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>> Greenspan is not alone in his thinking that STEM worker salaries should look a lot more like non-STEM worker salaries. In March, over “100 executives" [wrote

by freyr 13y ago

>> Greenspan is not alone in his thinking that STEM worker salaries should look a lot more like non-STEM worker salaries. In March, over “100 executives" [wrote an open letter begging Obama to increase the number of H1-B visas] Perhaps, as STEM workers, we should suggest that executive salaries should look a lot more like non-executive salaries? >> And those [immigrant] workers would compete with high-income people, driving more income equality. Really, Greenspan? You're going to paint STEM workers the posterboys for income inequality? Not your banking brethren making 5X, 10X, 50X the average STEM salary? It's a cheap, transparent ploy by those at the top to increase corporate profits at the expense of the workers and the middle class.

Mikeb85 13y ago
From an economist's perspective, STEM workers are still just labour. 'Bankers' represent investment, and their compensation is based mainly on the fact that they take on risk by allocating money... Compensation is based on supply (which itself is based on many factors, including education and demographics), demand (number of businesses in a market, demand for the products created by those businesses), and risk. Assuming no government meddling, an efficient market will properly price workers wages. What Greenspan is suggesting makes sense from a macro perspective, but of course on a personal, human level, isn't ideal for many people.
- afterburner 13y ago
  Banks, not bankers.
- dvanduzer 13y ago
  I don't understand why you put 'bankers' in 'quotes' like that. Saying bankers represent investment isn't exactly non-controversial.[0] Perhaps that's exactly what you're saying? [0] https://en.wikipedia.org/wiki/The_aftermath_of_the_repeal_of_the_Glass–Steagall_Act https://en.wikipedia.org/wiki/The_aftermath_of_the_repeal_of...
  - chc 13y ago
    I think he quoted it because that was the word used to denote the class of people in the post he was replying to.
  - gaius 13y ago
    A normal banker doesn't take any risk himself, he risks money belonging to others. Back in the old days, Goldman Sachs (for example) was owned by the partners, who were risking their own capital in every transaction. That setup is very rare these days. An investment banker should be paid like an accountant or a lawyer, well enough by most anyone's standards, but in line with what the work actually is.
    - waps 13y ago
      Why not tell the rest of the story ? Then a crisis happened, where a lot of banker's decisions turned out wrong due to factors that cannot reasonably be said to be the fault of those bankers. A lot of people, who were told beforehand that their money was indeed at risk in trade for that "interest" demanded the government step in and guarantee the deposits (which the government didn't do for them, but implemented for all savings from then on). This meant that anytime a sizable bank would topple, it would cost the government massive amounts of money, which meant the government became complicit, by necessity more than by bribes, in making banks grow and bailing them out if "risk" strikes. Which is what you're complaining about. BTW: the "risking your own capital" demand also meant that only the wealthiest of people and their immediate families could reasonably get jobs at banks, for obvious reasons. And I'm certainly not unhappy that particular tidbit ended.
      - gaius 13y ago
        But that's not true and that's easy to prove: back in the day, not every employee of GS was a partner! Just like not every employee of a law firm or an accountancy is a partner. There are plenty of other industries too where owning something needs a massive amount of capital, and risks large amounts of capital - factories, airlines, even farms - and yet people get jobs all the time.
      - 13y ago
- briancaw2 13y ago
  Greenspan is saying that STEM workers shouldn't make more than other workers. The argument isn't for increasing worker supply from external sources in general, it's for targeting STEM for more visas. It's known that students find STEM harder in school and STEM jobs are widely considered more difficult than other jobs, thus earning their wage difference. Like it's been said by others, this will result in less STEM degrees domestically, the exact opposite of how this problem should be solved.
  - eli_gottlieb 13y ago
    You and I disagree with Greenspan on the basic "should" here. The point of neoliberal policy-making, remember, is to maximize capital growth and minimize inflation by suppressing the price of labor.
- deleted 13y ago
  [deleted]
- praptak 13y ago
  > their compensation is based mainly on the fact that they take on risk by allocating money... I can't believe anybody can say that with a straight face, not after the bailouts.
  - Mikeb85 13y ago
    That's your government's failing, not the market's.... Real capitalism would have been letting them fail, but I don't know if Americans would have the stomach for what would have happened afterward...
- gilgoomesh 13y ago
  From an information theorist's perspective, bankers don't create anything, they just skim a percentage off of other people's transactions – they're a drain on the system. STEM workers create assets from nothing – the best STEM workers create billion dollar (or more) industries from nothing. Bankers just move existing assets around – they're fat that needs to be trimmed.
  - waps 13y ago
    From an economic perspective, what bankers create is correct allocation of economic resources. I doubt that that is how banks create their money these days though.
- dragonwriter 13y ago
  > Assuming no government meddling, an efficient market will properly price workers wages. The assumption is unnecessary, since an "efficient market" by definition includes no government intervention other than that which increases efficiency (e.g., by effectively internalizing externalities.)

