Why Do High-Skilled Workers Get Paid Too Much?

In an article published in The Washington Post, Roberto A. Ferdman states that a study by Harvard Business School found that CEOs make over 350 times the amount of an average worker (Ferdman). That is more than twice the amount of Switzerland, the country with the second largest CEO-to-worker pay gap, coming in at 148 to 1 (Ferdman). “What Americans share with the rest of the world is a collective disdain for pay inequality” says Ferdman, “People of all ages, education levels, and income brackets, the study found, believe that low-skilled workers are getting paid too little and high-skilled workers are getting paid too much” (Ferdman). The CEO of Discovery Communications makes 1,951 times what median workers do (Huhman). Ron Johnson, the
The paper states that "Pay has grown much beyond the increase that could be explained by changes in firm size, performance, and industry classification," (Thompson). Bull markets, which are financial markets where prices are raising, don't just encourage more equity-based compensation for CEOs; they also make shareholders less likely to protest when executives pay packages are many hundreds of times more than their average workers (Thompson). “In other words, bull markets make CEOs fabulously wealthy, and they make shareholders indifferent to their fabulous wealth”
An article from the Society for Industrial and Organizational Psychology documents a SIOP conference panel discussion . SIOP member, Brian O’Leary asks “Why are CEOs being rewarded at a level that doesn’t seem to be commensurate to their contributions to the organization, especially in cases where they are running failing organizations?”. Edwin Locke, the Dean’s professor of Leadership and Business at the University of Maryland argues that “Some people think there is an intrinsic amount of pay that is correct for a job. The problem is, there’s no such thing” (Schings). He goes on to say “I would not say executives with high pay are overpaid just because they are paid