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Salary disparities

You have been invited some neighbors over for dinner including couples from Japan, working here on a temporary assignment. As the conversation turns to the differences in working style, you recall the following: '' In the United States, key executives make the important decisions. Although Japanese leaders also take responsibilities for their organization's performance, they involve workers in 'quality circles' to discuss decisions that affect them. A closer relationship is also encouraged by Japan's lower salary difference between executives and workers: about 10 percent of the difference that is typical in the U.S. ''.

QUESTIONS:

1. Can the large differential between workers' and executives' salaries in the U.S. be justified especially when compared to significantly smaller differentials in other countries?
2. Could the disparity eventually lead to the class conflict that Karl Marx and Max Weber predicted would eventually occur in capitalist society?

Thank you for this assistance. It is much appreciated.

Solution Summary

In reference to the scenario, this solution explores if the large differential between workers' and executives' salaries in the U.S. can be justified especially when compared to significantly smaller differentials in other countries. It then discusses if this disparity could eventually lead to the class conflict that Karl Marx and Max Weber predicted would eventually occur in capitalist society.

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