You are probably not aware but in Google and many other companies it is very normal and in fact common to have a manager earning less than an employee reporting to the manager. I have not experienced any kind of friction due to this. Why should it? It's only fair that someone who brings more value to the company should earn more.

Having said that, Google is not your typical company. I know managers in Google who push thousands of lines of code per week and are often more productive and more hand-on than the engineers that report to them. In such cases, it is only fair that they earn more than the engineers.

I agree with dasil003 that your cynical view breaks down in productive technology companies. Maybe that's what you have experiened but the places I have worked at had no resemblance with the court of Julius Caesar and the managers were definitely not mere email routers.