Argument: This will distribute wealth more evenly

As a result of having to pay important directors and employees a lower wage, businesses will be able to produce their goods and services for a lower cost, and sell therefore sell them for a lower price. This will lead to a more equitable distribution of wealth, as the poorest will become relatively richer, as prices will fall. This will also be true for small businesses, which will be able to obtain cheaper legal and financial advice and business consultancy, and are therefore more likely to succeed. Sports provide a good example of this. In major league baseball salaries for the players more than doubled in real terms between 1992 and 2002 while ticket prices rose 50%. As players wages take more than 50% of teams revenues a cap would mean a significant cut in costs that could be passed on to the consumer.1

1 Michael J. Haupert, "The Economic History of Major League Baseball", EH.net Encyclopedia, December 3rd 2007

Candidate 1: "The significant difficulty of moving country, such as leaving behind friends and family, and leaving behind an area (or even language) you know well, are likely to limit emigration. As for immigration, the skill set is typically already within the country; if not, this policy may encourage a focus on an educational system to ensure it is. Finally, if the argumentation about equality leading to a better and happier society is correct, this in itself will attract immigrants to high-paying jobs."
Candidate 2: "It is equally likely that money is a significant motivator in productivity, and that limiting wages will therefore harm productivity."
Candidate 3: "Under this policy, companies will not be able to spend their profits on inflating their salaries, and so are more likely to have a long-term outlook to the company. The best way to advance long-term interests is through research; it is possible that all their excess profit will be spent on this. While entrepreneurs may be driven by profit, the salary proposed is sufficiently high that it can be aspired to; most entrepreneurs will still be motivated by it, as they seldom already have a job that already pays so much."
Candidate 4: "Social tensions are greatly exaggerated, and only actually felt when a specific crisis and against a very specific figurehead (in the case of Fred Goodwin, an entirely isolated example, the large amounts of media coverage he received for his role in the banking crisis). Furthermore, feelings of inferiority are typically reasoned away by people, who explain other's greater income in terms of their willingness to work hard, or being lucky. The feeling of superiority over others can be considered a motivator that encourages some people to work (See Opposition Argument One below). Finally, Sweden may be disanalogous as an example as they (and other Scandinavian countries) have a strong collectivist spirit that may be lacking in other countries."
Candidate 5: "The effect of high salaries on levels of labor supply is likely to be marginal. People work in part due to the significant social pressure of having a job and advancing themselves comparatively against others. This motivation will still exist, as there will still be rewards to advancing your career; a salary closer to the salary cap, and the added responsibility and social (or business) standing such advancement provides. While there may be fewer people willing to work 18 hour days, 6 days a week, this work is being done because it is valuable – so the firm will need to employ more people to do it, and the work is spread over a larger number of people, possibly even increasing employment"
Candidate 6: "It is likely that foreign demand will displace national demand for properties, especially in key city areas (such as New York or London). Furthermore, having a nice house is one of the strongest incentives to have a job and be a productive tax-paying member of society; loss of this incentive may decrease a society's output level and tax revenue."
Candidate 7: "Some evasion of this is inevitable; figures show $2 trillion of unreported income in the US in 20081. Furthermore, international cooperation is unlikely, as each country has a strong incentive to renege on agreements to attract more talented people to their country.

1 E . Feige, "America's Underground Economy: Measuring the Size, Growth and Determinants of Income Tax Evasion in the U.S", January 2011"
Candidate 8: "This price-lowering effect is most likely to be felt in those industries where the majority of the costs are in wages; these industries are likely to be service based industries. Individuals, especially poorer individuals, rarely buy services, so the effect on the poorest is likely to be limited."
Candidate 9: "There is still significant social prestige to being a doctor that will motivate people to take up the role; the same will be true for other high-paid jobs where there is a lot of training, such as lawyers. This prestige is often a key part of the reason people do the job in the first place; many doctors are paid far less than people working in business or financial services at similar levels of seniority. Finally, the unpleasant jobs mentioned typically are done for a salary well below the cap proposed, and they still have adequate people."

This price-lowering effect is most likely to be felt in those industries where the majority of the costs are in wages; these industries are likely to be service based industries. Individuals, especially poorer individuals, rarely buy services, so the effect on the poorest is likely to be limited.
