Wall Street needs a pay-equity rule
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In his Oct. 23 Business column ["Pay restrictions may not fix underlying risk-taking"] about the Federal Reserve's and the Treasury Department's imposition of pay limits on some Wall Street executives, Steven Pearlstein correctly noted that these measures, proposed "to contain growing populist anger," will probably not have their desired effect. But Mr. Pearlstein, and indeed almost all who have commented on this story, miss the real point.
The popular anger over obscene Wall Street salaries and benefit packages is not directed toward how they provide incentives for risky trading practices; it is about how they are one part of the dangerously escalating divide between the wealthy and the poor in this country. What is needed is not a cap in executive pay but rather equity in pay throughout a company.
No one in the federal government makes more than 40 times what the lowest-paid worker earns. Let executive pay be as high as it can be, as long as it is not 40 times what the cleaning staff gets. Like an eight-hour workday or restrictions against child labor, we should make the 40-times pay rule the law of the land.
Murray C. McClellan, Annapolis
