Two items in the paper today have me thinking again about the jobs and people get paid for the jobs they do.
Jamie Dimon, CEO at bailed out (to the tune of $12 billion) and fined ($20 billion on the “cost of doing business” line?) JPMorgan is getting a raise this year. Last year his pay package topped $11.5 million. This year it will be more. Presumably he earned it.
Between fines and bailouts there’s a lot of sloppy money on Dimon’s watch. Let’s not forget what happened when the big banks failed — under the management of the rare talent of guys like Dimon — and cost the economy billions, maybe trillions, more. When you start thinking about it, take away the expensive suits and you might want this guy to manage your local book club where we presume he might do much less damage. But the logic of work and reword doesn’t fit that reasoning today. Mostly because it is a myth that guys like Dimon have in anyway set themselves apart in a manner to deserve the advantages that they get.
Why does this happen? Paul Krugman has part of the answer in the same paper. He writes about the ideal of full-employment and more equitable distribution of national wealth. We fail to reach that ideal and it is largely a political matter. Politics — opinions, really — trump the economics and reality of our situation.
Never mind whether our economy and our society as a whole would be better all around if we had full employment and more equitable distribution of income, to take shots at people like Jamie Dimon, for example, is a shot fired in battle of class warfare. The myth of equal opportunity versus the realities of inequality trump the facts.
Back to Dimon. Judge him as you might a manager of smaller enterprise, let’s say a manager of a sales program or retail store. If you’re operation lost billions to bad operations and fines, what do you think the outcome would be?
We live in an era were jobs are cut routinely — often outsourced — because of competition in the labor market. Many people vying for few jobs and doing so in a global market. The leaders of large corporations — the people responsible for many of these cuts — cry crocodile tears explaining that the very survival of the enterprise depends on being globally competitive. Fair enough.
But sitting on record profits and cash reserves while giving oneself a raise seems a little disingenuous, does it not? Let’s keep in mind that some of these people (cf. ALEC) support cuts to public employees. Why shouldn’t public employees face cuts when the private sector job market is so tight, they argue? Again, let’s forget the macroeconomic wisdom of keeping wages strong and ask the question: Why then shouldn’t compensation at the top reflect the market as well?
Oh, yeah…the market is doing great. (Record profits, remember?) Ergo, they deserve their rewards.
In the end it is a boondoggle. Does anyone really think a man who oversaw the train wreck at JPMorgan is worth millions and millions of dollars in compensation? What is his unique talent? Selling himself to the board, perhaps? If it is — and it probably is — you need to get a chance to sell yourself, you need to get in front of the decision makers. That’s Jamie Dimon’s so-called “talent.” It is luck.
I am willing to bet people exist in the world with all the smarts and abilities of Jamie Dimon and more who would be willing to steer an enterprise like JPMorgan in to responsible prosperity for a lot less than $11 million plus a year. I would be willing to bet that you might find someone to do it for half as much, maybe a tenth. Why don’t we outsource the position and see what we get?
It is ludicrous to think that the only people capable of doing Dimon does come from the fortunate fringes of our society. Just as there are many people for every job that requires someone push a button, there are many people for every job that requires someone who pushes paper, I don’t care how fancy the office.