 Thanks for coming today. We are delighted to host this extraordinary event this afternoon. I am Thea Lee, President of the Economic Policy Institute, and we are co-sponsoring this event with the Institute for Policy Studies, and delighted to see the Director of the IPS here with us, John Kavanaugh. So we have two wonderful guests today, both our old friends and wonderful people, Sam Pizzagotti, the author of The Case for a Maximum Wage, also with the Institute for Policy Studies. I'm having a little bit of microphone issues, and Sarah Anderson, who is the co-editor of the Institute for Policy Studies website, inequality.org, also a researcher and strategist on executive compensation, tax policy, Wall Street reform, and other inequality related issues. But Sam has been working on inequality and a maximum wage proposal for many years. In fact, he had an earlier book called The Maximum Wage in 1992. So he has been steadfast on this issue of trying to expand the horizons of what it is that we talk about, and we talk about policy solutions to inequality. And of course, back in 1992, EPI and IPS were talking about inequality, but everybody hadn't really entered the mainstream of the conversation at that point. And now when we look at the kinds of challenges we face in terms of the growth in inequality over those last couple of decades, it is kind of extraordinary. Maybe if we had listened to Sam back in 1992, we wouldn't have such a concentration of both economic power and political power as we have today. And so without further ado, I want to welcome Sam and let him give us a talk about his intriguing and inspiring new book, The Case for a Maximum Wage. Please welcome Sam Pizzagatti. Thea, thank you very much. It's really fitting to be here at EPI talking about inequality because the work of Thea and Thea, you and your colleagues over the past almost, I guess, four decades has been pivotal in helping people in the United States and around the world understand the extent of inequality and the impact of it. So let's get into things. And I'd like to start by talking about a forgotten American hero, the philosopher Felix Adler. He was born in 1850, oops, can people hear me if I just go, yes, okay, I'll try here. So he was born in 1851 in Germany. His father was one of the most famous rabbis in Europe. He came as a boy to the United States. He went on to become a very beloved professor of ethics at Columbia University. If you'd like the idea of kindergarten, thank Felix Adler. He introduced the idea of kindergarten to the United States in 1878. If you'd like the idea of protecting kids from industrial exploitation, thank Felix Adler. In 1904 he became the first chair of the National Child Labor Committee and over the decades to come he led the fight to eradicate child labor from the United States. Now some of us also thank Felix Adler for another contribution to American life. In 1880 he became the first America's first advocate for the idea of a maximum wage. In 1880 he proposed a 100% tax rate on income above the point, quote, when a certain high and abundant sum has been reached, amply sufficient for all the comforts and true refinements of life. And such a tax, such a 100% tax that Adler would tax away, and I love this expression, would tax away pump and pride and power. Now Felix Adler lived in a deeply unequal society, a society just like ours. And if I can use some Trumpian syntax, Adler won on kindergarten, he won on child labor, but he didn't win on the idea of a maximum wage. Could we win? Could we even try? Back in the first Clinton administration, as Thea noted, I did do some work on maximum wage in the early 1990s and the New York Times did a piece about that maximum wage initiative. It contemplated the idea of what would it be like to have a maximum wage. And it essentially sneeringly dismissed the idea. The article said the chance of passing a maximum wage these days is about the same as that of a snowball in Speaker Newt Gingrich's Georgia backyard barbecue. Back in the 1990s and the early 1990s, serious people, serious people just weren't talking about capping income, not in the United States, not anywhere in the world. But the world, I think, has changed. How has it changed? Well, in Switzerland in 2013, young people put on the ballot a national proposition to limit CEO pay to 12 times worker pay. That initiative was actually running very close to winning in the polls until corporate Switzerland ran a huge ad blitz in the last two weeks to defeat it. In France last year, in the presidential election, the key progressive candidate, Jean-Luc Mélenchon, I think I'm pronouncing that right, called for a maximum wage in his campaign's platform, and he came within four percentage points of winning that first round election. In the UK, the leader of the British Labour Party, Jeremy Corbyn made headlines last year when he talked about the need for a maximum wage. In South Africa, just last month, a business group did a public opinion poll and found that the majority of the South African people would support, do support, a cap on CEO pay. And finally, here in the United States, this past March, the deputy chair of the Democratic National Committee, Congressman Keith Ellison, said we need a maximum wage in the United States. So, I think that logical question is, what is stirring up all this interest in the idea of capping income? Well, I think three things are in play here. The first, inequality has become significantly worse since the early 1990s. The second thing, we now have a much better sense of how much maldistributions of income and wealth cost us as individuals and as a society. And finally, and maybe most importantly, we now have a politically plausible path forward to a maximum wage. So let's take those three items. How much more equal have we become? Well, let's look at average US income of the bottom 90% and the top 10th of 1% over the past 25 years. If we look at the bottom 90% average, we've essentially straight lined. There's been virtually no increase in the average income of people in the bottom 90%. The top one-tenth of 1% a totally different story. And so we see a situation where that gap between bottom 90% and top one-tenth of 1% has more than doubled just since 1990. And this inequality extends into our top 1%. So let's look at, there's our bottom 90%, average income 34,000. There's the bottom half of the top 1%, average income about half a million. There's the next four-tenths of the top 1%, average income about a million. And here is the average income of the top 10th of 1%. So in other words, the gap between the top 10th of 1% and the rest of the 1% is much, much greater than the gap between the bottom nine-tenths of the 1% and the bottom 90%. So should the good fortune, the incredibly good fortune of our top 0.1% concern us? Well, the conventional political wisdom in the United States says, don't be so envious of the rich. It says focus on