An LNAT practice essay that was written in response to the prompt: "Should the salaries of business executives be capped? Why or why not?" The writer of this essay received offers to study law from the University College of London, King's College, Durham University, the University of Exeter, and wa...
Should the salaries of business executives be
capped? Why/why not?
There are two primary reasons why the salaries of business executives should
be capped. The first revolves around ethics: allowing specific individuals
unlimited salaries while others are given minimum wages exacerbates wealth
gaps and affords executives disproportionate monetary power. The second is
societal: uncapped salaries may encourage greed and excessive competition,
with employees encouraged to chase pay rises at the expense of their
wellbeing. In this essay, I will counter these claims and explain why the salaries
of business executives should not be capped.
I will begin with the first counter point: uncapped salaries allow specific
workers to gain disproportionate quantities of money at the expense of other,
less well-paid individuals. Under current laws, certain entrepreneaurs, such as
Elon Musk, are allowed to attain billions of dollars for their work. This does not
seem fair considering that others—waiters and cleaners—are only afforded
minimum wages. Allowing such an imbalance could perpetuate wealth
inequality, with business executives given excessive power over other, lower-
paid groups. Although the UK government has imposed various taxation
regulations in an attempt to reduce this inequality, it is clear that this has not
done enough, based on the fact that tech gians—such as Musk and Bill Gates—
are still able to earn such high amounts. In order to prevent this income
imbalance from worsening, it is essential that business executive salaries are
capped.
However, although it is true that unlimited business executive salaries can
worsen inequality, they can also be used as incentives to improve society.
Executive salaries can only be hiked if companies earn large quantites of profit.
In order to attain high salaries, employees must thus ensure their products are
as innovative, efficient, and profitable as possible. Elon Musk, for example,
would not have been able to become a billionare if he had not invented Tesla.
His development of Tesla has allowed consumers to drive cars using cleaner
forms of electric energy: an undoubtedly benefifical solution to pollution and
climate change. This illustration proves that salaries can be used to encourage
technical development and address global issues, improving the welfare of all.
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