Maximum Wage

We’ve all heard of the minimum wage: a price floor for labor. But what about its alter ego, the maximum wage? Well, it’s pretty much what is sounds like: a price ceiling on income.

Oftentimes, the maximum wage is not set as a nominal dollar amount like the minimum wage, but as a factor of the minimum wage. For instance, a maximum wage might be “any one person can only make 200x the income of the current minimum wage.”

A maximum wage exists in Cuba and Egypt, and there were talks of a maximum wage in Switzerland. While setting a maximum wage doesn’t necessarily redistribute wealth, it does put a cap on how much top earners are legally allowed to earn.

It can also be set on a specific group, like in Venezuela for public officials only (the highest level of public office can earn a max income of 12x the minimum wage).