Question

Suppose that, in commenting on Japan’s system of offering some workers lifetime jobs, an analyst claims that Japanese employers are paying their senior workers more than they are worth. Is this comment consistent with economic theory? Explain

Answer 1

The statement is not in concordance with economic theory of efficiency wages where wages are more than industry standard. Since senior workers are given more based on seniority rather than performance it is in violation of Civil rights Act 1964 Title VII and discrimination effort. Also here we don't see any sort kf efficiency wages and hence the practice of paying more is absurd ajd unjustified.