I think that there a disconnect between actual worth and market value. Many people and especially theoretical economists would disagree with me, but I shall attempt to explain myself.
Suppose that you have a firm making widgets. There are people on the factory floor who operate the widget making machines, and elsewhere you have management, accounting, and ancilliary staff like cleaners and maintenance workers. All of which are important to the effective running of the company, and without them not only the factory but the firm would come to a halt. Their wages however I think do not actually reflect "worth" but market value.
I think that there is a great deal of difference between what workers are actually worth and what they are paid. People who are paid less often return multiples of their wage in value to their firms, whereas at the other extreme, plenty of managers, opera singers and people like premiership footballers are overpaid for what they actually do.
I'm not suggesting that management, opera singers and footballers don't work hard or long for their money. But at some point I think that there is a line where people are paid rewards for the effective work that someone else has produced.
The most obvious example of this is shareholders. Quite rightly shareholders as contributors of capital are paid the due reward for their capital as dividends, but the shareholders themselves contribute no work to the firm whatsoever and without them, there would unlikely be a firm at all.
Personally I suspect that there is a smudgy line which can be drawn; above which point the people who are paid those wages do not actually work for them.
The minimum weekly wage in Australia as at 1 Oct 2009 was $543.78 per week. I assume that this was for a 37.5 hour week giving us $14.50. Assuming that there is a real increase depending on actual skill involved if you double this you end up with $29.00 per hour. Also assuming that instead of working a 37.5 hour week, someone worked an 70 hour week, we end up with $2030 per week or roughly $106,000 a year.
I will go out on a limb and suggest that everyone earning more than $106,000 didn't actually work for their money, but at some point is profiting from the work of other people. I'm not suggesting that this is the result of economic graft, but I am suggesting that it is practically impossible to actually do the work required to earn that money.
The combined payout, which includes benefits and options built over his time with AXA, would give Mr (Andrew) Penn a higher pay than the $16 million received by the Commonwealth Bank CEO, Ralph Norris, last year.
As a shareholder of the Commonwealth Bank I ask the question if Ralph Norris is really worth $16m a year? Did he work for that money or was he paid the because of the forces of supply and demand? I know that I could fulfil that job maybe not as well, but at even 1% of that salary I'm pretty confident that I still would not be able to actually work for it.