[nilkn]

It may just be an artifact of the expanding population. It wasn't too long ago that many young people also harbored an idealism about working for big companies: go to college, get a nearly guaranteed job at a corporation, work there for 25-30 years, retire with a pension. But we all know that each of these steps is less guaranteed today than it was for the previous generation, sometimes significantly so. It's the same for academia.

As we cram more and more people into the same cities, the same companies, the same institutions of learning, they're going to experience some failures to scale. This is one of those failures. Academia becomes hyper-competitive. There aren't enough jobs. School becomes too expensive. Home prices outpace inflation and wage increases by a factor of three or more. The world is just much more competitive today, and it will continue to become even more competitive.

I sometimes think about my grandfather, now dead, who was a sales executive for a major clothing company in the 60s and 70s. He was making $50k in 1960. According to an inflation calculator, that would be nearly $400k today in base salary. It astounds me to reflect on this and the fact that he didn't even have a college degree. A similar job today would likely only go to a graduate of Harvard Business School, Wharton, or something similar. There were many others like him; you didn't have to be a business whiz extraordinaire to land such a job fifty years ago. You just had to be dedicated, hard-working, personable, and passionate, and everything else would follow. But the world was just not nearly as competitive back then.

[auctiontheory]

A similar job today would likely only go to a graduate of Harvard Business School, Wharton, or something similar.

Actually that's not true at all. High-performing salespeople in tech (and other industries) are extremely well-paid, and tend not to have fancy degrees.

Sales is still a career in which hustle and results are valued over book smarts, and there is no branch of a company that is "closer to revenue" than sales.

[nilkn]

Do you have any statistics to support this? And what do you mean by "extremely well-paid"? Anything under $400k doesn't count. Do you honestly think that's a typical salary these days for a salesperson in most industries? I assure you it is not. Most will never make that in their life. Also, how many of these extremely well-paid salespeople that you know didn't even attend college?

Finally, the upper ranks of many Silicon Valley companies like Facebook are filled to the brim with graduates of HBS and similar. There are lots of ex-McKinsey consultants in VP positions in the industry.

[auctiontheory]

The discussion you introduced was about salespeople - guys (mostly) who have a quota, who "carry a bag." It's a highly-paid profession in which Harvard and Wharton MBAs are underrepresented. Enterprise hardware and software salespeople can make well over $400K.

Whether or not the upper ranks of Facebook used to work for Rajat Gupta is hardly relevant to the question of how much salespeople make!

[nilkn]

Do you have any support for these figures? I've never heard of so many salespeople making so much money, and all salary reports I can find most certainly do not support your claim of this being even remotely typical.

[marknutter]

I don't think $50k back in 1960 bought you as much as $400k buys you today. Keep in mind how cheap many products and services have gotten due to automation, globalization, and technological advancements. Comparing cost of living in 1960 to cost of living in 2013 as if it's comparing apples to apples is a mistake.

[nilkn]

Well, have you watched Mad Men? That's approximately what $50k in 1960 got you. Most people would probably describe Donald Draper as wealthy in the show. He started at $45k in season one if I remember correctly.

[eli_gottlieb]

Given that GDP/capita has expanded plenty, I don't think that's a very good explanation. An economy in which actual growth can't keep up with population should see a falling GDP/capita.

Can we explain why we seem to see an increasingly competitive society despite there being more actual stuff to go around?

[nicholas73]

Easy guesses: 1) Most income growth went to top brackets 2) More women in the workforce meant both less power to workers as worker supply went up, and also two incomes bidding on homes/products.

[nilkn]

There has been a considerable amount of growth at the high end. But it's not being distributed down nearly as much as it once was. How many companies offer defined-benefit pension plans anymore, for instance? Nearly zero in the software industry; Garmin is the only one I know of that comes to mind. It's also well-known that executive compensation has skyrocketed while other wages have failed to keep up with inflation.

I don't think this is a complete explanation, though, and your point is a good one.

I also believe that the transition from one-income to dual-income households has had a pretty deleterious effect on the buying power of the average household. Rather than providing financial security, the second income led to a bidding war on homes, cars, and schools. It's a shocking fact that today's dual-income family has less disposable income after necessary bills than yesterday's single-income family.