Saturday, August 29, 2015

Paying the rich to pay the poor

Peter Georgescu has a message he wants America’s corporate and political elites to hear: “I’m scared,” he said in a recent New York Times opinion piece. He adds that Paul Tudor Jones is scared, too, as is Ken Langone.

Georgescu is former head of Young & Rubicam, one of the world’s largest PR and advertising firms; Jones is a quadruple-billionaire and hedge fund operator; and Langone is a founder of Home Depot.

“We are creating a caste system from which it’s almost impossible to escape,” Georgescu wrote, not only trapping the poor, but also “those on the higher end of the middle class.” Georgescu has the remedy: “Invest in the actual value creators—the employees,” he writes. “Start compensating fairly (with) a wage that enables employees to share amply in productivity increases and creative innovations.” They have talked with other corporate chieftains and found “almost unanimous agreement” on the need to compensate employees better. How to do that? Get the government to pay. “Government can provide tax incentives to business to pay more to employees.” That’s this big idea. The government will subsidise corporate wage-hikes with tax-cuts. Their proposal is to basically have the government pay them to pay their employees more.

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