Executive Pay Is the Skeleton Key

Finance holds a disproportionate amount of power in sheer economic terms. (It represents about 7 percent of our economy but takes around 25 percent of all corporate profits, while creating only 4 percent of all jobs.)

Since the pay of each individual in the union is determined by factors other than his own achievement, his incentive to produce deteriorates. Once again, the overall output is bound to be reduced thereby — which means that the overall reward to be shared won’t be as high as it could be.

compensation attained by senior partners) come only in part from the high hourly (or daily) rates that the top professionals can charge

Here’s how they do it: wages + taxes + benefits + overhead. So, if an employee is paid, let’s say, $12.00 an hour, taxes and Social Security and workers’ comp and so on add, say, 30%, that puts us at $15.60 an hour. Then add the health care plan, the 401(k) matching contributions, the Christmas bonus, etc.—let’s say that calculates out to another $