Pay as a social, and not purely economic issue

I feel that the ministerial pay hike debate raged so fiercely because the government acted as if the issue was purely rational and economic when really it was much more about social issues. While ensuring that the talent higher up in the system are happily paid their worth, the government neglected the morale issue at lower ranks. Here's a relevant article from Stanford Graduate School of Business: Wage Imbalance between CEO and Workers sends a Bad Message.

Wage gaps may also increase the tendency for individuals to perceive more inequity than actually exists, which can amplify the dysfunctional effects. More boards of directors should start looking at executive pay as a social, and not purely economic, corporate issue, says O'Reilly.