates. Not on the basis of who has the deepest pockets and/or the largest campaign war chest.
In the last 10 years, Democrats have the mourned loss of the support that they traditionally had from workers at election time. Rao’s formula might well provide Democrats with a way to reconnect with workers. Folks are still struggling to catch up with the inflation caused largely by supply chain disruptions which, in turn, were caused by Covid, the Ukraine War, the bird flu, during 2021 through 2023. Increased federal deficit spending also contributed to inflation. Regardless, of the causes, however, worker wages have to catch up with the price increases caused by past inflation. This is because, for most goods (things like gas being the exception) it is very unusual for prices to come down once they’ve gone up.
Rao’s Solution provides one very unique way to go about raising worker pay. If Rao’s formula is put into law it would: start the process of reducing the unacceptable gap in CEO versus worker pay. Reduce the influence of the plutocrat/oligarchs in our society; and help everyone fight inflation by increasing worker pay. And, it would do so, in a way that is probably less inflationary itself than other ways of increasing worker pay.
Here’s an example of what Rao would require if Tesla’s board of directors were confronted with a request for a $50 Billion bonus where only Musk would receive all of the bonus funds.:
BETTER WAY TO PAY WORKERS MORE
REDUCE INCOME GAP BETWEEN CEOS AND WORKERS
UNDER RAO’s UNIQUE FORMULA
(in Rao’s Solution by David Dixon Lentz)
MUSK WOULD NOT GET ALL $50 BILLION
OF HIS REQUESTED BONUS
INSTEAD
EACH OF TESLA’S 141,000 EMPLOYEES
WOULD GET:….. $354,000
MUSK WOULD GET
“ONLY”………………. $35 MILLION
(NOT BILLION)
AND
PROBABLY LESS LIKELY
TO INCREASE PRODUCT COSTS
LESS LIKELY TO CAUSE INFLATION
Here’s the link to a page containing a video about Rao’s Solution: