Peter Van Doren joins us this week for a discussion on how wages are determined in a market economy.

Is there a correlation between a worker’s productivity and the value they provide for society? Why has CEO pay increased so much lately? Should the government have a role in fixing unequal or unfair wages?

Show Notes and Further Reading

Van Doren mentions this blog post by Robert Lawrence on the gap between real wages and labor productivity. See also this link for the same discussion (only with Canadian data) on the terms of trade between what workers make and what they consume.

Here are papers by Kevin Murphy and Steven Kaplan on CEO pay.

Van Doren also mentions The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies by William Fischel.

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