Wondering if the management consulting firms are actually outsourcing much of their work - particularly in IT work. Do the other three sectors outsource like the MC firms? Is the Gini index for that sector for the consulting firms or for the overall consulting infrastructure? Isn't a much smaller fraction of management consulting talent corralling the wealth in this sector than in the other sectors? Thoughts?
This is a great point. The estimates I provide here are specifically for the consulting firms themselves, focusing solely on company payrolls within each sector. It’s true that management consulting (MC) outsources a significant portion of its IT infrastructure—however, since these payments are categorized as external services, they weren't included in my analysis.
While it’s clear that MC talent benefits from these outsourced services, whether including this infrastructure would materially affect their Gini Index is still an open question in my mind. The impact would largely depend on the number of people employed to support this IT infrastructure. For example, the UK, Haiti, and Bangladesh all have similar Gini indices (around 40), but with vastly different median incomes—$50K in the UK versus $2K in Haiti and Bangladesh. Despite this, due to differences in population size, a Composite Gini Index for (UK + Haiti) would likely remain around 40-45, whereas (UK + Bangladesh) could see a dramatic increase—potentially reaching 65-70.
My guess is that MC + IT infrastructure might resemble the (UK + Haiti) scenario rather than (UK + Bangladesh), but this is purely speculative. I’d be very interested to hear from any MC subscribers with insights on this. Thanks for the great comment, Tom!
On my way to getting kicked out of a career day for showing a Gini index chart to 3rd graders
Wondering if the management consulting firms are actually outsourcing much of their work - particularly in IT work. Do the other three sectors outsource like the MC firms? Is the Gini index for that sector for the consulting firms or for the overall consulting infrastructure? Isn't a much smaller fraction of management consulting talent corralling the wealth in this sector than in the other sectors? Thoughts?
This is a great point. The estimates I provide here are specifically for the consulting firms themselves, focusing solely on company payrolls within each sector. It’s true that management consulting (MC) outsources a significant portion of its IT infrastructure—however, since these payments are categorized as external services, they weren't included in my analysis.
While it’s clear that MC talent benefits from these outsourced services, whether including this infrastructure would materially affect their Gini Index is still an open question in my mind. The impact would largely depend on the number of people employed to support this IT infrastructure. For example, the UK, Haiti, and Bangladesh all have similar Gini indices (around 40), but with vastly different median incomes—$50K in the UK versus $2K in Haiti and Bangladesh. Despite this, due to differences in population size, a Composite Gini Index for (UK + Haiti) would likely remain around 40-45, whereas (UK + Bangladesh) could see a dramatic increase—potentially reaching 65-70.
My guess is that MC + IT infrastructure might resemble the (UK + Haiti) scenario rather than (UK + Bangladesh), but this is purely speculative. I’d be very interested to hear from any MC subscribers with insights on this. Thanks for the great comment, Tom!