Here is the latest in creative financing from Goldman Sachs: the prices it charges its own employees to use the gym at its West Street headquarters. It's asking its highest-ranking employees to pay $81 more a month than its lowest-ranking staff, Reuters' Felix Salmon reports.
While the bank can argue that it is just charging based on what the market will bear, others are already launching conspiracies.
"Is it a Pigovian tax aimed at minimizing the number of healthy employees?" Salmon asks. "Is it an attempt to stop the unfit from complaining about having to cross-subsidize those who work out?" Planet Money lobbed in a phone call to Goldman— which hasn't yet responded to our request for enlightenment on its thinking. UPDATE: A Goldman spokeswoman declined to comment.
As any student of Economics 101 could tell you, this is price discrimination at work— charging different amounts to various groups based on their willingness to pay. Airlines do it every day.
But looked at another way, it appears to be just the kind of sock-it-to-the rich tax those in Goldman's managing-director bracket are hoping to avoid as Congress debates repealing Bush-era tax cuts.
For the gym's managers, that group is the perfect clientele to court. After all, they pay almost $1000 more a year than the more lowly employees, and presumably are too busy to spend much time sullying towels at the gym. You can see pictures and read an entertaining analysis of the Goldman health club here, thanks to bloggers at Social Workout.
Despite the downturn, about 30%-40% of large companies provide some kind of employee health club benefit, estimates Cindy Matalamaki, a spokeswoman at human-resources company Ceridian.
And with its salary-based pricing for gym membership, once again Goldman proves it is on the cutting edge of finance. "I wouldn’t say that it’s commonplace," Matalamaki says, "But I think it has started to become more of a trend."