Wednesday, April 15, 2009

Should there be limits on pay

I'm on on one of my pet peeves again.

I just read this article:
http://www.msnbc.msn.com/id/30226310/

which discusses Captains Sullenberger and Phillips.

It talks about a "triumph of credentialed, licensed leadership."

and

"They were brave, capable, shrewd and deeply knowledgeable. They saved, respectively, 155 passengers on a plane that landed in the Hudson River last January, and 19 American shipmates trapped by pirates on a cargo vessel last week in the dangerous waters off the coast of East Africa."
.
"they had prepared all of their lives for their fateful moments of crisis in the air and on the sea."
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"Sullenberger had an astonishing academic and military record at the Air Force Academy and had earned two graduate degrees in addition to logging 19,000 hours of flight time. He had a lifelong interest in gliders, and while a giant Airbus is by no means a glider, he in effect glided his passengers to safety."
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"Phillips was regarded as both gifted and studious."
.
Their successes, miraculous as they were, were not accidents. These were real leaders.

and so forth.

According to the Air Line Pilots Association, their average major* airline member Captain is 50 years old, with 18 years seniority and makes $182,000 a year. A non-major airline Captain is 41 years old with 10 years of seniority and makes $70,000 a year.

The average ALPA First Officer member at a major airline is 43 years old with 10 years of seniority and makes $121,000 per year, while an ALPA non major First Officer is age 35 with 3 years of service and makes $33,000.
Source:
http://www.ask.com/bar?q=how+much+money+do+airline+pilots+make&page=1&qsrc=2352&ab=1&u=http%3A%2F%2Fwww.flightlevel350.com%2Fforum%2Findex.php%3Fshowtopic%3D3227

So *maybe* Sullenberger makes 200K

The wages for captains are highest on the largest ships. In 2004 the median wage for captains was $24.20 per hour. The most experienced captains—captains of large container ships, oil tankers, or passenger ships—earned more than $100,000 per year.
Source:http://www.ask.com/bar?q=salary+of+sea+captains&page=1&qsrc=2417&ab=1&u=http%3A%2F%2Fcareers.stateuniversity.com%2Fpages%2F821%2FMerchant-Marine-Captain.html

So perhaps Phillips makes 125-150K

If that is enough for them why do we have to Wall st. pay bankers, CEO's (and others) orders of magnitude more. Can *anyone* say with a straight face that they are worth more than those two?

In my opinion, the people making the really big money in our society (and maybe throughout history) are doing so via taking advantage of some one or some thing. Monopoly power (Microsoft). Wall St. bankers function as gatekeepers to the capital markets and have enormous oligopoly power . "Customers" typically come to doctors and lawyers under duress, hat in hand. These professions seem to have no problem taking advantage of the situation. In America we do not have much of a history of financial restraint.

I wonder if society will become ever more polarized unless we put some limits on compensation on those who have power over their customers. I know it sounds crazy to suggest that there should be limits on pay for doctors or lawyers, CEO's etc. but what's the alternative if they don't show restraint. And as I said above, how can *anyone* claim with a straight face they are worth more than Sullenberger or Phillips?

Lets say I'm in the wilderness and encounter a person dying of thirst and I have excess water. Is it ok for me to demand a good chunk of the man's entire net worth before I give him a sip? He will of course agree to pay whatever I ask. The man is under duress. The medical and legal professions both regularly encounter "customers" who are under duress. This puts them in a position of power over the customer. Could this perhaps be a reason why medical costs have risen so much in recent decades? This is a tough problem.

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