helping the folks in need at the bottom. It says worrying about the rich just distracts and divides us. And this sense, this political mainstream consensus is deeply rooted, not just in Paul Ryan types, but across the political spectrum. So here we have David Bonnier, a progressive US Congressperson back in 1995, saying that the problem in America today isn't that some people are getting rich. The problem is most people are getting nowhere. And here we have Laura Tyson, who is President Clinton's top economic aid, saying if you have a penthouse with very rich people at the top and very poor people in the rat-infested basement, what do you do? Do you go after the people in the penthouse? No, you help the people in the rat-infested basement, and that's all you concentrate on. We have Howard Dean in his 2004 campaign for the presidential nomination, saying the thing to do is concentrate on the 90% of people who don't know what they need and make sure they have it, who don't have what they need and make sure what they have it, and not worry about the people who make $500,000 a year. Of course it's obscene, but so what? And then just last month, we had former Vice President Joe Biden say, I love Bernie, but I'm not burning Sanders. I don't think 500 billionaires are the reason we're in trouble. This nonchalance about soaring top incomes hasn't served our poor particularly well. The latest evidence came just last week from a new report out from economists at Georgetown and the World Bank. Alongside rising top incomes, the level of living of America's poorest has fallen. And that just tracks it over the past 25 years, a steady decline in the average living standards of our poorest. And this nonchalance about rising top incomes hasn't served average Americans either. In 2015, the United States had quadrupled the wealth of any other country in the world. But the deeply unequal distribution of these trillions has left typical Americans much less wealthy than their counterparts elsewhere. So if we look at this in Belgium, the typical Belgian, the median Belgian individual had $150,000 of net worth in 2015. The typical Norwegian, $120,000. Typical person in Japan, $96,000. The typical Canadian, $75,000. The typical Dutch person, also $75,000. The typical person in the US of A, the richest country on the face of the earth, $50,000. New York may be the ultimate test of trickle down. No city in the world has more billionaires than New York, according to account that just came out. New York has over 100 billionaires, 10 more than the next city on that list, which is Hong Kong. The top 1% of New Yorkers are now taking in 40% of the city's income. That's about double the income share of the top 1% nationally. One sign of this wealth, average sale price for apartments in New York. Last year, past $2 million for the first time. The typical townhouses in New York now average over $6 million. So how is New York doing on this trickle down test? The test to see is wealth trickling down? Well, it's not doing so well. As is laid out phenomenally powerfully in a New Harper's magazine cover story, that's just out. One in five New Yorkers, 19.6%, currently rate as officially poor. Back in 1970, less than 12% rated as officially poor. The typical New York household now spends at least one third of its income on rent. And 30% of households spend 50% or more. And this is the incredible statistic to me. The city's department of homeless services shelters an average of 60,000 people per night. And those amenities, a middle class life that used to make New York such a great place to live. They have been, the Harper's cover story notes, they have been torn away. And one striking example to me, the Central Park Zoo, which many of you may know and love, used to be free now for a family of four to get in the door to get past the gate costs over $60. Kevin Baker, the author of this Harper's cover story notes, look at almost any public service or space in New York, and you will see that it has been diminished, degraded, appropriated. They have never seen what is going on now. The systematic wholesale transformation of New York into a reserve of the obscenely wealthy. The sorts of realities that we're seeing in New York are fueling a counter narrative, fortunately. And this counter narrative notes that how much wealth a developed society generates matters much less for our well being than the conventional wisdom holds. What matters much more is how a developed society distributes that overall wealth. Because the more top heavy a society we now know, the less democratic that society will be, the less honest, the less trustful, the less caring, the less healthy, the less environmentally sustainable. How do we know all this? We know all this because over recent decades, there's been an explosion of research by economists, demographers, environmental scientists, sociologists, political scientists. An explosion of research that makes the case of how damaging inequality is to us. Two of the greatest scholars on this are Kate Pickert and Richard Wilkinson, whose book, The Spirit Level, has sold 150,000 copies worldwide. Thea hosted a salon for Richard and Kate when their spirit level came out. And this quote from them I think is very telling. If you want to know why one country does better or worse than another, the first thing to look at is the extent of inequality. And what Kate Pickert and Richard Wilkinson have done, they've reduced all this to a set of striking charts. They've tracked nations on all sorts of indicators of social decency, ranging from literacy to infant mortality, to homicides, to incarceration, to trust, to obesity, to mental health, to social mobility. And what they find when you put all these indicators together in the bottom left hand of that chart, you see Japan and Sweden and Norway, three of the most equal countries in the world. Those three countries perform the best on all these indicators. On the top of the chart, USA, Portugal, and the UK, three of the most unequal developed countries in the world, they all perform the worst on these indicators. So what can we do to become more equal? Well, I think step one is we need to recognize we can become more equal. And we know that because we did become more equal. Let's look at the income of America's top tenth of 1% as a multiple of bottom 90% income over the last century. And what you see is that at the beginning or early in the 20th century, that top one tenth of 1% had almost 900 times more income than the bottom 90%. But by the middle of the 20th century, that had been cut to less than 200 times. We became spectacularly more equal. Unfortunately, then we became spectacularly more unequal to almost a thousand times gap. The second step I think we need to take is to understand how we became more equal. That middle of the 20th century decline in inequality came from two main factors. The first factor, unions leveled up people at the bottom of