Unless your plan terms provide otherwise, the salary (elective) deferral limit is applied uniformly to the compensation that the employee receives throughout the year. But, he points out, “there are others whose contributions are worth more than they are paid; they may be underappreciated by their boards.”1  Like other underappreciated employees, they may eventually leave for greener pastures. They are rarely used. Why should we pick an arbitrary number proposed 70 years ago and set it as the maximum wage? Julian Adorney is a Young Voices Advocate and senior SEO analyst for Colorado SEO Pros. There are several problems with this claim. His writing has appeared in a number of outlets, including The Federalist, Fox Nation, The Hill, and the Mises Institute. If this sounds like the labor market for a lot of other workers, that’s because they’re very similar. Compensation and contribution limits are subject to annual cost-of-living adjustments. Imposing a maximum wage targeted at CEOs would be a little like imposing a government-set wage for engineers; both ignore the adjustments of the market. First, wages haven’t stagnated; that claim rests on aggregate numbers and fails to account for several key factors, as explained here by economist Don Boudreaux. In their ideal, executive pay is universally too high and universally unearned, incentives are not connected to performance, and government agents can make wise and proper — and consequence-free — adjustments to the economy. I think most Americans would agree that no enterprise where workers would have to labor over … The Mises Daily articles are short and relevant and written from the perspective of an unfettered free market and Austrian economics. “What possible incentives,” he asks, “what possible body of necessary knowledge, do they (government bureaucrats) have to make the right decisions on the compensation of people in the private sector?” Congressmen, many of whom are career politicians, have their own (rather high) salaries set by law. Instead of making economies more vibrant and competitive, they freeze competition, encourage unproductive investments, and ignore the currently wealthy. Being a CEO is not a secure job; you earn your keep or you find yourself on the street. Some employees, who are underqualified or who golf with the boss’s son or who simply perform less well than their hirer expected they would, may be overpaid. Running a successful business is difficult for executives of businesses of all sizes, and for small business executives, failure can be personally devastating. Finally, if we adopt a maximum wage, who will set it? A maximum wage, also often called a wage ceiling, is a legal limit on how much income an individual can earn. (2) You can work as an employee at another law firm, work fewer hours, and have an almost-guaranteed salary of $200,000/yr (admittedly on the high end). Written for a broad audience of laymen and students, the Mises Daily features a wide variety of topics including everything from the history of the state, to international trade, to drug prohibition, and business cycles. In general, running a business (or any organization) is significantly harder than being an employee and involves longer hours and higher risk. Second, Maher ignores the disincentives to work caused by a low maximum wage. What is the Austrian School of Economics.