What Wall Street figured out is that colleges are producing a large number of very smart, completely confused graduates. Kids who have ample mental horsepower, an incredible work ethic and no idea what to do next. So the finance industry takes advantage of that confusion, attracting students who never intended to work in finance but don’t have any better ideas about where to go.
It begins by mimicking the application process that Harvard students have already grown comfortable with. “It’s doing a process that you’ve done a billion times before,” says Dylan Matthews, a senior at Harvard who was previously a researcher at the Washington Post.
Ezra Klein is the editor of Wonkblog and a columnist at the Washington Post, as well as a contributor to MSNBC and Bloomberg. His work focuses on domestic and economic policymaking, as well as the political system that’s constantly screwing it up. He really likes graphs, and is on Twitter, Google+ and Facebook. E-mail him here.
“Everyone who goes to Harvard went hard on the college application process,” he said. “Applying to Wall Street is much closer to that than applying anywhere else is. There are a handful of firms you really care about; they all have formal application processes that they walk you through; there’s a season when it all happens; all of them come to you and interview you where you live, etc. Harvard students are really good at formal processes like that, and they’re less good at going on Monster or Craigslist and sorting through thousands of job listings from thousands of companies whose reputations they don’t know. Wall Street and consulting (and Teach for America) turn applying to jobs into applying to college, more or less.”
But that’s only half of it. The bigger draw, explained a recent Harvard graduate who majored in social science and went to Goldman Sachs for two years, is what Wall Street is selling to potential applicants. “It’s about squelching anxiety in general. It checks the job box. And it’s a low-risk opportunity. It’s a two-year program with a great salary and the promise to get these skills that should be able to transfer to a variety of other areas. The idea is that once you pass the test at Goldman, you can do anything. You learn Excel, you learn valuation, you learn how to survive intense hours and a high-pressure environment. So it seems like a good way to launch your career. That’s very appealing for those of us at Harvard who were not in pre-professional majors.”
In other words, Wall Street is promising to give graduates the skills their university education didn’t. It’s providing a practical graduate school that pays students handsomely to attend. Sometimes, the enrollees end up liking their job in finance, or liking the lifestyle that it affords them, so they stick around. Sometimes, they don’t.
So it seems universities have been looking at the problem backward. The issue isn’t that so many of their well-educated students want to go to Wall Street rather than make another sort of contribution. It’s that so many of their students end up feeling so poorly prepared that they go to Wall Street because they’re not sure what other contribution they can make.
My hunch is that we have underemphasized the need to learn skills, rather than simply learn, while in college. The fact that Teach for America — which pays almost nothing and can place its hires far from cosmopolitan hot spots — is one of the few recruiting systems competitive with Wall Street suggests that graduates are open to paths that aren’t remotely as remunerative and aren’t based in New York or San Francisco.
To read Ezra Klein’s previous columns, go to washingtonpost.