[CWuestefeld]

Pay is not determined by the difficulty or unpleasantness of the job, or at least, not directly. It is determined by the balance of supply and demand.

That's true, but the market is ridiculously deformed on both sides of that equation. On the supply side, there are many who would like to be cops but the requirements bar them entry (most often for legitimate reasons, but I suspect not always). On the demand side, America's constant quest for new crimes to be defined and new police powers creates an artificial demand. I mean, most people I know don't see a demand for policing those smoking marijuana, but legislation forces it.

You can't be paid more than what you are worth

That depends on the definition of "worth". If you determine it rigorously as an economist would -- how much less money would the organization make without this employee -- then you're right. But if you define it in terms of the employee's productive contribution, it's a different story. Again, regulations cause some of that different (the need to have a figurehead owner who is a state resident, in some jurisdictions, is just deadweight but a requirement for doing business); in other cases it's contractual obligations (i.e., to be certified to sell some Cisco product you must have on staff one Cisco-certified engineer, even though you're not using his services as such).

[jerf]

I think you misunderstood when I said you can't be paid more than you are worth; I don't mean that you can't overpay someone, ever, I'm saying that nobody, government or otherwise, can persistently over the long haul pay its employees more than they are worth. I'd say any definition of "value" or "worth" that does permit that is so broken as to be useless. It's simply impossible; a system simply can not have more value flowing out of it than the sum total of the value it generates, the value it takes in, and the value it has on hand, and imbalances in income vs. outflow tend to be able to rapidly deplete the stored value.

That the market is "ridiculously deformed" here is sort of my point, along with the fact that such deformations can not be sustained.