America is still fascinated with “The Price is Right.” We watch HGTV to discover the right price of real estate. For many generations economists have searched for the right price, the just price.
How much rent should the landlord be paid by the farmer of his land? How much is a loaf of bread worth? The proper compensation for a farm worker is the subject of a biblical parable. These, in their many forms, are perennial questions.
Therefore it is no wonder that today we ask how much is an outstanding athlete worth? Kobe Bryant, Alex Rodriguez, Andrew Luck — are they worth what their clubs are willing to pay them? How about teachers, administrators, basketball coaches — are they paid appropriately?
What is the right compensation for a wholesaler or a retailer who operates between the manufacturer and the consumer?
We have a suspicion of middle-men, particularly when the commodity in question is money. Hence, we easily question the rewards paid to bankers, brokers, and bond sellers. Our society still operates with the ignorance and prejudice of the middle ages against money and services.
This biased thinking refuses to recognize the contributions to our lives generated by activities beyond agriculture, mining, and manufacturing. Even construction has to battle for recognition and respect.
In economic development, if our efforts do not result in tangible products that can be shipped, they are not called “goods.” The idea is not accepted that a community could benefit from another restaurant, barber shop, electrician, accountant or attorney. Just look at what types of firms get property tax abatements.
Contemporary thinking has people who trade money (modern money changers) painted as parasites. Wall Street types who invent new means to lower transactions costs are evil do-ers. The general public does not understand swapping risk, although that same public is easily enticed into betting on fantasy sports teams, Powerball numbers, and playing black-jack.
The extensive discontent with compensation for executives, particularly those in the financial services industry, is largely because we do not take the time to understand the function of money and the role of insurance. That is how we come to see other people’s rewards as “obscene” and “unnecessary.”
Economics has taught us that compensation is that sum necessary to bring forth the services of a worker of a given skill level. If you want an hour of work from an expert plumber, you will pay more than you would for an hour from a novice plumber. How much should you pay for someone’s advice on how to manage your money? Should you pay on the basis of past performance for advice to someone else or defer payment for two years until you see how successful his/her advice proved to be for you?
Outrage is natural when so many of us have seen the values of our homes decrease, our jobs disappear, and our pensions erode. We want to blame someone. We don’t know what a hedge fund is, so a hedge fund manager is a good target.
The truth is that we all contributed to the housing bubble. It was not solely the builders, the bankers, the mortgage brokers, or the federal housing agencies. It was generations of believing the American dream could be realized best by universal home ownership and that wars could be pursued without costs to our society.
Morton Marcus is an independent economist, writer and speaker formerly with the IU Kelley School of Business.
Business
EYE ON THE PIE: Compensation levels did not cause the recession
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This column is not intended to confuse you, but to share the difficulty of making flat statements about a complicated matter. Be patient and, maybe, together we can make sense out of what appears to be chaos.
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Chamber seminar on ‘Protecting Your Brand Online’
Reading online reviews and doing research is routine for many consumers before making a purchase. That means false or negative reviews can have a major impact on a business’ bottom line, often requiring swift action to minimize the damage. The Indiana Chamber of Commerce is hosting a seminar designed to help companies combat this growing issue and to help protect their overall online reputation.
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Social Security: Father’s Day advice: The right kind of fishing
This Father’s Day, you may be inclined to spend some quality time with Dad, maybe take him out camping or fishing. But try to make sure that nobody else tries to “phish” with you or your father.
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Newsmaker: June 16, 2013
Watermark Residential, a wholly owned Thompson Thrift subsidiary, has been named to Multifamily Executive magazine’s 2013 Top 50 list of “Builders,” placing 45th.
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Company invests in Indiana State theater
The Indiana State University Foundation recently announced that Bison Financial Group has made a charitable gift in support of Crossroads Repertory Theater.
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AAA plans Member Appreciation Week activities
AAA Hoosier Motor Club will conduct Member Appreciation Week festivities in celebration of AAA members June 17-22 at all branches.
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On the move: June 16, 2013
Brittany Michaels has been appointed as the community connections coordinator for the Vigo County Public Library.
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Secretary of State office to implement technology upgrades
Secretary of State Connie Lawson announced technology upgrades to her office’s customer services, including an online tool to allow Hoosier businesses to receive email notices when it is time to file business reports.