American society. If we look at union members as a percent of the employed, that quadrupled in the middle of the 20th century. The second factor, high taxes leveled down the top. If we look at the top federal income tax rate in the early 1920s, that stood at 25%. It went all the way up to over 90%. Behind these two factors, behind the growing inequality of mid-20th century America, there was a broad progressive consensus. And that broad progressive consensus held that to create a decent society, we had to take two steps. We had to address the absence of wealth at society's base. And we had to address the concentration of wealth at society's summit. In other words, we had to level up incomes at the bottom, level down incomes at the top. Supreme Court Justice Louis Brandeis put this matter memorably. We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can't have both. Struggles brought this consensus to life. One example, in 1946, one of every 10 workers in America hit the bricks at some point during 1946. Here's a scene from the national coal miner strike and a scene from Forsyth County in North Carolina. But the Cold War busted this progressive consensus about the need to both level up and level down. In the hysteria of the McCarthy period, which makes for great movie posters, amid this hysteria, anyone who talks about limiting wealth concentration suddenly sounds dangerously subversive. So our political leaders don't talk about wealth concentration anymore. And a new elite political consensus emerges. And that consensus says, let's stop fighting over how we divide the economic pie. Let's just grow the pie so everyone gets a bigger piece. Let's not talk about the distribution of wealth. Let's only talk about the creation of wealth. Only economic growth matters, nothing else. Growth became the amazing everybody wins solution. To spur growth, President Kennedy asked Congress in 1963 to cut the top tax rate from 91 to 65%. And Congress obliged after the assassination and sliced the top rate to 70%. As they say in my own Cape Cod, a rising tide, Kennedy told America, lifts all the boats. Ronald Reagan then takes the logical next step. If cutting taxes at the top a little bit will grow the economy. As JFK claimed, why not cut taxes at the top a lot? By 1986, Congress will have the top bracket federal income tax rate down to 28%. And so we have in America that no longer levels down the top. And that tax rate since Reagan's time has bounced around and now sits the top tax rate at 37%. Unions, meanwhile, no longer have the capacity to lift up folks at the bottom. The union coverage rate in the United States has fallen sincerely, 1990s by half. And actually, this is not the most up to date, it's even worse than this. So how can we get back on the road to greater equality? Well, I think we need to recreate the institutional base for greater equality that we saw in the middle of the 20th century. We need a tax system progressive enough to level down the rich. We need a labor movement strong enough to level up the poor. But we also need to recognize that in the middle of the 20th century, these two pillars of greater equality in the United States could not be sustained. We need to go beyond the prescription for greater equality that we saw in the middle of the 20th century. And one key step toward going beyond, we already recognize that decency demands a floor under earnings, a minimum wage, social decency. I think we need to recognize also demands a ceiling, a maximum wage. And off the wall notion, this maximum wage is ceiling, not to FDR. In 1942, President Franklin Roosevelt asked the U.S. Congress to place a 100% tax on all income over $25,000. $25,000 back then equals about $375,000 today. Congress didn't go along with that 100% tax, but Congress did create a top rate of 94% on income over $200,000. Now FDR's push for a cap didn't just come from inside his head, it had deep roots in American political life. During World War I, Amos Pinchot, who was a former lieutenant of President Teddy Roosevelt and the brother of the future governor of Pennsylvania, he led a national campaign, a national grassroots campaign to set 100% tax on income over $100,000. Among the supporters, the active supporters of this campaign was Sidney Hillman, the president of the Clothing Workers Union, the most innovative young labor leader in the United States, and later FDR's top labor confidant. Other supporters included Jane Adams, the mother of the profession of social work in the United States and a leading voice for women's suffrage. And the supporters also included E.W. Scripps, the founder of the nation's first major daily newspaper, Jane. By war's end, in the face of the grassroots pressure, Congress lifted the top tax rate from 15% to 77%. But could a maximum wage ever become politically possible in our age? Well, I think there are some interesting positive signs along this way. One of those signs, more Americans, says Gallup, are questioning the conventional narrative that the rich have redeeming social value. Last month, Gallup asked, across section of the American people, do you think the United States benefits from having a class of rich people? Among Republicans in the same question was asked six years ago. Six years ago, 80% of Republicans said, sure, we benefit from a class of rich people, 59% of independents, and over a majority of Democrats, 52%. Last month, when Gallup asked this question again, Republicans actually slightly greater support for the idea that the rich have redeeming social value. But independents fell a little bit, and Democrats fell even more. So right now, right now at this moment, we have a majority of Democrats in this country who believe, essentially, that the rich have no redeeming social value for our society. I think that's a positive sign. The second pivotal change. The Dodd-Frank Act, the President Obama signed into law in 2010, includes a provision that requires corporations to annually disclose their ratio between their CEO and median worker pay. Corporate America spent five years after Obama signed that law trying to get that provision repealed, and Corporate America failed because labor and public interest groups pushed back. The first pay ratio disclosures began appearing earlier this year. And so I'd like to say that a new pay ratio era has now begun, and we're seeing this in headlines. We've been seeing this in headlines all this spring. Walmart's CEO earns almost 1200 times as much as the company's typical worker. T-Mobile has a high ratio, CEO pay millions at the top, massive pay gap, Philly's situation, from Texas CEO pay towers over median salary of workers. These are the headlines we're seeing. Now, for Corporate America, Corporate America essentially sees this new era of pay ratios as the end of civilization, as we know it. Their rhetoric has been over the top against this. So, since they raised the subject of civilization, let's talk