We know that Goldman Sachs has recently raised its base rate for CEO Lloyd Blankfein from $600,000 to $2,000,000 and then he gets on top of that bonuses (worth $12.6 million). In investment banking, a First Year Analyst with a Bachelor's degree can earn form $90,000 to $350,000 (including bonuses). A Vice President with a degree and 3-6 years experience can earn from $350,000 to $1,000,000.
Looking at the median pay scale of teachers in the United States, the Median Salary for a High School Teacher was listed as $43,355; for a Special Education Teacher in a Secondary School, the median salary is $43,889. As far as I know, these teachers don't get enormous bonuses for having successfully taught school.
There is something terribly wrong when the making of money by an investment bank that has no clear social value for the whole of society (except to make lots of money for itself) pays more for its employees than teachers who are equally well educated. Teachers are far more important because they pass on the values of the society to the young; they help students to live in the world; they prepare the citizens of tomorrow and yet the pay they receive is far short of the value of the job they do in society.
That pay inequality is the moral and ethical dilemma that most threatens the economy of the US.
Sure It's Legal...But Is It Right?
submitted to ZeroHedge by Phoenix Capital Research
I’d like to ask your indulgence today.
Typically we reserve these pages for in-depth analysis of the stock market and economy. But I’ve grown FED UP with the complete lack of coverage that one area of the current crisis has received.
Ever since the Financial system started imploding in July 2007, I’ve heard countless folks talk about liquidity, bull markets, bear markets, the dollar, bailouts, etc. But there’s one thing I’ve heard virtually NO ONE talk about. That is:
MORALITY or ETHICS.
Everyone’s analysis of this financial crisis is far too complicated. The simple facts are that it was created by complete and utter greed on the part of various regulators and financiers.
In simple terms, the banks (investment and otherwise) lobbied Congress, the SEC, and other regulators to let them engage in business practices that were neither sensible nor responsible (excess leverage, financial wizardry that turned junk subprime assets into “AAA” rated entities, and more). They did this under the pretence that these practices would be good for the market and US economy as a whole.
The reality is that these practices allowed the banks to make ENORMOUS profits: between 1970 and 2003, financial stocks’ earnings as a percentage of the S&P 500’s total earnings rose from less than 10% to 31%. Put another way, by 2003, financials accounted for nearly 1/3 of ALL profits made by publicly traded companies.
Now, THE largest expense for any financial company is SALARIES. So when banks and financial companies lobbied to have their leverage limits increased (or any number of other changes that were made in the ‘90s and ‘00s), they did it for one reason: to collect HUGE payouts.
These folks were driven by greed and nothing more. They didn’t want more people to own homes. They didn’t care if folks lost money buying the AAA rated garbage they pawned off on pension funds and the like. They didn’t care if their OWN balance sheets were cesspools of crap loans no one would ever pay back. Heck, they weren’t even looking after their shareholders (leverage of 50-to-1 makes it extremely likely you’ll end up wiping out ALL equity sooner rather than later).
No, they wanted one thing and one thing only: to make as much money as they possible could.
And boy did they.
In 2007, the average Goldman Sachs pay was $661,000. For Morgan Stanley it was $340,000. Again, these guys were after one thing: BIG PAYOUTS.
Read the entire article here