Throughout human history, in all hierarchical work structures, people higher up been remunerated better.

The main reason it is this way is that the organization grows by adding "leaf nodes" at the bottom, as cheaply as possible.

For instance, say you have a business in which you're the only employee, consisting of laying bathroom tiles. You make decent money, but you do this messy work all day long. You want to work less and make even more money. Hmm, what to do? Your options:

- Move to Beverly Hills and be a "tiler to the stars", charging more.

- Get an assistant to work faster.

Usually, the second approach is selected (with the first possibility being kept in mind for the future).

The next step is to let the assistant work independently, while you go to a different site, or work on business activities like advertizing or consulting with customers.

Then, you get multiple such assistants working on multiple sites. Of course, these workers are not nearly as well paid as you are when you do the bathroom, because some of the revenue goes to you (remember your goal: make more money).

The workers are not well paid is justified because all they do is show up to a designated site, and do the work with materials and tools supplied by the company. They accept that if they want more money, they have to become independent, which means doing things like advertizing, consulting with customers and such. Some of them don't even see themselves making such a move.

Okay, so now you have multiple installations going on in parallel and you're not laying tiles yourself so much. You go from site to site during the day, checking on these workers, and from time to time you see they are doing some things wrong and so you teach them the craft. Everyone treats you with fear and respect, and so you think, damn, I want even more money!

To make more money, you expand the organization even more: more active sites at the same time. Now the problem is that there are too many sites. Previously you could visit each site several times a day to supervise work. Then it was just once a day, and now there are too many sites; if you visited them all, then you would spend all day going from site to site.

The solution is to get some middle management: supervisors. Just like you, they are paid more than the individual installers. If they were paid less, why would they do that job, instead of just working as installers? They are experienced installers: they know the craft and can tell if something is not being done right. Yet, they don't make as much as you do, otherwise what would be the point of all this expansion?

So the pattern here is that the bottom-of-the-org-chart installers do not make any more money as the operation expands; in fact they probably make less as the organization grows bigger, though their employment is more stable. They have to work to sustain the overhead of all these additional people.

In other words, an operation expands so that there can be higher levels that make progressively more money.

If you have any salary inversion in the tree, then people will not want to be at that position in the tree. Supervising people is a headache! Why would anyone take less money to manage some people, if he or she could obtain an instant raise just by dropping down one level and joining them?