Edwin Del Bosque
Alec Tsoucatos
EC 330: Principles of Microeconomics
14 April 2016
US Managers Are Overpriced
This chapter talks about what they tell the people about how especially in the United States, top managers get paid obscene amounts of money. It works this way because of what the market forces demand in the country. Talent is not very usual to find and therefore, companies need to give significant sums of money to whoever can do the adequate job of management. CEOs today are paid around ten times more than their predecessors of the 1960's, even though the managers back then actually ran successful companies, whereas today, companies struggle too much in today's market.
Also, managers in the United States are not only over-priced but over-protected. In a sense that they do not get punished for poor performance. Pretty much the manager class in the country have become such a high political, economic and ideological source of power, which it has been able to manipulate the forces that determine the national wage for managers. It does not matter the economy of a country how much money they get, countries where the national wage is lower or even higher than the United States, still managers earn much more than managers of other nations. Finally, the job of a manager is HIGHLY competitive in the US and those who get to be CEOs of big corporations tend to be very skilled, prepared and pro-active in that job. Being in one of the largest countries in the world, the task of a CEO is not easy, and there's an enormous responsibility behind it.
Analysis
The thing about this topic is that free-market economists argue that there be no problem in the crazy amount of money CEOs get. The economists say "The payment of the CEOs is ten times more than the average worker, they say, it must be because they add 300 times more value to the company." To some degree it is