Why is there such a huge spread in salaries? Why do CEOs make tens or even hundreds of times the money of the lowest paid workers of their respective corporations?

Many on the Left have simply declared that there is no good reason why, and have thereby advocated such brute force measures as minimum (or “living”) wages, pro-union legislation, steeply progressive income taxes, and/or mandated benefits. The results of such actions have been mixed at best; some of these actions have resulted in unemployment – at times massive – while others have been bypassed using loopholes.

To really produce a narrower gap in income levels, it is necessary to honestly ask why they are so uneven in the first place, be willing to accept the answer, and then ask how to change the underlying conditions that produce the large income spread.

That is what we will do in the next few pages. Not surprisingly (to those who have read other chapters), we will find many ways in which the government is currently making the wage gap larger than it would naturally be in a truly free market economy.

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Copyright 2003, Carl S. Milsted, Jr. All rights reserved.