The NBA Rookie Pay Scale on Wall Street?
Michael Eisenberg writes on Seeking Alpha:
President Obama's administration could learn a lot about salary caps from the NBA and NFL and in the process can help America turn on the innovation engine that America really needs to climb out of this deep recession. You see, the place to enforce Wall Street salary caps is not on executives but on fresh college grads and MBAs like the NFL does on rookies. This helps spread the talent wealth in the NFL and NBA in a way that it is not currently allocated in American industry.
The fat paychecks that Wall Street was and is able to pay the best and the brightest college grads from MBAs, to mathematics majors and engineers has pushed that brainpower from technological, business and medical innovation to financial engineering. Analyst salaries at Goldman Sachs (GS) and Morgan Stanley (MS) are able to attract the best and the brightest away from pursuing engineering or energy jobs, where the brainpower could develop alternative energy sources, more sustainable agriculture and faster telecommunications and not just the next complex derivative. Imagine if all of America's best brains and management talent were focused on innovation and not financial engineering or lawyering.
Taking money from recent college grads, while leaving CEO pay unregulated in an age of taxpayer-supported bailouts? Even if that really would have some benefits, I don't think it's going to address the political urge to teach the richest employees of money-losing companies a lesson.
And, doesn't it feel exploitative in the NBA? Chris Paul, LeBron James, Dwyane Wade -- they have done some of the best and most productive work of anyone in sports over the last few years, much of the time while earning far below their market value. I see the whole thing as a demonstration of the League's negotiating savvy, but not a model to replicate elsewhere.
(Thanks for the link, Randy.)