With the latest unemployment data showing 85,000 more people unemployed, it's no wonder Wall Street bonuses are being met with disdain. But Wall Street isn't the only opportunity to find lucrative employment and make more money than some people think is fair. The Bureau of Labor Statistics' National Occupational Employment and Wage estimates shows the mean annual wages for over 800 occupations. Parsing through the data shows wages for many occupational categories that a lot of people would think provide too little bang for those serious bucks.
A Matter of Perspective?
Of course, what's fair to one person won't be fair to another. But if the definition of overpaid means that there are others that would do the same quality work for lower wages, then there is a criteria for judging overpaid occupations.
Also, it should be noted that many of these jobs are referred to as "credence goods". A credence good (or service) is an economics term for a good in which the value is difficult or impossible for the consumer to determine. This holds true even after consuming the good or service. And many of them take roots in another economic concept called Veblen goods. This is a good or service where one's preference for buying increases with price. For example, no wants to hire the cheap brain surgeon when going under the knife.
Applying these concepts to employment and the debate about the fair value of one's work, the following occupations could be considered overpaid.
- Chief Executive Officer ($160,440) – Executive pay creates harsh feelings in many people. When the leader of a company does his or her job really well, most people feel they deserve significant amounts of money, especially if it comes in the form of stock that needs to rise in value for it to pay off. But the dismal performance of most CEOs and their stunning pay packages define the argument for pay-for-performance. It seems that in many cases, CEOs get paid regardless of performance.
Could someone else have done the work just as well? One would think that most senior executives would be able to step up a notch, or at least think they can. Can you really tell how well a CEO has done, even a year later? How many CEOs have had huge pay days only to have the firm go bankrupt the next year? Most critics would agree: there are lots of overpaid people here. (Learn more about CEOs in The Basics Of Corporate Structure.)
- Lawyer ($124,750) – Much like CEOs, a great lawyer commands a great wage. However, even mediocre lawyers still command high wages. One might think it's related to the barriers to entry of high-priced law schools and passing the bar, but the supply of lawyers seems to be plentiful. Lawyers are an example of a Veblen good. A cheap lawyer is perceived to be inferior, so even inferior lawyers charge high prices.
- Political Scientist ($99,320) – This occupation includes those that conduct polls and analyze election results. So, this profession is mostly funded by campaign contributions and hired by politicians trying to win elections, or by special interest groups promoting a ballot measure. While those involved in the campaigns themselves probably feel that a good political scientist is hard to find and worth every penny, the more casual follower of politics could come to the conclusion that a good political scientist has yet to be found - given the quality of politicians that they get elected.
- Athlete ($79,460) – While this number may look small compared to the superstars' salaries reported in the paper, it's still quite a bit considering those who are willing and able to replace the average athlete. Those who can succeed at the very top level generate significant income for the business and deserve to get paid more because of that.
A good example of this is Tiger Woods. When he is in a tournament, there are 50% more television viewers than when he is not. He is the show and gets paid handsomely for it; however, one could make an argument that the rest of the field is overpaid and getting a free ride on his coat tails. However, in light of certain recent events in Woods' personal life, some of that might change.
- Economist ($90,830) – It was once said that you could put all of the economists in the world end to end and still not reach a conclusion. If they don't provide useful information upon which decisions can be based, why do they make so much money? Isn't there someone willing to provide a best guess about what's going to happen in the economy for less money? And even when they do get it right, how do we know that it wasn't just luck? (Learn more in Why Can't Economists Agree?)
To turn this around and benefit from it, consider your own career and think of where you can provide something where the results can't be directly measured - even after you have provided them - and where it's generally thought that high prices mean better quality. Then you too can find an overpaid job!