Tuesday, November 21, 2023

Would you give up some prestige to get paid more money?

See Dream Job or Higher Salary? For Today’s Workers, the Answer Is Changing: The days of taking a hot job with bragging rights are fading in the face of inflation and high interest rates by Callum Borchers of The WSJ. Excerpts:

"In the tug of war between love and money, cash has more pull right now. From accounting firms to medical research labs, businesses and organizations that have traditionally wooed candidates with bragging rights instead of the biggest bucks are losing out on talent. 

Inflation, housing costs, student debt and rising interest rates have many workers saying the idea of a prestige discount—accepting less money for a job that is highly regarded—is simply impractical."

"Surveys by Gallup and the Pew Research Center show that compensation, always a key piece of career decisions, has become an even higher priority for job seekers in recent years. Many workers don’t define themselves by their job titles the way they did before the pandemic, so they don’t mind working for no-name companies if those employers pay up so they can have fuller personal lives. 

One college professor who took a pay cut to jump from a state school to Yale several years ago told me he’s not so sure he’d make the same decision today. Others add that prestigious jobs often demand long hours or time away from family, which can make even six-figure salaries feel discounted. A former Google engineer described feeling like he got a raise when he made a lateral move to a venture-backed startup because he earned more on an hourly basis.

It’s smart to look with critical eyes at any role that doesn’t maximize your worth, says Betsey Stevenson, former chief economist of the U.S. Labor Department.

“It only makes sense to take a pay cut for a prestigious job if you think it’s going to ultimately pay you more down the line by facilitating a faster climb up the ladder,” says Stevenson, now a professor of public policy and economics at the University of Michigan."

"Churches and synagogues are warning of a looming clergy shortage. Being revered as a reverend or rabbi isn’t drawing people to divine work like it used to."

"The honor of public service isn’t the draw that it once was, so the federal government is dangling better pay and benefits, such as $20,000 signing bonuses for some hard-to-fill jobs with U.S. Customs and Border Protection." 

The clergy issue sure sounds like what we call a shortage. The price (in this case the salary or the price of labor) might be below where supply and demand intersect. So quantity supplied is less than quantity demanded. A shortage.

This article reminds me a a post from 2011. See Would You Pay $250,000 To Get Your Friends' Respect? It was about how much debt law school students were in.

But here is something interesting about one student, who is now $250,000 in debt:

"Mr. Wallerstein, for his part, is not complaining. Once you throw in the intangibles of having a J.D., he says, he is one of law schools' satisfied customers.

"It's a prestige thing," he says. "I'm an attorney. All of my friends see me as a person they look up to. They understand I'm in a lot of debt, but I've done something they feel they could never do and the respect and admiration is important.""

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