Todd: So Greg in the last one we were talking about minimum wage, and this is one of the topics in your book and it's about income disparity. One of the chapters is about income disparity. Now the opposite would be should there the a salary cap, which would mean that basically you could only earn so much, like let's say you can only earn five million dollars, ten million dollars. Nobody could earn more than that. What do you think about that concept?
Greg: I personally agree with a salary cap. I'm not sure how much it should be, but definitely the discrepancy in wages is way to great. There's too many people who have to ... a husband and a wife work hard forty hours or more, both of them. They're barely, barely getting by, and then you got all these other people who are just buying Rolls-Royce cars and Mercedes, and country clubs and it's just not fair.
Todd: But, well, for one, though I mean, Mercedes and Rolls-Royce and those are products that provide jobs, so I would argue with that. Actually, as you can probably tell, I'm against the idea mainly because, you know, I think that hurts innovation. You know, you look at people like the CEO of a very powerful internet company or software company, and you know, take google for example, I'm sure that they make more than ten million, but they're service is used so much around the world, that they should get that money, and if people couldn't ... hang on ... if people couldn't get ... couldn't earn that salary then maybe they wouldn't have the same motivation and drive to be successful and that people would lose out as a result.
Greg: I think that there's not proof to say that these people are making these products because they're making such tremendous amounts of money. What came first: the product and then they got the money in most cases. There's ... these people could be ... society can have all sorts of wonderful products and still have a fair income system, and I have nothing against people becoming rich or making a good salary, a very good salary, but not such an incredible gap. You have executives of some major international corporations that are making more money than millions of people in the world make combined. The opposite side of not having a cap is that you have people who are making too little, and those people are also working hard. Those people deserve validation. Those people deserve a good life standard which millions of people across the world are not having.
Todd: Well, I think ... well, I agree with you about that. I agree with you about that. That there's people who work hard and that they're under compensated, but ... and they're a lot of people that get grossly overpaid but I think that's just a problem of management and that in some cases so people do deserve millions and millions, perhaps billions of dollars is they have really contributed to the product or the outcome. So, basically we're gonna disagree on this one.
The discrepancy in wages is way too great.
We use the phrase 'discrepancy in wages' to talk about the difference between how much money people earn. If, for example, one person makes 18,000 Euros a year and another makes 2,000,000 Euros, the discrepancy in wages is very big. Notice the following:
- Though American women have achieved social equality with men, discrepancy in wages still exists.
- The discrepancy in wages in many emerging economies is fast becoming a politically sensitive topic.
They are barely getting by.
When we are 'barley getting by' that means we have very little money to buy basic things like food, clothing, and shelter. Here are two samples.
- Though South East Asian economies are growing fast, in some countries the majority of people are barley getting by.
- As a kid, my family was really poor. Both mom and dad worked, but we barely got by.
I think that hurts innovation.
Here, Todd thinks that limiting salaries discourages people from thinking of new ideas or ways to do things. Notice the samples.
- Capitalists would argue that socialism hurts innovation.
- Like it or not, money motivates most people. No money, no motivation, which hurts innovation.
Hang on a minute. I did not say that.
'Hang on' simply means wait a moment. It's very informal and a bit direct. Here are two samples.
- Sorry, that's my phone. Hang on a minute while I take this call.
- It's cold outside. Hang on a minute while I get my coat.
People would lose out as a result.
When we 'lose' out', that means something has had a negative effect on us. Notice the sample sentences"
- Some economists believe that when we raise corporate taxes, the cost is passed on to consumers and people lose out.
- Limiting salaries hurts innovation and both people and the companies that employ them lose out.
I have nothing against people becoming rich or making a good salary.
When we have nothing against something or someone, that means we do not have a problem. Notice the following:
- I have nothing against professional athletes, but I think their salaries are too high.
- My dad says he had nothing against me studying abroad.
I think some people get grossly overpaid.
When someone is grossly overpaid, they are paid, in the opinion of some, way too much money. Notice the following:
- I think it's unfair that some people are grossly overpaid, unless of course it's me!
- David Beckham is a great player, but he's getting older and slower now so to be honest, I think he's grossly overpaid.
Below are some more great lessons!
hang on • lose out • nothing against • overpaid