Author Les Leopold recently posted a blog on the Huffington Postthat tells us that the top 25 hedge fund managers walked away with approx. $1 billion each in 2009. With the money those guys made, we could have hired 658,000 entry level teachers.
Is this, as Chris Dixon (the guy BusinessWeek named the top tech angel investor) says, "a reductio ad absurdum of our values/economy"?
Why aren't we more hot for teacher?
Thoughts?
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Hedge fund managers are overpaid relative to the value they provide society. But when you hear about the top 25, you don't hear about the thousands of other money managers who failed and lost a lot of money, including their own.
This is somewhat of a a risk-reward scenario - teaching is a safety profession and until teachers as a constituency opt for merit-based compensation, they'll (rightfully) be underpaid.
I'm all for society adopting a more equity-like approach to most anything.
Teaching is life's Plan B. They're paid accordingly.
Think about all the people in this country that are borderline retarded, and then ask yourself, do we really need 600,000 more teachers? That isn't to say hedge fund managers aren't overpaid relative to societal worth, but I'm getting really sick of the teacher's unions with a metaphorical gun up to my head while they reach in my pocket telling me to "save the children".
/rant
What a ridiculous comparison - almost all of that compensation is a performance fee for making money for investors, not a salary. Teachers should stop whingeing, they do an extremely easy job, work short hours and get about 100 days of holiday per year.
The only teachers putting in any legit work are at inner-city Catholic and charter schools.
Public schools are trash.
This thread is making me feel very guilty. I hope God forgives me. Charity is the only thing that keeps me sane. I've thought about this for a long time. I mean, why am I so special that I think I am worth 2000 Lawyers, or even 2? Or 100 doctors, or 10000?
Those guys went to the same target schools we did and probably got better grades and work harder for their money now. Our analyst stints are shits and giggles compared to what doctors go through day in and day out. I just don't see how any value we add could be worth THAT much. It does not make too much sense to me.
I mean really, do you guys actually think that our contribution to society is just that much more useful than doctors? We are talking several multiples of utility here - hundreds in some cases. Is Steven Cohen worth 1000 doctors? Is John Paulson worth 2000 lawyers? I know the standard, “we make the market more efficient” crap, but is having an efficient market worth all that?
Lawyers are the true scum. Trial lawyers make the world poorer, less free and less ethical.
Is having efficient nanotechnology, biotechnology, robotics, and space technology in 2050 instead of 2500 worth it? That's billions of lives enhanced and saved - it's worth it. It's pretty apparent how efficient markets speed technological progress. Enabling economies of scale and financing organizations, whether through mergers, debt, or equity, is underestimated as far as its productive value as these exponential effects accumulate over time.
Now of course you can debate on whether teaching improves the effectiveness of future engineers and researchers more than the exponential effect on base economic and tech growth that the financial industry provides via liquid financing and reinvestment opportunities - They both are extremely valuable, that's for sure. What we do know is that some forms of financing are crap (government enabled reckless consumer demand, especially sub-prime, and those MBS that are tied with) and some systems of education are crap and waste what teacher labor is available (public schools).
most teachers add about as much value as consultants...
doctors, scientists, engineers, teachers will always be >>>>>>>>> bankers, hedge fund managers, finance guys
the LHS are immeasurably more valuable to society, the RHS just make money off of money and fuck everyone out of their retirement savings every 8-12 years.
of course bankers, hedge fund managers, finance guys>>>>corporate lawyers
How vs. Why
The people who know "how" to do something (doctors, lawyers, teachers, contractors, etc...) will always work for and make less than the people who know "why" something needs to be done (entrepreneurs, investment bankers, most finance types). That's life.
I have to tend to agree with the teacher-bashers. Teachers work 8:00am-3:00pm with an hour for lunch and an hour prep period. Really, they work 5 hours per day, but let's say they work 7 (assuming that any reasonably efficient person can grade the quizzes/tests/homework assigned in the 5 real hours of work in the 2 they have off but are supposed to be 'in the office'). US teachers work 180 days per year, 7 hours per day. 1260 hours. The average teacher in the US makes about $42.5K per annum. That's $33.73 per hour for people with education degrees. That's basically like majoring in 'vacation studies.'
AND, they don't pay social security (because they have their own retirement schemes), get the 'warm glow' of working with children and (allegedly) bettering society, and have tenure. From what other job can't you be fired for incompetence? Everyone has unemployment insurance, but only teachers have incompetence/laziness insurance. Clearly, that sort of job security has to be worth something. Would teachers (as a whole) be willing to sacrifice tenure to earn $10k more per annum? I doubt it, but let's say that's the case. If we value tenure at $10k per year, then teachers actually make $41.66 per hour in the US, and they can make that coming from any university.