civilization. What defines a civilized society? Well, one word defines a civilized society. Limits. Civilized society set limits to protect and advance the common good. We set limits everywhere. We limit how fast our motorists can drive. We limit how many ducks our hunters can shoot. We limit how much noise our neighbors can make. We set limits on just about everything except income. We have no limit on how much an individual in America can grab. And what's the inevitable result of that? Outrageously large rewards give individuals an incentive to behave outrageously, to do whatever necessary, no matter how socially destructive, to hit the jackpot. So, what do we get when we have no limits on how much our powerful can grab? We get this. We get this. We get this. We get this. We get this. We get this. We get this. We get this. And we get so much more. Open the Wall Street Journal any day of the week and you'll see more stories along this line. That's what happens when we have no limits. But what should a limit be? What could a limit be? What would an appropriate limit today be? Well, as we noticed before, FDR set his limit at $25,000, almost $400,000. He didn't get that. He got, as we said, his 94% top rate over $200,000. But that high, tough tax rate that FDR put in place could not sustain itself. There was a political dynamic that doomed it. And what was that political dynamic? Well, let's start from a real instance. In 1950, Charles Wilson ran General Motors, the most powerful corporation in the world. His 1950 income was $586,000. He paid $430,000 of that in taxes. America's wealthy considered tax bills like that a personal affront. The problem that created for progressives, the rich could see a direct personal benefit from a lower top tax rate. But Americans of modest means only derived indirect benefits from keeping top rates high. And this political reality gave the debate over top tax rates a basic asymmetry. The rich wanted top rates slashed much more intensely than average Americans wanted top rates to stay high. And so the rich throughout the mid 20th century would battle ferociously for a lower top rate until they finally prevailed. So what's the lesson that today's income cappers have taken to heart? It's this. We need to focus the cap on the gap, not a specific income figure. And this is a scene from that Swiss campaign in 2013, where maximum wage supporters urged a one to 12 ratio between top and bottom. Why cap the gap? If we link pay at the top to pay at the bottom, the income of our richest would only rise if the income of our poorest rose first. If we cap the gap, our richest would have a vested personal interest in helping our poorest, and those poor would have a vested personal interest in keeping that link in place. If we cap the gap, we would sow the seeds for a new economy that privileges social solidarity over exploitation. Dodd-Frank's pay ratio disclosure mandate to me amounts to a first step to a gap capped America. With publicly disclosed executive work of pay ratio figures in place, we can begin leveraging the power of the public purse against inequality. We can struggle to place consequences on excessive CEO pay. We can fight to levy higher taxes on companies that compensate their executives at over 25 or 50 or 100 times what their workers make. The current corporate average is over 370 times. We can fight to direct government subsidies only to businesses that keep executive worker pay gaps reasonable. We can fight to deny government contracts to companies with executive pay that exceeds a modest multiple of worker pay. And these struggles, struggles along these lines have actually already begun. In California in 2014, Senator Laurie Hancock was one of the sponsors of legislation to tax corporations with wide ratios at a higher rate. Senator Kathy Kuhl-Rumsie in 2014 was a sponsor of legislation that would give preferential treatment in government contract procurement to companies with modest pay ratios. The California measure actually won a Senate majority, but it needed two-thirds to pass. In Rhode Island, that measure actually passed the state senate, but never got through the house. The new pay ratio politics now even has a landmark victory. In Portland, Oregon starting this year, the city is now taxing corporations with CEOs making more than 100 and 250 times their median worker pay at a higher rate in corporations with more modest ratios. So if these campaigns succeed, can they make any difference? Can they really impact our overall level of income inequality? They certainly can because corporate and banking execs dominate our top one-tenth of one percent. Corporate executives make up 40 percent. Financial industry executives make up another sizable piece. And all the other categories make up a very tiny piece of that. By privileging enterprises with narrow pay gaps over enterprises with wide pay gaps, which is what would happen if we went down this road, we would clearly decelerate a major driver of our contemporary inequality. In the process, we would clearly accelerate the growth of employee-owned, cooperative, and other enterprises that feature narrow gaps between executive and worker compensation. And in this environment, almost every social situation could become an arena for egalitarian struggle. Students could join with university faculty to demand a modest multiple between top administrator salaries and campus worker pay as happened at St. Mary's College in Maryland. Donors to nonprofits could insist that the organizations they contribute to limit their top pay to a similar multiple. Workers could take pay ratio demands to the bargaining table. Consumers can wage boycotts against firms with wide ratios. So the path, the politically plausible path to an income maximum starts here. Every pay ratio victory one, no matter how small, could help people understand that the level of inequality that surrounds us has been and always will be a human construct. No force of nature leaves us some of us enormously richer than others. We can't choose to be more equal. To be more equal. Struggles around pay ratios can help make these choices plain. So let me stop here and just say a quick word about resources for online updates about all things inequality related. Urge folks to head to inequality.org. For more historical background on what we talked about, I did a book a few years ago, The Rich Don't Always Win, that covers this ground. And for new reading for the Struggles Ahead, we have this new book. So let me stop here and turn it over to Sarah. I was asked just to say a little bit more about we're really trying to get assuring that tax periods are not ratio and gender inequality. Okay, the Portland, Oregon situation was really the first success in this pay ratio politics battle. So in December, 2016, the city council there passed the world's first tax penalty on companies that have gaps between CEO and median worker pay of more than 100 to