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Status update

19 Mar 2021 By John Foley

Happiness is relative, and little makes that more apparent than the complaints of Goldman Sachs’ junior bankers. The 13 worker bees who created a leaked slide deck protesting “inhumane” conditions deserve some sympathy, even though they’re faring better than most Americans. Their self-pity is a worrying sign for Wall Street, though. It suggests the way wealthy people think about work is changing, or changing back.

Stressed-out bankers trapped in their apartments may have lost sight of their privilege. A Goldman investment-bank analyst gets around $88,000 a year according to Glassdoor, or around $18 an hour assuming a 100-hour workweek. That is more than double the federal minimum wage. And almost 50 million Americans work in occupations with an average wage of less than $15 an hour, according to Brookings. Besides, Goldman’s juniors can expect much higher pay in future, so the present value of their job beats most folks with equivalent salaries.

As tech bankers in Silicon Valley, the 13 complainants are shaping the future – but their desire for more leisure time is a glimpse of the past. For centuries, leisure, not white-collar toil, signaled status. Economist Thorstein Veblen wrote in 1899 that “conspicuous abstention from labor” was “the conventional mark of superior pecuniary achievement.” The way to show status was to be good at useless, time-consuming things like wine tasting, reading ancient Greek or hunting foxes.

By the 1980s, that changed, and long hours became a mark of status. The rise of rough-around-the-edges traders at Salomon Brothers and Drexel Burnham, where Goldman boss David Solomon worked in the 1980s, underscore Veblen’s point. One excuse for bank bosses’ lavish use of private jets today is that they’re constantly working. JPMorgan’s Jamie Dimon was back on the job weeks after an aortic dissection. Morgan Stanley boss James Gorman worked through his bout with Covid-19.

The pandemic might be the trigger for a reversion to the mean. Leisure may again become the sign of an enviable life for the privileged few. That will involve some trade-offs. After all, Goldman juniors were so busy in 2020 because the firm was awash with business, driving revenue up 22%. The median employee’s salary of $139,430 was slightly higher than the year before, according to a filing on Friday. Glum analysts may have inadvertently modeled an end to a four-decade bull market in white-collar graft.

 

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