Are Bankers Overpaid?

Bankers are commonly given three characteristics; they are almost always described as being driven solely by money, as being immoral or unnecessarily brazen with the risks they take. Those who were adversely affected by the recession see no reason why these fortunate few are paid so handsomely. Many see bankers as the reason for the economic meltdown and many hold them solely responsible. The issue of the amount they are paid and the huge bonuses they receive is a highly controversial topic. The average bonus paid to a worker in the City in 2011 was £12,000, a figure seven times greater than the national average. Critics argue that they are over-paid. Furthermore, both right and left wing newspapers in Britain often run opinion pieces and letters condemning the huge bonuses bankers receive. The average banker in a hedge fund is paid £100,000 in yet the average nurse is paid £31,000 (this is including overtime). Statistics like these make many question why bankers receive so much money because they are not the ones taking care of the ill and they are not working eight hour shifts for a next to nothing salary.

It is argued that bankers deserve their salary because bankers do not work 8-hours a day but instead works well above 12 hours a day. Bankers are famous workaholics that have very little time for family or themselves. True, bankers, in general, earn six figure salaries and bonuses one can only dream of, but bankers are constantly under huge amounts of stress and the suicide rate for investment bankers are second to none. One example is the multi-billionaire banker Adolf Merckle, an extremely wealthy and privileged man who committed suicide due to the severe stress he was under after losing money on the stock market. It is clear in this case that no amount of money can subsidise the stress and pressure that comes with being a banker. For almost all investment bankers it is a Faustian pact; Shaun Springer (chief executive of Napier Scott) stated “You give your life until you’re 40 and I’ll make you a millionaire there-after” – one must question how appealing being a millionaire is, when you spend the best years of your life, ironically with no life at all. It is easy to assume that bankers have an easy life, but these glamorous lifestyles do not come without an immense amount of hard work and stress. In an increasingly ‘capitalist’ world, governments are ever more reliant on bankers to manage the economy and make sure that it thrives. However, bankers are often the scapegoat for economic troubles, yet they are never given the praise and plaudits they deserve when the economy is thriving. Banker’s bonuses are representative of what they make for their companies (roughly around 10%), so it is not as though they receive the money for no good reason. Finally, the high salary is the reason why many very well-qualified, academic over-achievers join the City, rather than going into businesses or creating their own companies; the salary attracts the very best and in an industry so volatile you need the best minds.

Bankers share a common trait; they are ultimately motivated by their jobs for one reason or another, be it money or the satisfaction that comes with closing deals worth millions of pounds. It is clear only those who can cope with such a stressful and highly testing profession need to be paid well, especially when they are making so much money for their respective employers.

In short, bankers are if anything underpaid, the sacrifices they make in order to become successful within their respective field is unimaginable. Now compare the average wage of a banker (£100,000) to the amount of hours he/she spends working and the sacrifices they make for a thankless task, the only form of appreciation comes in the form of the salary they receive and rightly so. The average banker has a working life span of around 15 years, to only work for 15 years means that you HAVE to make a large amount of money to support yourself on. Ultimately, one must question whether or not they would want to sacrifice the best years of their lives for any amount of money and if it is worth the £100,000 a year.

Contributed by Namatoulah Bahram

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