one. And this will now apply to about 500 companies that do business in Portland, and they include a lot of the big ones like Wells Fargo and Walmart. And the vote there was really fascinating. And it says a lot about the coalition building potential around this because they have a five member council and they just needed three votes and they only got three votes. And each of those three people voted for it for a slightly different reason. The champion of the bill, Steve Novick, had read the Thomas Piketty book and was just outraged about inequality and, you know, darn it, he was going to do something. And this was this idea. And then another woman who voted for it had an idea for a new homeless prevention initiative in Portland and she needed revenue for that. So she raised that argument. And then the third person voted for it because he thinks it'll be good for business that the extreme gaps we now have contribute to problems with employee morale and boost turnover. And there's a lot of academic research for that. But he actually came to that idea through his own personal experience. He'd worked at a very large cooperatively owned engineering company, which had very narrow pay gaps. And he saw that that really brought out the best in his colleagues. So it really speaks to the fact that we can bring high road business and institutional investors to the table on this as well as people who are interested in this because it does incentivize companies to narrow the gaps both by bringing up the bottom and bringing down the top and people who are seeking revenue for good things. So we were hoping in the wake of the Portland vote, which was December 2016, that this idea of tax penalties for extreme pay gaps was just going to take off like wildfire. And instead we spent a lot of 2017 battling to protect the federal disclosure rule from being repealed or gutted or blocked by Republicans in Congress. The SEC treasury, they just all went after it. The corporations were screaming. You know, like Sam said, the end of civilization was going to happen. And by some miracle, a rather small group of folks helped mobilize pressure on the SEC through institutional investors and ordinary Americans and managed to protect it. So now the numbers are out. As Sam pointed out, they're just totally obscene. The highest one so far is Mattel, which makes Barbie dolls. They have a CEO to work or pay a gap of about 5000 to one. So things have really gotten off track. And I wanted him to put this page up because right here you can get to a resource page, which will have legislation that has been introduced now similar to the Portland tax in a half a dozen other states. It's California, Massachusetts, Connecticut, Rhode Island, Minnesota and Illinois. I'll have bills. Rhode Island also has a bill that would give preferential treatment in state contracting to companies that have narrow gaps. And we're hoping that now is the moment for this to really take off. And if you would like to get involved, just let us know. That all right. Yeah. Well, thank you so much, Sarah and Sam, for those excellent presentations. And Sarah, thank you for teeing up sort of the practical piece, which is about how do coalitions form? How does change happen? What are the next steps for us? And I think it's great to know that there's been this, the progress in Portland. So I was going to ask you one question before we open it up to everybody else. And also to mention one more resource, which is that EPI has our own inequality website, which is inequality.is. And there's a lot of information up there, too. And we have also in our state of working America data websites, pretty much every data point you ever wanted on wage trends broken down demographically and by education in all different ways. So that's a great resource for everybody, whether a researcher or just somebody who wants more information. But so my question, this is just tossing it up in the air, a lot of the received wisdom about inequality is that we have a choice, you know, you either choose faster economic growth or better distribution, but you can't have both of those things. And Sam, you talked at one point about sort of the list of things that inequality is bad for. What about growth? Is that a choice we have to make or not? As you know, the consensus among economists used to be that if we chose equality, we were making that choice at the expense of economic development and our economy would not be more productive. We would not be creating more wealth. So that if we wanted to create more wealth, if we wanted to develop economically, we had to accept inequality. In the last quarter of the 20th century, this was by far the consensus among economists. But what's happened since then has been very interesting. If you look at all the international global economic institutions, the World Bank, the International Monetary Fund, the OECD, the Official Economic Research Agency of the developed world, each of those bodies has now come out with reports and studies that say that this is a false choice, that indeed greater equality fosters economic development. It doesn't tie it down. Now, unfortunately, the policies of many of these global economic institutions don't follow on that research finding that their researchers and scholars have put forward. Yeah, and I think that's really important because I think a lot of people are stuck in that old conventional wisdom. And so it's important to remind people that that isn't a choice, that in fact, we have a less healthy, less vibrant, less rapidly growing economy because of the tremendous inequality that we have chosen, as Sam said. Well, let's open it up to your questions and comments. And if you could sort of identify yourself and if you have an organization, tell us what the organization is and everybody be concise so we can get a lot of folks in and we'll take a couple at a time. I'll start up here. I just want to say that even though I'm very, very old, this is the most useful talk I've ever been at. So thank you very much. Oh, thank you. Thank you. I wrote down a whole bunch of questions, but I'll just limit myself to two now. One of them is how do you deal with wealth rather than income? Because a lot of people are sitting on gigantic fortunes. They're not CEOs getting 5,000 times more than their workers, but they have many of us distorting the society. And the second question I have is how do you express our struggle in a soundbite so that it can really carry quickly? Okay. On that soundbite, I like the expression cap the gap, but we need to develop that soundbite in the struggles ahead. On the question of wealth, your point is extremely well taken. If we clamp down on income inequality right now, we would still have incredible legacy wealth inequality. But in the book, The Case for a Maximum Wage, I talk about this point a lot. And actually, if you think about it, if your income is capped, then your assets can become