Tuesday, January 27, 2009
Reading Material: The Cost of Talent
In 1993, Derek Bok, former Harvard University President, wrote a book titled, The Cost of Talent. This book takes an interesting look at how Executives and Professionals are paid, and it looks at how these differences in compensation affect the overall economy. The first paragraph, The Role of Compensation, analyzes Adam Smith's justification for highly compensated professionals - especially lawyers, doctors, and business professionals. As we begin to ponder the many issues with our economy, compensation, with respect to talent, should be at the foundation of the debate.
Mr. Bok pointed out the impact of compensatory variances on the supply chain for educational professionals. It doesn't take a finance professor to understand the return on investment for education. Why spend thousands of dollars on a noble and honorable liberal arts degree, when you can spend a little more to live a more lucrative and stable life? I remember graduating from college and praying six months later to land a $6.50/hour job. It was a very humbling moment in my life, and for many in this country. It's a question of incentive. More than many of the topics on the table today, the issue of talent is the key to recovery in this economy.
What would happen if teachers were paid like pro athletes? What would happen if business executives were paid like engineers? How would this nation function? These are questions that you will more than likely ask while you are reading this book.
Take a look at the public copy, and let me know what you think.