Question

2. Consider the high and low end of our social classes. There are some that consider CEOs overpaid and the minimum wage too low. Do you agree or disagree? How can the disparity between these two classes be realistically reduced?

Answer 1

• I do agree,the wage disparity is huge to the extent that CEOs are over paid and labour is underpaid.The ideal pay ratio for CEOs to unskilled workers was 4.6 to 1; the estimated ratio was about double, at 10 to 1.
• The lack of awareness of the gap in CEO to unskilled worker pay which in the U.S. people estimate to be 30 to 1 but is in fact 350 to 1 ,likely reduces citizens’ desire to take action to decrease that gap.Huge salary imbalances between CEOs and the people who work for them can send bad vibes throughout an organization, weakening loyalty and eroding the talent pool.
• Overpayment leads to an increased wage bill. That's money the shareholders would otherwise get. Overpayment of the CEO also leads to turnover at lower levels.Wage gaps may also increase the tendency for individuals to perceive more inequity than actually exists, which can amplify the dysfunctional effects. More boards of directors should start looking at executive pay as a social, and not purely economic, corporate issue.
• It is discouraging for the lower class employees since they also work as much hard as the upper class employees.And everybody wants a good life,for which money is needed.Lower pay decreases the productivity of the workers as well,since they feel the injustice done to them.
• The pay gap will never improve unless organizations take a stand to make wages more fair. Here are a few things companies can do to decrease the pay gap and keep their employees happy-
• Cap executive salaries.-Eliminating the pay gap altogether may not possible for some companies, but instituting a salary cap can keep the gap from growing wider.
• Capping salaries shows employees at every level that the organization values and cares about them.In addition, employees who feel valued by their employers are more likely to be satisfied by their job, a 2014 survey conducted by the American Psychological Association found. Capping salaries shows all employees that their skills and work are valued and important to the company.
• Be transparent.-New rules by the SEC will require public companies to disclose the ratio of CEO pay to median worker pay in 2017, but employers should start being transparent about salaries before then.This transparency allows employees to see the possibility for growth within the company. The numbers and formula open the door for employees to have meaningful conversations about what they need to do to increase their salaries.
• With a clear idea of how to boost their salary and position, employees are more motivated to do so.Offer opportunities for upward mobility and raises and tell employees exactly what they need to do to achieve them.
• Invest in learning and development.-Low-skilled workers will earn less than experienced ones, but employers can offer training and development to increase their worth. And employees are eager for these opportunities.Instead of only rewarding employees with higher salaries, companies should consider compensating them with education and professional development.
• Pay for courses, advanced degrees, and invest in other programs to grow the knowledge and skills of employees.More skills means more opportunities and, ultimately, more money for workers. Companies should emphasize the value of professional development.Education is important and valuable to professionals as it increases their worth, drives their growth, and enhance their career.