albatrosses. So if you're a typical billionaire and you have a dozen residential properties around the world that you jet between, as many of our billionaires do, if you have a $100 million yacht, just the insurance for these assets, the upkeep for these assets, maintaining a crew for your yacht, if your income is capped, you have to dig into your wealth to keep these assets up. So what are wealthy people going to do? Well, some will choose to pay for those assets, the upkeep over those assets out of their wealth. Others will try to sell those assets, but if many people try to sell those assets, the value of those assets will go down, reducing the wealth of all extremely wealthy people. So income and wealth are very closely related. If we go for an income cap, we'd also be indirectly attacking wealth inequality as well. And it's also not to say that other measures are not necessarily. Sarah and I have several colleagues who are working on the estate tax issue. It becomes very important to have a strong estate tax, even if we do have a maximum wage in effect. And our colleagues are working a lot at the state level to have state-to-state taxes since the federal one was just weakened quite a bit. Thank you again for your talk and the guidance. And I obviously support the cap-to-cap measure. I just wanted to understand with the cap-to-cap measure, is that only tasting? I thank you again. My name is Karthik. I'm in between rules. In terms of the cap-to-cap measure, does that take into account just salary or does it take into account other measures of income? Just because, as you know, for the wealthy, a lot of their income is from other sources, going to stock compensation, capital gains, and a host of other sort of income measures that oftentimes exceed their salary or their wage. Well, I see a two-step process. The first step is to look at the major engine of inequality in United States today, and that's the modern American corporation and to put essentially caps in place within corporate pay structures through the consequences we can place on government contracts and subsidies and tax rates. And that only affects the income that CEOs make from the corporation. I think eventually we need to recognize that there's also income coming in from hedge fund operators and private equity funds and all sorts of other things. And the only way we get at that is through the income tax. And so what I would like to see is a top income tax rate of 100% tied to the minimum wage. So if you make all income over 50 or 100 or 10 times, the minimum wage would be subject to a 100% tax. So it's two steps, two separate things we're talking about. One thing just to clarify, because people ask me a lot, when companies report their CEO to worker pay ratio, on the CEO end, it is all forms of compensation they're getting from the company. So it includes the stock options and the restricted stock and not just the cash salary. Hello, hello. Nico Luciani at the Center for Economic and Social Rights. Thanks so much for the talk. I think this idea makes a lot of political sense. It makes a lot of moral sense. But as you've mentioned, there's a business case and a strong economic case for it. At most, an FDR's mind, of course, was maybe a third economic case you didn't quite mention, which was to limit financial instability. When you take out the top concentration, concentration wealth at the top, it really limits that financial instability as the IMF have shown. So my question was going on to others. I mean, how do you avoid the unintended consequence where if I was a CEO, I'd just say pay me in stocks, build my assets, rather than you can cap my income all you want, but I'll just build my assets, maybe ship them overseas to yachts I can have in Switzerland or other places. So how do we make sure that the executives just don't shift their remuneration from income to wealth? Well, in terms of the remuneration they receive from corporations, there are all sorts of legal standards now from the SEC on what they have to report. So I think we're in good shape there. Will executives try to pursue loopholes? Of course they will. And that's what we saw also in the middle of the 20th century. Top income earners tried to develop loopholes to the tax rates. One industry was particularly effective, the oil industry, because the oil industry had a special political power. They had House Speaker Sam Rayburn, they had Senate majority leader Lyndon Johnson protecting them. So if you look at the first list of billionaires that appeared in 1982, over half the people on it were oil industry executives. So there will be battles over loopholes. But actually in the middle of the 20th century, the people won most of those battles. Justin, I used to do tax policy, but now I work in marijuana policy. It's funner. My question is how do you address the concerns about that that are never really going to be raised with the what aboutisms for having it be a gap company by company? I used to work on carried interest tax loopholes and my thought is hedge funds and PEs don't have large staff. They can have a one to two ratio and be living very comfortably. So what would you say about the bureaucratic and regulatory nightmare that would be set up for that? And then secondly, when, you know, have you considered just having it be a straight correlation between median income and then the top marginal rate of 100 percent? So, you know, 100 to 1 and everything above that is 100 percent. I think we're going to have the same bureaucratic administrative nightmares with the notion of a maximum wage as we've had with the notion of a minimum wage. The minimum wage is incredibly complex, incredibly written with loopholes and DC voters last week tried to fix one of those loopholes for restaurant workers here in the District of Columbia. So we're going to have those same sorts of problems with the maximum wage and I don't have the answers to all of those, but we've had a minimum wage in this country since 1938 and we still haven't gotten it completely straight. But that's no reason to not move forward with a minimum wage and I view the maximum wage idea in the same thing. There will be problems, there will be hiccups, there will be struggles that will have to wage to make this fair and uniform and consistent across the economy. Okay, let's take a couple because I still see a lot of hands up right here in the front row. Thank you Larry checker, checker communication, thanks for that. This whole notion of income inequality I think should be personalized a bit more so that even people who are making a decent wage understand the impact on their incomes. For example, in 2006 Fortune Magazine came up with a story that said that the Walmart family you know would tell their employees if you can't make it on our wages here are some government programs that you can apply for and as a result California in that year paid 58 million dollars in food stamps and other