By comparison, your $200k degree gets you a job as an analyst in I-banking working 80-120 hours per week, making $70k per year. In even a mild I-banking environment, you will work 4000 hours per year (at minimum). That means that you will need to earn ~$167k before you are making the same per hour wage as a teacher with tenure. Most of you will have to wait until 3rd year analyst or 1st year associate to make that sort of scratch, which means you will probably have to go back to b-school to be in that range. So you spend another $150k going to HBS to finally beat teachers in hourly compensation. That's $350k in education just so you can have the honor of working 4000 hours per year making what an average teacher does per hour.
In truth, we remunerate teachers quite well for their level of education and work ethic.
I'd have to disagree with your logic; the teachers you are basing your assumptions on are the ones who don't care about their students, but a large portion of teachers in my personal experience, do. I'm getting ahead of myself though, as the actual average teacher, at least in the Dallas/Ft. Worth metroplex are required to be present at work between 6:30 - 7:30 A.M. depending on seniority, must stay till 4:00 - 5:00 P.M. depending on position, and that is not inclusive of work taken home. The average teacher brings home a minimum of two hours worth of work; and this is all for the average teacher, not those that go above and beyond. So let's recalculate here:
6:30 - 12:30 = 6 Hours, 30 Minute Lunch, 1:00 - 4:30 = 3.5 Hours, 2 Hours Work Take Home, Total = 11.5 Hours per Day. 11.5 x 5 Days Per Week = 57.5 Hours Per Week. 40 Weeks (52 Less 4 x June/July + 2 x May/August) x 57.5 Hours Per Week = 2300 Hours Per Year. Average Annual Pay of $42,500 / 2300 Hours Per Year ~ $18.48 Per Hour.
Now, assuming your minimum again for I-Banking of Average Annual Pay of $70,000 / 4000 Hours Per Year = $17.50 Per Hour. The difference is not substantial on an hourly basis ignoring bonus. Incorporating a middle bonus taking you to an even Average Annual Pay of $100,000 / 4000 Hours Per Year = $25.00 Per Hour. Yes, your pay isn't vastly different from teachers, but at this point you're entry level and already beating teacher pay by a mild margin.
Understand, I'm not stating that $1b is exorbitant/wrong for compensation, that hedge funds don't serve a purpose, or demeaning the vast effort and cost of getting into and staying in I-Banking/PE/HF. I'm just saying people need to stop using teachers as their comparison for corporate greed, #1, and that bashing those who provide what is considered a necessary service at a substantially decreased income from I-Banking/PE/HF isn't deserved, #2. True life isn't fair, but no one asked it be right?
Also, as to the amazing retirement option you speak of, for most teachers, at least in Texas, it equates to 1/3 or less of annual average salary, so they too have to seek Social Security benefits in retirement. Consider that before "throwing the baby out with the bath water" so to speak.
-N.
Teachers are mini unions.
We could buy 8 teachers on Obama's salary. Let's get rid of him and replace him with 8 teachers.
I second the motion. We can now have a vote.
Regards
"Teachers should stop whingeing, they do an extremely easy job, work short hours and get about 100 days of holiday per year. " I don't think it's such an easy job, but you're right on the other points.
I learned long ago, that to get paid you need to be able to point to the money you made. Teachers cant do that.
Since when is a person's pay indicative of their worth as a person?
Also, teachers are paid more than hedge fund managers. There are about 3 million teachers in the US and the median salary is ~$46,000. Teachers are paid $138,000,000,000/year.
Depending on your definition of "hedge fund" there are ~10,000 in the US. I think it'd be a stretch to say the average hedge fund manager pulls in $13.8 million/year. Also consider that the distribution is very skewed toward the top performers.
This is capatalism. That sentence in and of itself makes this a bad argument. The two are PAID by totally different entities (one by capital markets,the other by the govt) This is a totally unfair comparison.
This is capatalism. That sentence in and of itself makes this a bad argument. The two are PAID by totally different entities (one by capital markets,the other by the govt) This is a totally unfair comparison.
What a waste of Internet space.
..
Surprise, surprise life isn't fair. No one put a gun to their head and told them to be teachers much like no one put a gun to anyone's head here and told them to go into banking. They might not make as much but they definitely have a lot more free time. I think they call that a tradeoff.
It's called capitalism. You're paid by the market, not by some obscure concept of a collective 'society' for your percieved 'value'.
Teaching is not that competitive, anyone smart enough to succeed in finance could probably brush up on almost any subject and teach the pants off 99% of public school teachers. Obviously, this puts downward pressure on wages.
If we want teachers to be paid more privatize all schools. They wont make investment banker pay, but their pay would correspond to the value the parents think they contribute.
I second, third, and fourth that motion.
A salary can indeed be seen as one's contribution to society. In equilibrium, our marginal rates of substitution are equal. That is, bankers MUST be sacrificing something for their high salaries, be it their free time, their family, or their soul.
If teachers don't like it, they let them be bankers, holy fuck.
Disclaimer: my wife is a teacher.
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