Maximum wage

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A maximum wage, like a minimum wage, is a government control on earning. It sets a cap on the amount of income that a person can take in. This is seen as a method for redistributing capital from the wealthy to the poor. Some left-leaning economists propose that a maximum wage would allow government control of inflation. Most economists doubt the utility of such a measure, pointing instead to the existing government control over the supply of money. Economist Milton Friedman has pointed out that a maximum wage would discourage innovation, as no amount of additional innovation could increase one's wealth. Sweden briefly imposed a maximum wage in the 1960s, but repealed it in the face of public criticism.

Like any price ceiling a maximum wage would lower employment levels for those who would otherwise earn more than the maximum wage, creating a shortage of high skilled labour.

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