social programs. The Walmart people, so what is that doing? It's underwriting the wealth of a family that's got about 60 billion dollars. Nobody understands that, nobody, we have to message this better. People who even are making you know good income 50, 60, 70, 100,000 dollars a year are still being taxed to pay for the benefit of the wealth. You've got to get that message out. I'm sorry it's not a question, it's a comment and I blog about this stuff so you know. Thank you. Okay, we're going to take a couple more. How about on the aisle right here? Hello, hi my name is Christine. I study international relations at the London School of Economics so I'm surrounded by a lot of those prospective CEOs. I live in Copenhagen, Denmark which is I believe one of the most equal countries in the world and has the highest tax I believe of any country which is just under 50% for our top earners. The reason that we're able to have such an equal society is because we're only around 7 million people in the country and we're all racially very homogenous and we struggle quite a lot now that we're facing immigration challenges and things like that and that's really making it difficult to continue on our universal healthcare and things like this. So how do you combat that in a country like the USA that is so racially diverse which is a benefit in so many ways but really kind of undermines that trust that exists in a lot of smaller universal healthcare countries? Why don't you take those two questions? Okay, well that is true that if you look at Norway and Denmark and some of the Scandinavian countries they are ethnically more homogenous but I think it's also important that that homogeneity did not prevent inequality. So if we looked at Norway for instance a century ago, Norway was incredibly poor and unequal even though Norway at that time was incredibly homogenous as it is today. Norway for decades hemorrhaged migrants to other nations in the world but Norway became much more equal. It was not a fact of nature or a fact of demographics that made Norway become more equal. So if an unequal homogenous nation can become more equal through the political choices it chooses to make that gives me hope that a multi-ethnic society like the United States can become more equal and indeed the only way I think we can really overcome our ethnic divisions is through a common struggle to become more equal. Topeka Rathod, we talk about inequality and one of the biggest things that I don't hear about is the inequality in terms of compensation, remuneration between men and women and certainly within the US where you've got you know Latinos earning half of what a white male would earn and you don't you don't also have the Equal Rights Amendment in the Constitution. That would alleviate quite a lot of the inequality and also support and underpin the economic growth. I don't know what your thoughts are about. Well we have an expert with this on justice issues. Deep into these numbers because we have a fact section at the top of the website and we're adding one on gender inequality and we're about to launch that so I've been going over all the data from around the world and one thing that is exciting is to see reforms like in the UK where companies are now having to report their gender pay gaps so we're a little bit ahead of them on the CEO worker pay gaps. They're ahead of us on the male to female pay ratios within those companies and it's been quite shocking to see some of the figures coming out. I think it was Goldman Sachs men make 55 percent more than than women at that bank among their UK employees so that's a direction we want to take the the pay gap debate in this country to it to have better reporting but I think the the general summary of this new section we're putting out is looking at both how women are so underrepresented at the top and we looked at CEOs among the Fortune 500 and it's it's still just a handful for all the the talk of breaking the the glass ceiling and then they're so overrepresented at the bottom level the figures on the percentage of minimum wage earners that are women and is really stunning too so you're right that should be getting a lot more attention. Yeah I mean just if you look at any of the the graphs that Sam put up in terms of inequality and you add a race and a gender lens to it all of a sudden you'd need a much bigger screen to be able to show the level of inequality so I think that I think should remind us that the challenges we face are not just between CEOs and workers but also between men and women and and within the racial gaps too. How about in the back there? And thank you so much for a great talk. I started the Center on Capital and Social Equity a few years ago and we come out and more it's called Inequality, Inc. INK.org promoting more inclusion in capitalism among all these other things. For example I have a paper up there proposing a universal 401k system so all workers would have capital gains. So that's the kind of some of the things my question is you talk about going through the you know the 30s when things were more equal in this country just seems to me the culture is where liberty is a lot and economic freedom has a lot more legs than equality. Equality is very has a very strong history. There has to be a very good reason practical reason to take down liberty and in that time there was the the financing of the New Deal in the in the World War II. Right now you have a place where you could work with the Social Security. It's aggressively financed very progressive in its benefits and it has to be refinanced at some point and one way to do it is to lift the cap so you have a very you have a way that you can make the taxation in a very practical sense if you brought home to millions of people more equal. I just wanted your thoughts on that. Thanks. I wanted to toss out there's a really interesting ballot initiative going forward in Maine so it'll be on the ballot in November that would lift the cap on Social Security contributions in order to pay for universal home care in that state and that that I think would be a really path breaking thing that people could try to model other places. Thank you for an interesting presentation. Last week I attended a presentation by Robert Kutner on his book on on the globalization contributing to this inequality and if I understood him correctly he mentioned that the wage gap was closing up after World War II up until President Nixon took the U.S. off the the standard rate for the exchange of the dollar the Bretton Woods agreement and ever since that decision the wage gap between workers and the higher income people have widened have you have you any thoughts about that theory of Robert Kutner as far as contributing to this inequality? Thank you. Well I think from the work I've done that there are two factors more than any others that explain the systematic increase in inequality we've seen since the late 1960s and