And this is bollocks

Prevailing wisdom would say yes: pay is a reward that reflects merit.

Sigh.

Pay reflects scarcity. To do job x the skills a,b,c and d are necessary. If we\’ve more people with skills a, b, c and d available than we have jobs x which need them then pay will be low. If we have fewer then pay will be high.

2 comments on “And this is bollocks

  1. Or does pay reflect barriers to entry (in part)? Banks are owned by shareholders, but managed by managers. Managers won’t necessarily be concerned with maximising shareholder returns (how do you explain private jets?), so may hire those who they like (sometimes), and sit on the pay review boards of those who review their own pay. I might like to do this, but the barriers to entry of starting my own successful bank are dauntingly high.

  2. Yes, perhaps. But the problem lies somewhat with the necessary oversight not being exercised by the shareholders. “Managers” are acting in a predictable manner.

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