He also repeats the oft heard whine that higher tuition and ginormous debt means that graduates deserve higher salaries. Although I’m all for higher salaries, I want them because that’s what good old supply and demand forces dictate, that is, assuming we have free markets. Unfortunately, those more needy or deserving rarely get more for those reasons alone.
As most “young” folks are, Krupo’s very idealistic and can’t imagine that the firms could be even benignly, let alone overtly or covertly, getting together to control starting salaries. Well, I’m cynical enough to believe that anything’s possible when it comes to men wanting to make more money. When a market for resources is as tight as it is today for top accounting graduates, it seems odd that even the most desirable of them can’t negotiate their salaries, starting bonuses, additional vacation, preferred office assignments or other perks. It’s also odd that the schools would ever enable this restraint of trade. For the good of their students, of course… Maybe some students do cut better deals in spite of all the constraints… I have just haven’t heard from any of them yet.
Given the fact that the Big 4 have gotten very good at raising revenues in the form of higher and higher fees for the external audit and Sarbanes-Oxley review, with one firm very rarely breaking ranks to undercut another in a competitive bidding situation… Well, it should come as no surprise that, as accountants, they have also figured out that minimizing the cost of the inputs to production, junior staff, maximizes the profit equation.
Sometimes truth is stranger than fiction.