Compensation Packages Awarded College Graduates with MBA Degrees

Former junk bond multimillionaire Michael Milken became symbolic from the avaricious mindset of this era. A characteristic on the financing frenzy was a decline in spending on actual wealth, e.g., equipment, new plants, search and development, etc. As the economic bubble burst, companies turned to austerity measures defined by euphemisms for example "downsizing" "rightsizing" and "restructuring." These terms translated into loss of task for American workers, especially corporate managers: "While layoffs hit persons at all levels in the corporate structure, the heaviest blows fell on middle-level managers--the people who eat the decisions of top corporate executives and translate them into particular actions being carried out by employees" ("Lean and Mean," 1988, p. 101). Career security became a thing on the past as managers at corporate giants like IBM, AT&T, and Citicorp joined the ranks on the unemployed.

Now that millions of work were eliminated and the nation's overall economy shows signs of improvement, a brand new economy has emerged. This economy reinforces America's two-tiered society where the rich profit though task opportunities for your middle class rapidly disappear: "By 2020, the top fifth of American earners will earn over 60 percent of American income, on the bottom fifth dropping to A couple of percent" (Wirth, 1992, p. 199).

From a supply and demand analysis, the high salaries paid recent MBAs are needed to attract top talent. Inside a tight labor market, employers need to undergo significant lengths not merely to attract, but also to preserve employees. Unemployment is at its lowest levels in 2 decades. Overall, the unemployment rate stands at slightly under 5 percent but the managerial and professional unemployment rate is a couple of percent, a seven-year low (Hirsch, 1997, p. 52). The dearth of qualified managers has produced a hot industry for recent graduates. Despite their recruitment efforts, many employers encounter beneficial issue with regards to hiring: "[About] 60 percent of human resources chiefs surveyed by the American Management Association in April report shortages and delays in hiring skilled workers and managers" (Fisher, 1997, p. 154).

The key question in terms of compensation is, how a lot is too much? In recent years, the public has expressed outrage over soaring executive pay, in particular in light of corporate downsizing and stagnant or declining wage levels for workers at the bottom rung from the economic ladder. Based on Gordon (1996) this wage squeeze is often a feature that is certainly certain to American industry: "Wage stagnation in the United States stands out being a sore thumb. It is the only nation with wage improve around zero" (p. 25).

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