Risk and Reward
By Mira Korber, guest blogger.
The other night I went to a classical music performance and listened to a talented but rather odd cellist. He appeared to be wearing chef’s pants underneath his concert attire; I noticed white kitchen trousers billowing out underneath suit pants. I surmised he must (like hordes of other musicians) have a day job in a restaurant and night gig performing.
Adam Davidson, host of NPR’s Planet Money, explains the similar situation of people following other risky career paths. In his NY Times article, “Why are Harvard Graduates in the Mailroom,” he shows how Hollywood artists and new college graduates often choose careers with transient, low-pay beginnings, but with the slim potential for enormous pay-off.
Asserting that Hollywood, legal, consulting, accounting, and entrepreneurial pursuits (among other fields) are such “economic lottery systems,” Davidson’s premise is that these industries are truly sink-or-swim for young starters. Compounding the issue, safe, secure “Plan B” jobs, like tax filing or work at the local hardware stores, are not as abundant as they used to be, thanks to technological advancements and inexpensive overseas alternatives.
For another perspective on the issue: this article suggests Davidson’s example of Hollywood superstars may be a bit simplified, and offers an interesting analysis of his economic-lottery theory.
To see which careers graduates from Princeton, Yale, and Harvard actually end up choosing, check out the statistics in this post. Actually, most Harvard grads go into finance rather than hitting the mailrooms.
The Economic Lesson
Joseph Schumpeter’s theory of creative destruction perfectly exemplifies where the “Plan B” (according to Davidson), jobs have gone:
“Technology and cheaper goods from overseas have replaced many of the not-especially-creative professions. A tax accountant loses clients to TurboTax; many graphic designers have been replaced by Photoshop; and the small shopkeeper by Home Depot, Walmart or Duane Reade.”
An Economic Question: How do you see creative destruction taking place in your life?