Labour market failure by calum unsworth https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87 Made with fortitude en-us 2022-02-07 12:36:42 UTC 2022-02-08 09:19:56 UTC hello@padlet.com Use economic concepts to explain the article... unsworthcalum https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2032938706 2022-02-07 12:39:04 UTC https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2032938706 Why CEO's are paid so much https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2032950716 The labour supply of CEO's is very inelastic because of the experience and knowledge needed to properly execute the role, leading to an increased wage rate. Additionally, the MRP of a CEO is incredibly high as they are in charge of very large strategic decisions, and because their MRP= Wage Rate, their salary would be a lot higher.

]]> 2022-02-07 12:46:48 UTC https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2032950716 Pay gap between CEO's and employees https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2035015151 The article highlights a large pay gap between the skilled workers at the top and the lower skilled workers at the bottom. Higher skilled workers have very high economic rent and low producer surplus compared to low skilled workers. This is because the marginal product revenue of labour for CEO's is higher than the average employee. However critics argue instead of changing the salaries of CEO's and employees to reduce the wage gap, it is better to increase automation or outsource more jobs. ]]> 2022-02-08 09:12:20 UTC https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2035015151 There is a much higher wage between the top executives and average workers because the labour supply for them is more inelastic then average workers, due to the difference in amount of experience they have and how much revenue they bring to stock holders. The economics rent is much higher for the bosses as they are getting paid more than they are willing to be paid, where as the economic rent for average workers are low, therefore making companies pay the top executives less will even out the economic rent. https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2035020052 2022-02-08 09:15:10 UTC https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2035020052 How big is the pay gap? article https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2035025224 By implementing the regulation that a company must publish the pay ratio between bosses and workers, it firstly reduces the information failure as employees and the public are made aware of the pay disparity between executives and their employees. This can lead to public and internal pressure to either reduce CEO wages or increase those of their employees, thus increasing the economic rent of the employees. By doing so, it reduces the producer surplus as the difference between the wage that the firm was willing to pay their employees and what the current wage rate is, decreases.]]> 2022-02-08 09:18:27 UTC https://padlet.com/unsworthcalum/wcsxlt21xn4nnf87/wish/2035025224