Earnings

[Lt. Killer M]

Yesterday we had the big end-of-year meeting at the insurance company sales organization I work for these days. The head of the local branch gave one of his well-known reminiscence/pep talk rambles. He recalled his career, and nice as it would be from a financial point of view to duplicate it (which I won't manage, wrong personality), I was utterly shocked at what this guy earned at what age and with what level of training and education.

I won't tell you just how much he earns now, because that might derail the topic into a festival of numbers. Let's just say that I thought he was talking yearly earnings, or at most quarterly, when he talked monthly.

In any case, this got me wondering: how do other people feel about this?

Personally, I feel that there should be a rough correlation between the amount of effort someone puts into work, the risk he (she, also in the following) takes (health and financial), the drawbacks he suffers, and the compensation. Sure, the world is not a fair and ideal place, and YMMV. But someone with no education, barley any training, who runs no risks, doesn't work long hours, has no trade-offs to make should not earn ten or even more times as much as your average Joe who has to bring qualifications, has to work long hours, and has to fear unemployment without him being responsible most of the time.

What do you think?

[Beorn]

http://news.bbc.co.uk/2/hi/business/8410489.stm highlights a study from this time last year where they went on about how some professions improve society and some others suck value off; for instance hospital cleaners create worth for society (+10x their wage because keeping hospitals clean => healthier people => more productive workforce) whereas banking accountants destroy it (-42x their wage because tax evasion => less social programs).

The study was almost qualitative and gives a pulse rather than a diagnosis, but the numbers really do add up - I turned it into a 'stats for social sciences' assignment last year.

Personally, I feel that individualism ate our society up and the compensation should not be correlated with just risk and effort, but also with beneficial returns to one's community. There is nothing wrong with ambitious people - until their self-promotion starts (knowingly, which is darn close to intentionally) being detrimental to most others.

I feel that very very few professions are actually compensated with regards to any sense of worth that resembles concrete advancement, instead we get a number in some indian programmer's database that represents abstract currency. Sorry for the blanket statement, but as I see it the private sector is all about how much financial returns can be made while public service (here in Canada) earns its job security at the cost of sub-par wages and the social scorn of all those average Joes who have to fear unemployment while having a clock pinned to their butts, pushing them to work faster.

And that western society is run according to those principles just cuts both my arms off, so I'll stop here.

"When plunder becomes a way of life for a group of men, they create for themselves, in the course of time, a legal system that authorizes it, and a moral code that glorifies it.”
– Political economist Frederic Bastiat, The Law [1850]

[Beam]

That seems to be a still-existing-despite-the-financial-crisis-role-model in the financial services / insurance business. Btw, how do you measure his/her efforts, risks, drawbacks, compensation etc.?

Usually this kind of ppl find a provisioned based way of making money and have some sort of charisma to involve other ppl to do the same and get a percentage from them.

[Lt. Killer M]

Originally Posted by Beorn

http://news.bbc.co.uk/2/hi/business/8410489.stm highlights a study from this time last year where they went on about how some professions improve society and some others suck value off; for instance hospital cleaners create worth for society (+10x their wage because keeping hospitals clean => healthier people => more productive workforce) whereas banking accountants destroy it (-42x their wage because tax evasion => less social programs).

The study was almost qualitative and gives a pulse rather than a diagnosis, but the numbers really do add up - I turned it into a 'stats for social sciences' assignment last year.

Thanks - an interesting read, to say the least!

Personally, I feel that individualism ate our society up and the compensation should not be correlated with just risk and effort, but also with beneficial returns to one's community. There is nothing wrong with ambitious people - until their self-promotion starts (knowingly, which is darn close to intentionally) being detrimental to most others.

You have a point there!

I feel that very very few professions are actually compensated with regards to any sense of worth that resembles concrete advancement

Don't get me started on "Merkel's mantra" (Bildungsrepublik = education republic) and the immediate 2% cut to science and education spending whenever she utters the word. I'd earn less than 40.000 p.a. as a scientist!

Originally Posted by Beam

That seems to be a still-existing-despite-the-financial-crisis-role-model in the financial services / insurance business. Btw, how do you measure his/her efforts, risks, drawbacks, compensation etc.?

Usually this kind of ppl find a provisioned based way of making money and have some sort of charisma to involve other ppl to do the same and get a percentage from them.

well, tbh, this guy has little charisma, and he doesn't really fit the usual role model. In fact, the stuff we sell people is way above par, and the provisions are modest compared to what's common in the insurance business. It is the sheer volume of underlings that makes the dough - underlings who's earnings aren't too shabby either! This is not a case of someone high up living off those low down - both profit equally.

