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Monday, May 19, 2008

Doctors have it better than fisherman. . .for now.




I went fishing this weekend in Montauk--Long Island's eastern-most tip. I went on a charter full of amateurs and pleasure seekers. The boat was staffed by pros; fisherman that had done everything from "swording" on the grand banks to crabbing off the Aleutians. I am a terrible fisherman and have not ever caught a fish, but I love talking to people and learning about what they do and how they earn a living.

The man in the picture is a professional fisherman. He has fished on commercial boats all over the Atlantic. From talking to him, I learned that I have it pretty good as a doctor, even when I was a resident. Fishing boats are generally under corporate ownership yet the crews that staff them are independent contractors; that is they are 1099-ers. Like independent contractors anywhere else in the US, fisherman must fund 100% of their health insurance benefits, retirement accounts, and business expenses, yet have very little in the way of the tax advantages afforded to other corporate structures. On top of that, in a quirk unique to maritime law, the owners of the fishing outfit do not risk the financial losses that can occur in the event of a poor fishing season. The crew takes that risk.

For example, as I was told, if the ship brings only $15,000 worth of fish, but the expenses for the expedition were $20,000 , the crew owes the company $5000. The employers don't lose the money, the employees do. In the case of a good haul, the owners can keep up to 60% of the profits, and the crew splits the remaining 40%.

The employees risk not just life, but money, on every outing. The employers risk nothing.

Contrast that to my life. I have 3 employees and I'm the employer-owner. My overhead is in the $16,000 range per month, often up to $20,000. On good months, when I exceed the overhead, I take it all the money. On months that I fall short, I eat it all of the loss. My employees get paid regardless of the profits or losses in any given period. When times are great, perhaps they are envious of me. When times are bad, they make more than I do. With the exceptions of maritime law and CEO pay, this type of arrangement is true for all businesses in the USA.

So what I took away from the fishing trip--other than some fluke--was that doctor-employees typically have it better than doctor owners at present. Fisherman employees have it far worse than doctors or boat owners. Doctor-owners and fisherman face similar challenges; namely an environment that is largely outside their own control and one that is only getting less bountiful.

Again, just my observation.

The IU.