by freyr 13y ago

Mikeb85 13y ago

From an economist's perspective, STEM workers are still just labour. 'Bankers' represent investment, and their compensation is based mainly on the fact that they take on risk by allocating money... Compensation is based on supply (which itself is based on many factors, including education and demographics), demand (number of businesses in a market, demand for the products created by those businesses), and risk. Assuming no government meddling, an efficient market will properly price workers wages. What Greenspan is suggesting makes sense from a macro perspective, but of course on a personal, human level, isn't ideal for many people.

afterburner 13y ago
Banks, not bankers.
dvanduzer 13y ago
I don't understand why you put 'bankers' in 'quotes' like that. Saying bankers represent investment isn't exactly non-controversial.[0] Perhaps that's exactly what you're saying? [0] https://en.wikipedia.org/wiki/The_aftermath_of_the_repeal_of_the_Glass–Steagall_Act https://en.wikipedia.org/wiki/The_aftermath_of_the_repeal_of...
- chc 13y ago
  I think he quoted it because that was the word used to denote the class of people in the post he was replying to.
- gaius 13y ago
  A normal banker doesn't take any risk himself, he risks money belonging to others. Back in the old days, Goldman Sachs (for example) was owned by the partners, who were risking their own capital in every transaction. That setup is very rare these days. An investment banker should be paid like an accountant or a lawyer, well enough by most anyone's standards, but in line with what the work actually is.
  - waps 13y ago
    Why not tell the rest of the story ? Then a crisis happened, where a lot of banker's decisions turned out wrong due to factors that cannot reasonably be said to be the fault of those bankers. A lot of people, who were told beforehand that their money was indeed at risk in trade for that "interest" demanded the government step in and guarantee the deposits (which the government didn't do for them, but implemented for all savings from then on). This meant that anytime a sizable bank would topple, it would cost the government massive amounts of money, which meant the government became complicit, by necessity more than by bribes, in making banks grow and bailing them out if "risk" strikes. Which is what you're complaining about. BTW: the "risking your own capital" demand also meant that only the wealthiest of people and their immediate families could reasonably get jobs at banks, for obvious reasons. And I'm certainly not unhappy that particular tidbit ended.
    - gaius 13y ago
      But that's not true and that's easy to prove: back in the day, not every employee of GS was a partner! Just like not every employee of a law firm or an accountancy is a partner. There are plenty of other industries too where owning something needs a massive amount of capital, and risks large amounts of capital - factories, airlines, even farms - and yet people get jobs all the time.
    - 13y ago
briancaw2 13y ago
Greenspan is saying that STEM workers shouldn't make more than other workers. The argument isn't for increasing worker supply from external sources in general, it's for targeting STEM for more visas. It's known that students find STEM harder in school and STEM jobs are widely considered more difficult than other jobs, thus earning their wage difference. Like it's been said by others, this will result in less STEM degrees domestically, the exact opposite of how this problem should be solved.
- eli_gottlieb 13y ago
  You and I disagree with Greenspan on the basic "should" here. The point of neoliberal policy-making, remember, is to maximize capital growth and minimize inflation by suppressing the price of labor.
deleted 13y ago
[deleted]
praptak 13y ago
> their compensation is based mainly on the fact that they take on risk by allocating money... I can't believe anybody can say that with a straight face, not after the bailouts.
- Mikeb85 13y ago
  That's your government's failing, not the market's.... Real capitalism would have been letting them fail, but I don't know if Americans would have the stomach for what would have happened afterward...
gilgoomesh 13y ago
From an information theorist's perspective, bankers don't create anything, they just skim a percentage off of other people's transactions – they're a drain on the system. STEM workers create assets from nothing – the best STEM workers create billion dollar (or more) industries from nothing. Bankers just move existing assets around – they're fat that needs to be trimmed.
- waps 13y ago
  From an economic perspective, what bankers create is correct allocation of economic resources. I doubt that that is how banks create their money these days though.
dragonwriter 13y ago
> Assuming no government meddling, an efficient market will properly price workers wages. The assumption is unnecessary, since an "efficient market" by definition includes no government intervention other than that which increases efficiency (e.g., by effectively internalizing externalities.)