Salary Cap

If you haven't heard, executives whose companies took money from the financial bailout plan are having their salary capped at $500,000. Undoubtedly anyone reading this blog would be more likely to see this type of money from winning the lottery than from actually working (which basically means that it's not going to happen).

But how likely is it that some of us will be making $50,000 within the next decade? A recent article in the New York Times suggested that a six figure income in New York was only worth about $50,000 in Houston.

http://www.nytimes.com/2009/02/08/fashion/08halfmill.html?em

Let me first clarify by saying that I still believe $500,000 (or a mere $250,000 here in TX) is plenty of money to live on, even for a top executive. Just because you are at the top of a company that just had to be given a few billion dollars, does not mean that you should forget where Walmart is located. On the other side of that, just because you can pay the minimum payment on a loan does not mean that the minimum payment will even cover the interest you incur.

The article suggests that the executives need to keep up appearances similar that of their peers, and this is understandable. It is vary naive to suggest that anyone would regularly associate with someone who has significant differences, and financial restrictions can create these differences. Even so, something tells me that these are not the people that clip coupons, these people buy fitted suits, these people live in houses that cost more than I will make in a lifetime. I have little sympathy for someone making $500,000, but I would not be happy either if my income just became 1/6th of what it was.