From an email from Kevin Lewis, at Berkeley:
Relative Salary of U.S. Senators and Law Firm Partners
Year ........Senatory ...Mean law firm partner
1954.......... 12,500 .......10,258
1976 ..........44,600 .......55,000
2002 .........150,000 .......593,800
(nominal dollars; source: Journal of Economic Perspectives)
What does it all mean? I would say that it means it is better to profit from rent-seeking in terms of $$ than in terms of votes, if you like dollars. So rent-seekers who love money become law partners, and rent-seekers who love power sort into politics. But neither senators nor law firm partners get fired very often. The system works for everyone except the citizens...
4 comments:
i'd say it means that back in 1976 senators didn't get very much in bribes and payoffs and swag, but by 2002 they were getting around $400,000 per year in unreported income.
Now, THAT had not occured to me.
I had believed they were taking it in kind.
But, sure, William Jefferson (Clinton?) was certainly not reporting that cold cash in his freezer.
Good ON ya!
I haven't read the article (yet), but the categories are problematic:
1) The term "partner" in a law firm does not mean what it used to mean, i.e. an equity partner. Therefore, many equity partners who are not as "sucessful" are actually fired, or demoted, to the position of a "salary partner" or "of counsel" status. Of course, the former is not advertised or clarfied by firms. But the dirty little secret is that many "large" firms now require "junior" parners to be "salary partners" for 5-10 years. Then they MAY become equity partners eventually, if they produce significant revenue for the firms. And if this revenue ever drops below expectations, then its back to salary partner. Of course the effect of this is that law firms only report average ppp for equity partners, which inflates the number they report. (note, I haven't seen any data on salary partner income compared to equity, but its thought to be around 200-300K, or less that half of equity partner income).
2) A significant number of Senators (and/ or spouses) are already milliionaires. Their salary is often a rounding error in their yearly "net worth" disclosure. So they may be rent seeking for power, but its usually because they already have $.
Oh, not to worry!
http://www.marginalrevolution.com/marginalrevolution/2004/02/good_news_our_s.html
Gangsta. Hustla. Still found time to kiss my mother.
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