What would be that economic effect of this reform?

[DC Al Fine]

Let's say a typical CEO makes $10 million, and a lowest paid full time employee makes $10/hr. If we assume 40 hours a week and two weeks unpaid vacation, that works out to an average cap of $240k.

A few things I can see happening:

1) Firms would outsource low paid work to other firms, particularly in small to medium sized businesses in relatively high paying fields.

2) Owner managed businesses would shift their compensation from salary to dividends.

3) Large public companies would still compete for talent by offering whatever compensation is not covered in the law. What form that would take would depend on how the law is written.

I don't really see it having much of an effect on low wage employees given the relative number of top executives and low wage workers. Walmart increasing their cap by say $12,000 would cost a over $1 billion a year for example.