those are one the the falling level of union power trade union power in our society and second the falling top rates of the income tax on the wealthy those unions and progressive taxes were the bulwarks of greater inequality in the middle of the 20th century we took those bulwarks away in the second half of the 20th century and I think there are a number of other factors that have contributed to inequality but I think those two institutional factors have been the most important. Okay up here in the front Mr. John Cabana. Thanks to all of you and thank you Theo also for co-sponsoring this this fantastic event. I have a question actually to all three of you because I think everyone here is fascinated by the politics of this and what could be the coalition to push us in this direction. You all EPI and IPS were deeply involved in the fight against the horrible tax bill last fall that made us more unequal and I'm curious as you watch that and watch the polling on it and watch the coalitions that came together to fight it if you got any new insights on who could come together and in particular I'm curious none of you mentioned in the potential allies people on the right who hate Wall Street who feel that Wall Street is out of control and I'm curious whether you think in in this populist moment that there are potentially other allies that maybe surfaced a little bit in that fight. Thanks John for that question and you know I think the tax bill first of all you know this battle is far from over because this November will be really the testing ground for whether the arguments that we've made about this tax bill which was really a travesty not just you know blowing a $1.5 trillion hole in the budget deficit but then you know as soon as that was done start talking about how they're going to make that up by cutting Social Security and Medicare and other things but I think in terms of the allies in part of it is going to be I think a real challenge around messaging because that's the I think there's going to be a lot of money put into the November election to try to convince us that the tax bill was about you know helping middle-class workers and not about helping the wealthy and Wall Street so I think you know all of us in this room have a lot of work to do between now and November which is to make sure that we can keep our eyes focused on the prize and telling the truth about what what the actual outcomes of that tax bill were because I do think that there are there are definitely allies with called the right or the Republican party or independence that that should be disenchanted with with where the economy's gone. I'll just make one quick point and that's to remind folks that Donald Trump when he ran in 2016 on numerous equation numerous occasions spoke out against excessive executive compensation so he clearly felt that a lot of his supporters resonated to that theme and I think that's true that the polling shows that the vast majority of Americans don't think don't understand how much CEOs make and when they find out are absolutely aghast. I've been doing my own personal poll on CEO pay for more than 20 years because I'm from a red rural area of Minnesota and when I go home and people ask me what I do for a living I always say I do research on CEO pay and without fail every single person says oh those overpaid CEOs I hate those guys go go get them you know and and the polling does bear this out this Stanford business school poll showed that a majority of Americans support a cap on CEO pay which is you know pretty pretty bold and it was 52% of Republicans and 66% of Democrats so across the political spectrum and when they asked people what they thought the ideal gap should be between CEO and worker pay they said if a company pays their employees on average 50,000 what do you think is the the appropriate gap and they said 18 to 1 so we are very far off track what ordinary Americans think the situation should be. So it seems like an obstacle here is that this would have rather that the target of this legislation would be the obscenely wealthy and as it happens the obscenely wealthy happen to have a stranglehold on tax policy so in order to make this argument effectively or in order to get it passed you would need to make this argument to the obscenely wealthy so imagine that I'm a libertarian billionaire can you make a concise piece of argument for why I should allow a capital gap legislation? Well I'm talking you know crude terms and you know some people have class interests that they're they're never going to to see but to me the most potent argument comes out of the work of Richard Wilkinson and Kate Pickett that I we highlighted before and that says that if you look at life expectancy data that if you live in a deeply unequal country even if you have resources your life will be shorter than the richest people who live in a much more equal society greater equality creates a healthier environment for everybody in it and to me that's always been a very powerful point. I love to read the reports that companies have to file with the SEC about executive compensation and in the footnotes you can see the kind of perks they get and a common one at least it used to be they're they're doing away with a lot of perks and just putting the money elsewhere but it was home security systems worth you know millions of dollars and I think part of the argument is is that really the the kind of world that you want to live in where basically you have to live in a in a fortress because the divisions between you and the rest of this country are so wide that you have to worry and spend millions of dollars to protect your stuff. Hi, excuse me, good afternoon my name is Cole Crawford and I'm from Public Citizen. Thank you so much again for your presentation I think it comes across as really timely and very innovative. The only question I have was what an policy would like this sort of run the risk of encouraging businesses to move their operations elsewhere or make them not want to incorporate their businesses in the United States in the first place? Well the flip reply to that is they already are I mean outsourcing is incredibly widespread phenomenon but I think what we need here is a worldwide movement and that's what we're seeing in the UK Jeremy Corbyn now is pushing for rules that would deny UK government contracts to any corporations that pay their topic sex over 20 times what their workers are receiving. Movements like that are going on beginning all over the world. India now has a pay ratio disclosure mandate in effect so I think the ultimate solution is a worldwide movement but the scare tactics that businesses are talking about in terms of flight that's already happening in the United States. Well listen thank you all for coming today and thank you for your excellent questions and please join me in thanking Sam and Sarah for their people. Check out all those websites and and if you want to