Problems with Authority, Part III

23. March 2012 here now 4
Measurement, and pay, of course, matter very much. I’m not arguing for free work or unmeasured pay… Dan Pink the behavioral economist knows that paying people crap makes them work crappily. The people who perform best at work seem to be those who feel safe and comfortable. But let’s stick with the psych test, the people doing worse on a cognitive task when promised lots of money (these experiments, by the way, have been performed across ages and continents and cultures)—what happens in their brains? I imagine money puts pressure on them. It distracts them from the task at hand. The big cash prize takes ownership of the task away from them: “I’m not doing this for me, I’m doing it for that guy holding the money bag.” Now, beyond politics, imagine for a moment the psych test happening at the olympian heights of our now staggeringly unequal economy. Imagine a corner office with a view of the Hudson. Imagine that suddenly you’re being paid vast amounts of money—the kind of money that translates into raw power. You will get that raw power if you, in turn, bring more money into your investment bank. Do you feel… ownership of your work? Purpose? Are you thinking about your responsibility towards your clients, never mind your responsibility to the global economy? Or are you drooling and seeing dollar signs, like in an old school cartoon? You work in a sector that just recently brought the global economy to its knees and got bailed out by the American taxpayer. In 2008, the commercial credit markets froze, the TED spread spiked, the entire shadow banking system imploded, Lehmann was too weak to survive (pretend you have a profound sense of how scary all this financial mumbo jumbo is). But then the good old government bought up a bunch of toxic assets. You torqued the balance sheets. And somehow… you… you have come through armaggedon. You’re still in the game. How do you feel? You feel like a cowboy who just survived an Indian raid, that’s how. The idea of a meritocracy is meaningless when the people being paid the absolute most fail spectacularly… and suffer no real consequences. No meaningful change has come since the financial crisis. We have been feeding the sharks. They got really, really big. When they got vicious, we put one of them in Sea World, bonked the others on the nose and said “Bad sharks!” And then we led them all to a new surfing beach. Now some of us are acting surprised that they still have a taste for human blood. Goldman Sachs had $45 billion in revenue in 2009. That guy who just resigned from there, ostensibly out of moral outrage, said he was shocked—shocked—that the piles of money pouring into Goldman Sachs seem to have made people focus on… making even bigger piles of money. Are you shocked? The guy who just resigned (I find him self-serving, I’d rather link to the parody of his resignation letter about Darth Vader leaving The Empire) imagined that something had changed. In the golden days of yore, he said, the culture at Goldman Sachs was people-focused. Client-focused. But would the global economy not have tanked, would millions of people not have been pushed into foreclosure and unemployment, would the American taxpayer not have bailed out the one percent if some extraordinarily rich men at Goldman Sachs had… given better customer service? The head of Goldmans Sachs said in 2010 that he believed they were doing “God’s work.” I suspect the people there probably do feel a sense of  intensity, like mercenaries in the army of a devout Viking.  But that blood hunger is not the same as a true sense of purpose, and we have to stop imagining that by letting our society reward them so handsomely, we are getting anything but a bunch of very strong, very fast, great whites. I know many people who could make more money doing something they love less. Do you know any teachers? Then so do you. I know dozens of lawyers who could make three or four times what they make at corporate jobs.  They chose their careers and life paths for reasons entirely separate from compensation. They work incredibly long hours at grueling, complicated, demanding jobs in the name of social justice. Working for a higher cause, for them, is valuable in a way that can’t be quantified or measured. It gets them out of bed on a day-to-day basis and gives their life meaning. Most of them are now, and always have been, exquisitely aware of what their CVs would get them, in dollar terms, at a white-shoe firm. It’s insulting to them and their passion and commitment to imagine that the difference in pay reflects a difference in merit. This is not to say that if you do something well, and were paid well for it, that you don’t deserve that money. It’s just that, the reason you did well at that thing you do? Probably not the fact of the carrot. Independence, autonomy, safety. Money can bring us all these things, in our society. Many more people deserve those things than have them. But we do our best work not when the prize is big but when we believe that the work itself is valuable, important, true.  Big money sometimes correlates with better work. But money can’t buy you love, and it turns out, big money can’t buy you people who are creative, passionate, ethical and good at their jobs. The idea that it does is poisoning us. Case in point: At Cal State Fullerton, they’re freezing enrollment. The Cal State system is being slowly dismantled. As one of the trustees put it, with these cuts “We dismiss the aspirations and the accomplishments of tens of thousands of young people and their families who we’ve been exhorting to go to college. They don’t go other places, they just don’t go.” The enrollment freeze comes with a $750 million funding cut for the next academic year. “Administrators are looking at eliminating athletics programs, limiting student loans and library acquisitions, deferring maintenance projects, as well as continuing a hiring freeze and streamlining operations,” said Executive Vice Chancellor Benjamin Quillian. Meanwhile, the trustees approved a 10% pay raise for the president. He will now make more than $300,000 base salary. That’s before a $60,000 “house allowance” and a $12,000 “car allowance.” The justification is, as always: “CSU administrators say the increases are necessary to attract and retain top executive talent.” Here is a picture of the administrator who would supposedly fly the coop without that investment banking-level pay. Without this man, supposedly, Cal Fullerton would somehow suffer even more than it is already suffering. He’s a career administrator, with a track record of… working as an administrator. He went to good schools. On the surface, he looks like a decent man. And the size of his reward almost guarantees that he will focus on that reward at the expense of all else.  The public university system in California is a storied institution. It took decades to build it into the best public university system in the country. And let’s be clear: It was built that way before the explosion in administrative pay. High administrative pay did not build this house. The Cal States and the community colleges are feeders for the UCs, and as such, they represent one of the most democratic, truly meritocratic second chances in the world. Thousands of kids go through that system to be the first kids in their families to go to college, to make real the increasingly distant promise that social mobility in America sometimes, in fact, can go up. Anyone who understands that promise, anyone truly committed to the UC system and the original promise of Clark Kerr’s Master Plan, anyone working in any way for a sense of higher purpose would refuse that pay raise. The only ethical choice for the president of Cal State Fullerton is to stand up and offer to take a third of his salary. He might save a couple of professors’ jobs, keep a few classes, let a few hundred kids graduate instead of dropping out because they can’t get the classes they need in time. “Top executive talent”? What can that possibly mean? If the president of Cal State Fullerton would leave because someone else would pay $350,000, then don’t you see? Good riddance. Morishita could take a third of his salary and the “housing allowance” and still make a very good living. The only man who should have that job is a man (or woman) who would refuse a pay raise under these circumstances. The only man who should have that job should demand lower pay. He should be out in public giving speeches about his democratic vision, fighting tooth and nail for his students, and when he’s spending long hours at his desk tearing his hair out to prevent the enrollment freeze, he should have his door open, so some kid can walk in and say, “Hey man, I had such great teachers here at Fullerton, and now I’m transferring to UC Berkeley!! My father is a janitor and I’m going to go graduate from one of the best universities in the world! Thank you!” And for the right man for this job, that one kid would be goddam pay enough. Here are some graphs, based on stats from the Congressional Budget Office:

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