Tuesday, December 16, 2008

Goldman Sachs Slashes Pay by 45%

Now, that's a serious pay cut.

One could argue that it is a result of weak performance, prevailing conditions, poor decisions, etc.

I personally believe the high-paying financial sector jobs are now seeing what the manufacturing jobs have seen for the past decade.

To quote what is in the article:
“We think the industry is in the process of repricing its labor pool,” Guy Moszkowski, an analyst at Merrill Lynch & Co. in New York, wrote in a Dec. 3 note to investors. “We think it’s reasonable to expect this given the very weak earnings and outlook for next year and the fact that the labor environment is inhospitable.”

Globalization's premise of moving labor and capital to areas where the costs are low will have an impact. It is unsustainable to have such huge disparities between nations. There will be a "great levelling". Or as Tom calls it: "The World is Flat".

I wonder if this is the beginning of the trend where pay scales & quality of life in industrialized nations will drop sequentially.

Until of course, there is a massive investment in new technologies and innovations that breed local jobs. Local jobs that are difficult to be outsourced. Local jobs that are attract people community college graduates and PhDs from Ivy league universities, alike.

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