h a l f b a k e r yRenovating the wheel
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It strikes me as something of a shame that in many jobs, the highest level of salary you attain comes towards the end of your career. At this point, you will hopefully have a decent house, your children will have left home, and there is relatively little to spend your money on apart from saving towards
retirement.
In contrast, when starting your career you are invariably paid less and are more likely to want to spend lots of money on buying a house, going on holiday with your mates, going out socialising, bringing up children etc.
This wouldn't work for all jobs, but for many companies and/or public sectors it would be good to have the option of having your life's salary in reverse. You would sign a contract tying you to that company for your entire career (various caveats and conditions would exist in case either party wanted to end the contract sooner than this) and you would start work on your forecasted leaving salary.
Every year, the forecast of how well you are likely to progress within the organisation would be reviewed and you salary adjusted to suit.
This would help young people to establish themselves in a position of financial security. On top of this pensions would no longer be a worry as a 7% contribution at the start would be much a much larger amount, gaining much more interest over a career span.
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This would work nicely with an idea that I was discussing in the office yesterday, whereby you can take retirement any time you like and then have to come back and work the extra years later on in order to make up your contribution payments. |
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This would work very well in a society where ignorance was cherished and experience was valueless. [marked–for-d-letion] bad (economic) science. |
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Can I start collecting my pension at birth? |
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Starting out with little money teaches us financial responsibility. Contractual obligations do not serve as motivation to improve. Performance-based pay raises do. If I know that my pay is going to decrease next year despite my best efforts, even as my expenses continue to rise, why would I be compelled to do my best? |
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Where's my incentive to keep working? |
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Someone starts with this company as an administrative clerk. They are forecasted to reach the level of somewhere in the middle management strata by the end of their career and are given that salary accordingly. In their first year they show exceptional levels of initiative, acumen, and enthusiasm. Their forecast is reviewed and revised to a predicted final position at director level. Their salary is increased accordingly. In order to stay at this income level they must continue to demonstrate that they will eventually be likely to reach director level in order to justify this salary. |
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In order to successfully implement this, data would first have to be recorded and analysed in order to correlate early performance indicators with likely final position. |
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So, through repeated reviews early on, your potential is evaluated and your salary adjusted to match. In the first few years, you get a couple raises, from "project manager" level pay to "upper management", then if you really bust your butt and show promise, eventually to "CEO" level pay. Eventually, though, your pay will start to decrease again. At this point, you know you're screwed, because if you don't keep up the performance and eventually make that high position, someone's gonna want their money back. But if you do, you'll be working a high-level position, close to retirement age, with low-level pay. Sure, you earned big-executive pay back in your intern days fifty years ago, but how much is a dollar from fifty years ago worth today, especially seeing as how you already, in your youthful ignorance, spent the money on now worthless cars, toys, gadgets, and ex-girlfriends. |
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