How do I measure his risks: I know the business, because I perform the same work (in theory) every day. His risks are none as long as he stays within the law (which he does). He calls himself "a lazy bastard", but he works when others party (i.e., being single he works weekends). I guess he gave up on a lot of free time as a adolescent, but was at that time rewarded with huge monetary success already, which bought him the toys young people love. Overall, once he fought down his inner Schweinehund, I guess he lived a more flexible, more comfy life than all his friends. The compensations was sensational, the drawbacks are nonexistent, if you have an outgoing personality. Overall, all he did was ask the god-damned question that others never asked (and a question you do not ask has already been answered in the negative).

[Stapel]

Originally Posted by Lt. Killer M

What do you think?

I think we live in a free society. Everybody has the bloody right to choose whatever education and/or job he wants. And if some make money, without taking risks, being educated, working hard, or adding value to society, good luck to them!

What's your point?

[Matrix]

Well, in general I would agree with you, Killer. But in my opinion it's always so pointless in wondering how it ought to be. That just turns into a communism vs capitalism discussion: idealism vs realism.

I would just say: apparently this guy was smart/lucky enough to find himself in such a position, but I don't think there is anything wrong with it as long as he's not damaging others, referring to Beorn's link. Some professions are indeed in fact harmful to the economy or people's well-being, in which case it is the government's responsibility to make such activities less profitable. But that's mainly what laws do, don't they?

[Shabbaman]

Originally Posted by Stapel

I think we live in a free society. Everybody has the bloody right to choose whatever education and/or job he wants. And if some make money, without taking risks, being educated, working hard, or adding value to society, good luck to them!

What's your point?

True story.

Originally Posted by Lt. Killer M

Personally, I feel that there should be a rough correlation between the amount of effort someone puts into work, the risk he (she, also in the following) takes (health and financial), the drawbacks he suffers, and the compensation.

I guess he is taking risks, or he is making difficult decisions. He's not making them for himself, and it's not his money that he's gambling with though, so I understand why you feel he shouldn't earn that much money. I totally garee However, I figured out that if someone else is making even more money based on someone's actions, he's willing to pay him more money. If you make 100k in profits, why not give him a 10% bonus? You'd still end up with 90k that'd go in your own pocket without doing anything. I'm basically doing the same work as a finanicial analyst, but I'm doing some technical job that doesn't earn the company money. My advice is what makes other companies or governments do their job. It doesn't earn them anything directly, rather indirectly. In the end that's the same thing, but somewhere along the line society decided that people working for a bank or an insurance company are doing a more important job than someone who's working in urban planning. It's a free society indeed. Apparently freedom leads to retardation.

[Socrates]

Originally Posted by Stapel

I think we live in a free society. Everybody has the bloody right to choose whatever education and/or job he wants. And if some make money, without taking risks, being educated, working hard, or adding value to society, good luck to them!

I garee with stupid ! (Am I becoming a liberal or what ? )

Basically, as long as we're talking about the private sector (as opposed to the public sector), anything is free to happen, be it OK with the law.

This doesn't prevent me from having a scale of morality, a sense of judgement, and to tell what is fine and what isn't. If I'm really not happy about what's happening in my company, I have the freedom to quit. If I'm unhappy about how one segment of economy is run, I am free to start my own business.

There are asses everywhere, absolutely everywhere. In any case, if you feel you can eventually outproduce such a guy and want to, do it. If you feel you cannot do that but suffer from such a situation in one way or another, well, take a decision but move on ! If it doesn't bother you, forget it.

I dunno if I answered some of your point.

[Rik Meleet]

I started reading this thread, thinking it was about earrings.

Originally Posted by Matrix

(..)I would just say: apparently this guy was smart/lucky enough to find himself in such a position, (..)

Lucky is the word. If you are lucky enough that your family is part of the establishment, your wheelbarrows are plenty and influential. If you are not lucky than your life and career will be a struggle.

Killer: should/could/would. Yes I agree that reward should be in line with elements like: supply-demand, risk, effort etc. But that simply is not realistic unless society is prepared to make big changes. Since the steerers of society are the ones who would be the ones sacrificing the most stuff like privileges and power for this. It's not going to happen. Unfairness is one of the pillars of this society.

[Matrix]

It's not just luck. There are plenty of opportunities offered to everyone, but most people don't see the opportunity or are just too lazy to go for it.

But I wholeheartedly garee your second paragraph. (Except for the last sentence, perhaps.)