“What are you saying?” I said.
“This won’t be popular,” he said, “but could the wide difference in pay between the top and the bottom actually be based on differences in skills, experience, knowledge, work habits and so forth?
“Maybe top managers get paid for their knowledge, connections and skill in surviving under highly competitive conditions. They earn their rewards by knowing when it is best for the company to purchase new equipment, when to hire or lay off workers. They understand the best timing of a bankruptcy that saves some jobs, sacrifices others, and wipes out the investments made by shareholders and lenders. The game is survival, not responsibility for the interests of others.
“We talk about the knowledge economy, the need for workers to have skills, the value of experience and good work habits, but we don’t have the means of evaluating these characteristics. What we do have is a very poor tool called ‘labor productivity’ … a catch-all concept that has little meaning in our highly differentiated world.”
He paused. I told him, “Better eat up before the thought police catch you.”
Morton Marcus is an economist, writer, and speaker who may be reached at firstname.lastname@example.org.