I have unusually strong feelings on this one, because last week's Tube strike coincided with a self-inficted foot injury. And, unlike some, I felt the need to hobble to work, rather than rest at home or play squash, say.

A Tube driver's starting salary is £40k.   Slightly more than a social worker at £19-26k. And the latter is going to need some qualifications, which means some debt that comes from studying for a few years. So, financially, it seems that Tube drivers are doing OK.  Not as much as some workers, but greatly more than the average, which is somewhere in the £20's.

The Economics 101 way of explaining a price, which is what a salary is (a price to give up leisure and spend it driving an Underground train) would mention supply and demand.  This clearly does not work for explaining the pay of Tube drivers, which is clearly well above the minimum level required to get staff.  As Chris Dillow explains in another context, you need to know about power if you wish to explain salaries that are above the clearing level. Writing as someone who used to decide the pay of financial traders and salespeople, this rings very true.  When contronted with a tearful, self-righteous or belligerent staff member* demanding more money, the question I would ask was never "how much good can this person do for me?" but always "how much damage can they cause?"

In the case of salespeople, the ability to remove clients from the company and take them elsewhere - often clients that the salesperson had no role in winning in the first place - played a huge role.  They had power, owing to the frustrating inability of the state to enforce slavery laws in the financial sector, and prevent said salespeople leaving with phone numbers written on their wrists. 

Bankers also have this power. No matter how much effort the job involves, it is hard to explain $2m salaries in any other way than by thinking about the damage they might cause.   As Chris writes:

"When finance was plentiful, managers could rip off shareholders by arranging management buy-outs at low prices. To stop this, bosses had to be offered big money. And in more competitive or contestable markets, a lazy manager can more easily send a company to the wall. With the costs of shirking so large, the bribe required to induce effort must also be large".  

Tube drivers have a similar power, owing to a confluence of two factors: an assertive union, and the fact that they work in an area where strike action produces large negative externalities (though perhaps not as large as some fear). Unlike butchers, bakers or candlestick makers, there is no ready substitute for the service that the Tube drivers monopolise. Hence their need of an extra £1k can cause damage to the working lives of countless other workers. 

It is this power to cause harm rather than do good that explains why some people make a lot of money.

*after 1 year, they would always be one of these three.  'Delighted' only happened in their first year.