Monday, April 16, 2018

How a New SEC Regulation is Going to Screw Low Wage Workers

 A new SEC regulation requires companies to disclose the pay ratio between executives and workers.

In the current confused egalitarian environment, there is no CEO who wants to show a high executive pay ratio relative to workers.

If I am the CEO at a firm that employs a lot of low wage workers, I am going to start automating wherever I can and eliminate low wage workers so that the executive to workers ratio shrinks.

Less demand for low wage workers means lower wages for them and if the market rate for some of them drops below the minimum wage, it will mean unemployment.

-Robert Wenzel  

1 comment:

  1. It's more likely that the low-wage workers will be outsourced as contractors. Corporations used to keep mail clerks, lunchroom chefs, custodians, receptionists, and security guards on the regular payroll often with full benefits as a goodwill gesture. Now they've all been outsourced to temp firms due to the minimum wage and increased regulations.