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Killing the Maximum-Wage Myth

April 23, 2014
6731Julain Adorney writes in today's Mises Daily:
CEO turnover has reached its highest peak since 2009, which indicates two things. First, CEOs who do not fully grasp the rapid technological change their companies are living through are being let go. Being a CEO is not a secure job; you earn your keep or you find yourself on the street. Second, CEOs who do have a solid understanding of the challenges and opportunities of the evolving economy are in high demand; many may leave their current job for a better offer with a new company. If this sounds like the labor market for a lot of other workers, that’s because they’re very similar. The labor market for the top 1 percent is not fundamentally different from the labor market for other workers. Some employees, who are underqualified or who golf with the boss’s son or who simply perform less well than their hirer expected they would, may be overpaid. Others, who work harder than their coworkers and provide more value, are underpaid.[2] “The market is an ongoing discovery process,” Mr. Reed points out. “Information being imperfect, adjustments and movements take time.” That’s as true for highly paid employees as lower paid ones.

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