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Business Cents: Interview process key to attracting and retaining skilled, talented workers
As our economy continues to grow, there are challenges with identifying a skilled and talented workforce in the Wabash Valley.
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UAP Clinic announces new CEO
Union Associated Physicians Clinic (UAP Clinic) has announced the appointment of Mindy Smith as its chief executive officer.
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ISU center helps prepare grads for job market
Indiana State University is launching a comprehensive skills training program to certify the skills its graduates have for potential employers.
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Eye on the pie: Growth, compensation just as important as jobs themselves
When you come down to it, having a job isn’t enough to make it in modern America.
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Sycamore Insurance Associates moves to familiar Ohio Street location
A ribbon cutting ceremony on May 30 marked Sycamore Insurance Associates LLC’s move “back home” to 999 Ohio St., the location of the former Sycamore Agency, Inc.
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On the move: June 9, 2013
The Maple Center for Integrative Health announces the addition of licensed massage therapist Nancy Humphries to the clinical staff. She received her training from the Body Therapy Institute in Siler City, N.C.
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Briefly: June 9, 2013
Scotts Place, formerly Old Gringos, staged a grand opening on Thursday in Marshall, with a Marshall Chamber of Commerce Ribbon Cutting ceremony.
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WTHI-TV’s Mark Allen to retire
After nearly a half century of work in Indiana television, WTHI-TV’s longtime anchor, Mark Allen, will be retiring at the end of June.
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Chamber of Commerce: The final strategic initiative: Health and Wellness
Thank you to all who participated in the Long Range Planning Community Forum. The information gathered at that event is now being drafted into a final report. Once the report has been reviewed and approved by the Terre Haute Tomorrow Steering Committee, the real work starts. Action teams to address the major issues will be developed.
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Newsmakers: June 9, 2013
Scott’s Custom Colors recently won a contest through Enterprise which entailed a $5,000 donation to a charity important to them.
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Social Security: A reason to smile: Online account options
Next Saturday, June 15, is Smile Power Day. Smack dab in the middle of the month — in the middle of the year, in fact — is a holiday dedicated to the power of smiling.
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Major part of community’s image determined by the newspaper
To many Americans, Indiana is known for corn and the 500 race. These are views that are out-of-date and injurious to the state.
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Social Security: Social Security’s most popular baby names list
Jacob and Sophia are repeat champions as America’s most popular baby names for 2012.
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Hamilton Center part of trauma-informed community
Hamilton Center, Inc. is one of 37 behavioral health organizations across the United States that have been chosen to participate in the National Council for Community Behavioral Healthcare’s 2013 Trauma-informed Behavioral Healthcare Learning Community launched in April.
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Business Cents: Do you have a disaster plan in place for your business?
Due to recent events, I began to ponder just how many companies have a disaster plan in the case of a natural disaster, fire, etc.
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Newsmakers: June 2, 2013
The Indianapolis Business Journal recently named Watermark Residential as one of the 25 “Largest Indianapolis-Area Commercial Real Estate Developers.” Watermark was 4th on the list.
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Chamber seeks Community of Year nominations
The Indiana Chamber of Commerce is now accepting nominations for the 2013 Community of the Year Award.
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On the move: June 2, 2013
Deena Dodd, director of the Terre Haute-based Indiana Statewide Rural Health Network, was elected to the board of directors of the National Cooperative of Health Networks Association at the association’s annual meeting in New Orleans.
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Indiana farmers make rapid progress planting corn
WEST LAFAYETTE, Ind. — Indiana farmers who had worried that wet spring weather would prevent them from planting some of their corn fields have made rapid progress getting the state's top crop in the ground.
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Indiana State Fair to host job fair May 30
The Great Indiana State Fair is hoping to fill more than 500 hourly positions during a job fair from 3 to 7 p.m. May 30. Most of the jobs are temporary positions that cover the duration of the fair, which runs Aug. 2-18.
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NEWSMAKER: May 26, 2013
Distributors Terminal Corp. has earned 940 out of 1,000 points on AIB International’s annual food safety audit.
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SOCIAL SECURITY: Social Security honors all who serve
Every day of the year, Americans across the nation remember friends and family members who have served and sacrificed for their country.
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