Celebrities and entertainers +86 Professional athletes +85 Lawyers +81 Presidents of major business corporations +74 US Senators and Congressmen +65 Doctors +63 TV news anchor people +57 Senior level managers in the federal government +53 Investment bankers +51 Middle level managers in the federal government +38 Military officers -2 Long-distance truck drivers -37 Nurses -40 Skilled factory workers -45 Policemen -51 Public school teachers -58 Secretaries -61 Restaurant workers -80
The numbers are the difference between the percent saying overpaid and the percent saying underpaid. For example, 87% say celebrities and entertainers are overpaid, and one percent say they are underpaid, for a score of 87-1=86. The basic pattern is that people say occupations with high pay are overpaid and occupations with low or moderate pay are underpaid. But that raises a question of why investment bankers, a famously well-paid occupation, don't rank higher.
Perhaps it's because with most of the high-paying occupations that they asked about, there is an obvious zero-sum element: people figure that if they made less, prices or taxes could be lower, or ordinary workers in their companies would get paid better. But investment bankers don't directly sell anything to the public, so people don't see who would gain if they got paid less. If this is correct, it may help to explain why the rise in top incomes over the last few decades hasn't caused much public reaction. High salaries in finance, which has contributed a lot to the rise in inequality, just seem to appear, rather than to be gained at anyone's expense.
Note: data from the Roper Center for Public Opinion Research
The early and mid-1990s, to my recollection, were also a much less booming (and hence publicly prominent) time for investment banking, compared to the roaring 80s and the dotcom bubble that ran from roughly 1995 or 96 to 2000. Kidder Peabody, LTCM, Barings and of course Drexel all failed around that period if I'm not mistaken. Maybe in 1994 when this survey was done the pollsters just caught the public at a relatively low-water mark of hostility to bankers.
ReplyDeleteI don't think that people are very sensitive to current conditions on questions like this. Of course, I can't prove that, but see my post of 3/26/13 for some suggestive information.
ReplyDeleteYou are probably right on that. Too bad the '94 Roper survey didn't ask if people thought that organized crime was overpaid or underpaid as a profession.
ReplyDelete1994 predates the financial boom of the stock market in 1995-2001 and the 1998-2006 housing bubble. I think in 1994 a major seed of banking deregulation was planted. It would be interesting if other names were used (and I know they have been) like "Wall Street" or "bond traders." celebrities are much more well known than hedge fund managers, think of Tom Cruise's thus far lifetime net worth (let's say $250 million) and then compare that to a handful of hedge fund managers who accrued $1 billion in a single year of trades (of course many of the trades were in the works years before they realized the income).
ReplyDelete-Tom Volscho
The amount of pay appropriately allocated is relative to the distribution of abilities in the population. I gather that most people could do an adequate job in a restaurant and therefore those workers should garner average incomes. Look at it this way: they don't need a higher than average IQ to do adequately nor do they need significant physical strength or endurance. Doctors are not overpaid because most people going to doctors cannot do the doctors job even with training- in fact most doctors are underpaid (excluding the ones that got certified but are still inept; our society will advance people for reasons not related to professional competency per se such as knowing the right people or having money to start with). Someone is only overpaid when their customer could do their job and is being charged more than they could do it for regardless of whether you actually are trained for it or not- its based on if you could do it and how many other people could do it too.
ReplyDeleteIf you include the existence of billionaires and hundred millionaires, all work is underpaid..The average IQ of millionaires is 110 and billionaires is 120. From that, it follows that 25% of people are smart enough to learn how to manage millions and 10% of people are smart enough to learn how to manage billions. Unfortunately, geniuses are expected to be subordinate to pay masters who can't even understand what the genius does.