The policy deductible maximum wage gap and the case of Ecuador
Keywords:
executives-workers wage gap, wage policy, maximun salaries, income distributionAbstract
Wage gaps between executives and workers have tended to widen since the start of neoliberal globalization in the 70s. This growing gap helps explain the collapse of labor participation in the primary distribution of income and the growth of inequality worldwide. In this paper we try to contribute to the ongoing debate in Ecuador where it has enacted a law that aims to stimulate innovative responsible wage policy by setting a limit on the deductible wage gap of income tax. A measuring methodology is proposed to analyze pay practices, sector and size di erences. The work concludes with recommendations about several aspects of the law and its regulation.
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