The claim that high pay is necessary to attract and motivate good workers is not merely an economic postulate. If it were, it could apply across the wage distribution. Instead, it functions as a defence of inequality - used to justify higher pay for the rich, rather than for any job. For grunt workers, wages are a cost to be minimized regardless of consequence.This is a really good point; if wages for managers were treated like an expense for the company (instead of as an investment in talent) then would we have seen manger salaries rise so far in recent years?
Why do we not have the same sort of bidding war for mid-level talent? I have the same question in a different way: why are managers getting high wages is seen as a sign of paying for talent but union workers are seen as using sleazy tactics to work the system? Do we see corporate boards setting salaries for CEOs as being fundamentally different than governments setting wages for government workers? In both cases a group of experts are setting wages based on expert opinion and not on free market principles.