In Felix Salmon's post The Plight of the Overpaid, he details Gabriel Sherman's New York Magazine article The Wail of the 1%, which takes on those bankers that feel they still deserve to be paid in excess:
As Sherman says, bankers are the last Americans to Get It: they don’t think that the excesses of Wall Street were responsible for wealth destruction rather than wealth creation, and they still think that a degree from Wharton is, in and of itself, a Good Thing. One financier essentially tells Sherman that the going rate for any job which involves being woken up in the middle of the night should be roughly $2 million a year — which is not the kind of attitude guaranteed to make you friends among, say, the farming community.The entitlement is striking, but is somewhat explained by the reality that the third quartile American earns 2x more than the first quartile (i.e. what has been reality becomes ingrained that it should be reality).
Most people outside Wall Street have come to the conclusion that excess pay was a direct cause of the current meltdown, but the highly-paid symbolic analysts at our biggest investment banks somehow have a massive blind spot when it comes to that fact.
Yet 'Wall Street' vs. 'Main Street' is far from the only source of inequality that remains. In fact, according to the BLS the median Asian man earns more than 50% more than the median Hispanic man (both of which earn more than the woman of either race).
While I absolutely believe in capitalism, getting a brand name education, a finance job, and being the "right race" should not in itself equate to substantially more income than someone who just didn't have the same opportunity (this coming from someone who went to an Ivy League business school, works in finance, and is white so take that with a grain of salt). While I do not believe in the redistribution of wealth for redistribution of wealth's sake, if taxes are used to create the same opportunities for all and shifts income to jobs that truly add value to our economy, I'm all for it...
Source: BLS
If you want to look at Wall Street vs. Main Street, you may have to find income data by profession/job or some such characterization. There are a lot of people in the non-financial private sector as well as government who are highly educated, yet make much less money than I suspect do their counterparts on "Wall Street"/finance/banking/insurance.
ReplyDeleteFrom the article: “Most people outside Wall Street have come to the conclusion that excess pay was a direct cause of the current meltdown”
ReplyDeleteSee, that’s a huge part of the problem with this whole thing.
No, the “direct cause of the current meltdown” was immediate-gratification, financially-undisciplined folks who wouldn’t take 5 hours to a) read their mortgage contract, and b) calculate their annual cash flow.
It’s always the other guy, never me, right?
"if taxes are used to create the same opportunities for all"
ReplyDeleteand what do you think the chances are of that happening? i'm 0 / 20%on that mkt.
unfortunately, i agree.
ReplyDeletehowever, money targeted at education and healthcare (although no doubt with some unintended consequences) are good starts down that path.