Determination of Wages for Management Analysts

1. Just answers the 4 questions below using some economic concepts. Choose an occupation that you are interested in and research what the average salary is for someone employed in that field. Using what you have learned in this chapter about the determination of wages, justify why someone in this position would be paid the wage that they are paid. Please do not use the example for the questions below, use something else.
2. Please give comment and what you think??? The occupation I have chosen for this discussion forum is that of a Management Consultant.

I found some very good information on the U.S. Department of Labor website (Bureau of Labor Statistics) which gave a comprehensive overview of the job of a Management Consultant. Though this information consists of 2002 data, it is still very relevant to today's consulting environment.

Management Consultants, or Management Analysts, analyze and propose ways to improve an organization's structure, efficiency, or profits. They work either as self-employed contractors or work as part of consulting firms. They work in both the public and private sectors and specialize in either specialize in type of industry, type of business function, or if government, then by type of agency.

Because consultants must spend a significant portion of their time with clients, they travel frequently. In addition, they must meet often tough, aggressive deadlines. They must always strive to keep their client happy with the services and work they provide because failure to do so would mean loss of that client - an effect especially devastating to self-employed consultants who work on a project-by-project basis and do not have the luxury of being paid a regular salary.

In looking for a consultant, employers typically look for those who possess at least a Master's degree and or years of experience.

Though earnings for this profession vary widely, the potential to earn a high salary is there. Because of the required qualifications and level of expertise, the heavy amount of travel, the long hours spent meeting deadlines and stress of keeping the client satisfied, consultants are typically compensated very well. In addition, the nature of the work, often involving great amounts of analysis warrants the salary that these professionals make.

Here is detailed information regarding earnings:

EARNINGS
Salaries for management analysts vary widely by years of experience and education, geographic location, sector of expertise, and size of employer. Generally, management analysts employed in large firms or in metropolitan areas have the highest salaries. Median annual wage and salary earnings of management analysts in 2002 were $60,340. The middle 50 percent earned between $46,160 and $83,590. The lowest 10 percent earned less than $35,990, and the highest 10 percent earned more than $115,670. Median annual earnings in the industries employing the largest numbers of management analysts and consultants in 2002 were:
Management, scientific, and technical consulting services $71,790
Computer systems design and related services 66,120
Federal Government 65,480
Insurance carriers 51,780
State government 47,340
According to a 2002 survey by the Association of Management Consulting Firms, earnings-including bonuses and profit sharing-averaged $47,826 for research associates in member firms; $61,496 for entry-level consultants, $78,932 for management consultants, $112,716 for senior consultants, $168,998 for junior partners, and $254,817 for senior partners.
Some of the big names in consulting are McKinsey, Boston Consulting Group, and the consulting arms of the Big 4 accounting firms (Deloitte, E&Y, PWC & KPMG).
Source: http://www.bls.gov/oco/ocos019.htm
3. Please give comment and what you think??? An occupation I would be interested in is a Paralegal or Legal Assistant. I have always enjoyed office/computer work, and the legal profession is very interesting. My class in business law was one of my favorites. I think the atmosphere and type of work is something that would appeal to me.
Here is the information I gathered on this occupation:
Paralegals and legal assistants held about 200,000 jobs in 2002. Private law firms employed 7 out of 10 paralegals and legal assistants; most of the remainder worked for corporate legal departments and various levels of government. Within the Federal Government, the U.S. Department of Justice is the largest employer, followed by the Social Security Administration and the U.S. Department of Treasury.
Paralegals and legal assistants are projected to grow faster than the average for all occupations through 2012. Some employment growth stems from law firms and other employers with legal staffs increasingly hiring paralegals to lower the cost and increase the availability and efficiency of legal services. The majority of job openings for paralegals in the future will be new jobs created by employment growth, but additional job openings will arise as people leave the occupation. Despite projections of fast employment growth, competition for jobs should continue as many people seek to go into this profession; however, highly skilled, formally trained paralegals have excellent employment potential.
Earnings of paralegals and legal assistants vary greatly. Salaries depend on education, training, experience, type and size of employer, and geographic location of the job. In general, paralegals who work for large law firms or in large metropolitan areas earn more than those who work for smaller firms or in less populated regions. In addition to a salary, many paralegals receive bonuses. In 2002, full-time, wage and salary paralegals and legal assistants had median annual earnings, including bonuses of $37,950. The middle 50 percent earned between $30,020 and $48,760. The top 10 percent earned more than $61,150, while the bottom 10 percent earned less than $24,470. Median annual earnings in the industries employing the largest numbers of paralegals in 2002 were as follows:
Federal government $53,770
Legal services 36,780
Local government 36,030
State government 34,750
From what I have learned in Chapter 13, we can justify these wages by looking at the high demand for the service, the number of qualified employees to fill these positions, and the attractiveness of this job to potential employees. Although I would expect wages for this position to increase, especially in a city with a high cost of living.
This information was obtained from the U.S. Department of Labor website:
http://stats.bls.gov/oco/ocos114.htm

4. Please give comment and what you think??? Although I've worked for years part time in accounting applications and human resources, I still don't know what I want to be when I grow up. So I've decided to use my new son-in-law's ambitions as the basis for my research on this topic. He plans to work in the insurance industry here in California, initially as an agent and then in regional management. He is currently completing his bachelor's degree, studying and taking the industry licensing exams and works full time in an agent's office. He plans to complete a master's degree as well. My daughter completed her bachelor's degree and she is working to help support him through all this!

I used the U.S. Department of Labor Bureau of Labor Statistics website, www.bls.gov, as the source for my information.

Insurance Sales Agents "sell life, property, casualty, health, automotive, or other types of insurance. They may refer clients to independent brokers, work as [an] independent broker, or be employed by an insurance company"

The average of annual wages (mean) for this occupation is $53,770 while the median wage(wage in the middle of the range) is $40,040. The range is between $21,940 and $104,920.

The annual mean wage for this occupation is $65,100 in California. California is ranked 2nd as a top paying state for this occupation. I checked metropolitan area estimates for San Diego and the average annual wage for Insurance Sales Agents is $49,140. The reliability index number for the estimate at this level is high at 9.1% so the estimate may not be very reliable.

It would be interesting to see comparisons of annual incomes between independent brokers and agents working for various large insurance companies. The company that he plans to work with requires a bachelor's degree along with state licensing. The state requires the occupational exams for licensing as a broker. These requirements make more of a barrier for workers desiring to enter this occupation. They may make the worker more valuable and up their potential earnings or the demand for their services. I don't know. It is a little hard to get past that image I have from "Groundhog Day" of the guy trying to sell Bill Murray's character life insurance...