In his latest appearance before the Treasury Select Committee, the Governor railed against the UK’s most talented young people for taking the City’s filthy lucre instead of getting a more respectable job. ‘I do think it is rather unattractive that so many young people, when contemplating careers, look at the compensation packages available in the City and think that these dominate almost any other type of career,’ Merv said today. ‘It's not a very attractive situation that such a high proportion of our talented young people naturally look at the City and think it is the only place to work in.’
To be fair, the main target of King’s criticism was (we think) not the graduates themselves, but the banks who are offering these huge compensation packages. The problem, he says, is that the pay structure at City firms – which is usually heavily weighted towards bonuses – encourage short-termism and excessive risk-taking. That’s not in the interests of the banks, let alone the UK as a whole.
In fact, King says he’s been most impressed by those running smaller businesses around the country, not the ‘masters of the universe’ in the Square Mile. ‘They are paid far less than people in the City. They have a tiny, tiny number of highly qualified people working for them and the rest are ordinary, highly motivated people drawn from the community,’ he gushed today.
King’s point about the structure of City bonuses is a valid one, and he’s right to point out the disparity that’s developed between standard graduate pay-cheques and entry-level banking jobs – which can sometimes pay up to twice as much. It’s not good for UK plc if all the best candidates end up in the Square Mile.
On the other hand, we can hardly begrudge the UK’s top talent wanting to maximise their earning potential. Why shouldn’t graduates choose to take a job that will earn them a life-changing sum of money in a relatively short time? In some cases they’ll be able to leave in ten years with financial security for life – whereupon they can go and write books, or work for Oxfam, or set up an incomprehensible Web 2.0 business.
And it’s also worth bearing in mind that although King’s background is in academia, he doesn’t exactly do badly out of the City’s success – as Governor, he gets paid a salary of nearly £300,000 a year...