It is well known today that there is a great disparity between rich and poor, as well as top executive pay vs. the average worker’s pay. Studies show that only 10 percent of Americans own 90% of the nation’s wealth. Research has also shown that in 2005 the average CEO earned 262 times that of the average worker1. Most Americans see this growing disparity as a problem, and many possible solutions have been debated, such as tax cuts (for the first problem) and regulating CEO/executive pay (for the second problem). I would like to propose my own solution, which is to prove that the disparity is no problem at all. The game of chess will be used as an analogy.
We will start with the pieces of a chess game. The King represents the CEO; the major pieces (Queen and Rooks) represent upper management; the minor pieces (Knights and Bishops) represent lower/middle management, and the pawns represent the average worker. Early in the game when the battle is about to begin, the king, like any good leader, is usually moved to safety (castling), moving to the corner of the board and bringing a rook out to be active in the battle. This is a great example of delegation, since the king knows he is useless and weak in this part of the battle. He instead sends out one stronger than he to do the dirty work while he keeps safe. This smart move is one reason why the king is so high paid, an exemplary of the “work smart, not hard” philosophy. The pawn, however, is told that with hard work he can obtain the lofty goal of reaching the end of the board and gaining a high level promotion. We know that in most chess games, usually one pawn gets the chance to actually promote, and even though there may be chances to promote other pawns, it is useless to do so because the kings army would be sufficient enough to win the game with just the one promotion. However, the prospect of this great promotion keeps the pawns motivated and their hard front line work proves very important in the course of the game. Does this importance require a pay raise for the pawn? Does this mean that there should be less of a gap between the pay of the pawn, and the pay of the king? Does is mean that the king’s pay should be reduced since he does not participate much in the first two phases of the game (opening and middlegame)? Absolutely not! The king’s strategy is totally sound. The king’s capture means the end of the game, the downfall of the company, the decrease in stock value! The low pay and low value placed on the pawns keeps the company in a strong position and allows for strategic moves that place it in better positions, such as a gambit, where a pawn is sacrificed in order to gain better development and position. It is much riskier to sacrifice a minor or major piece for this effect, but the pawn is perfect, a small sacrifice! Not only is it good for the company, but the pawn isn’t affected much by it anyway. He was being paid a much lower salary, but average for a pawn. He will very easily find a job as a pawn for another company since his pay was kept low, and keeping him at this pay won’t be difficult for another company. He also won’t feel as bad from be ousted from his former company because of his low pay. The pawn will be happy because he will once again gain that opportunity to reach the end of the board for another company and gain that lofty promotion.
The king’s pay is truly justified when the endgame is reached. This is when most of the pieces and pawns are off of the board. The king’s hidden power can now be shown as he steps to the middle of the board to help with either checkmating the other king or to help promote one of his pawns. Yes, the great king will now guide and mentor this special pawn to gain that awesome promotion. A sign of a great leader! Now the game can be won, and this benefits all those left on the board, and most of all the player whose hand was making the moves, representing the investors and stakeholders. The investors and the economy benefit from this strategic play. Now what if there were less disparity between top executives and average workers? If CEO salary was decreased or regulated, or if average worker pay were increased? The game would be very difficult to win. First, who would want to be the king, always the target, the one who makes the decisions, if there weren’t a great difference in pay? Why take on that responsibility if he could be comfortable being a rook, or a knight, or even a pawn? Can you imagine if a pawn were to receive a comfortable salary? Why would he bother making the dangerous trek to the end of the board, just to gain a small promotion, not making much more than he is now, yet having more responsibility? The disparity is necessary in order to create wealth for the nation; therefore there is no problem with it. The fact that 90% of the wealth goes to 10% of the population indeed gives more reason for those pawns to joyfully march across the board.