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Today's Top News
Celebrating the End of Kids' Wall Street Dreams
Amid fears of high youth unemployment creating a "lost generation," there is suddenly a bright spot: Apparently, fewer young people are going to work in the industry that destroyed our economy.
That's the word from The New York Times, which reports that since 2008, "the number of investment bank and brokerage firm employees between the ages 20 and 34 fell by 25 percent," as banks have laid off young people and slowed college recruiting.
For young Wall Streeters, this is a bummer. But for society as a whole, it's cause for celebration because it may finally allow America to counter the destructive Gordon Gekko-ization of youth culture.
Recall that in recent years, up to a third of kids at elite universities have entered finance-related jobs. Such a mass shift in career preferences is, to put it mildly, alarming. A country whose best and brightest begin avoiding occupations that add value to society (doctors, engineers, etc.) in favor of vapid get-rich-quick gigs is a country that has stopped investing in itself and started mortgaging its future.
In light of that, Wall Street's youth layoffs raise a bigger question: Why have so many more kids been pursuing careers in finance?
Part of it is greed, as a 2010 Higher Education Research Institute report found a record-high three-quarters of freshmen said being "very well-off financially" was their top objective. Not surprisingly, many graduate with speculation and usury in their plans.
Such a mindset, though, hasn't emerged in a vacuum — it tracks two larger greed-driven trends.
The first is a change in the American Dream from a middle-class aspiration to an "MTV Cribs"-style fantasy. In that shift, we began portraying Wall Street fat cats as idols — the Great Men to be worshiped in our media and consulted by presidents. Taking cues from the larger culture, kids have naturally tried to follow in the idols' footsteps.
Simultaneously, the American economy changed from producing tangible assets to now more often generating paper profits for bankers.
The numbers, as recounted from economist Simon Johnson, tell that tale: "From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits ... last decade, it reached 41 percent."
This metamorphosis was no force of nature — it was the result of bank-owned politicians deregulating and subsidizing the finance industry, turning it into a monster swallowing an outsized share of national wealth. That, in turn, prompted an employment shift, which included young people.
"When banks get 25 percent to 30 percent on credit cards, and 500 or more percent on payday loans, capital flees from honest pursuits, like auto manufacturing," author Thomas Geoghegan wrote in Harper's Magazine. "We set up the incentives to keep our best and brightest out of Detroit ... (They) went off to work at AIG."
Those incentives highlight the final part of the youth story: need.
Today, the average undergraduate matriculates with $25,000 in student debt. That burden compels kids to base career moves on where they can get the richest the quickest so as to pay off their loans. In an economy that has privileged finance, that often means heading to Wall Street.
Now, though, that career path may be closed — and even if it's only temporarily closed, the reprieve is significant.
A few semesters worth of kids driven into occupations that build and sustain rather than cannibalize and leech could begin moving a nation back to economic fundamentals. It could mean kids finally appreciating that greed isn't so good and that policy debates — whether they're about regulation or student loans — aren't meaningless.
Ultimately, young people might see that those debates actually matter — and that they better get involved in them or their future will remain in jeopardy.
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12 Comments so far
Show All"Now, though, that career path may be closed — and even if it's only temporarily closed, the reprieve is significant."
well....in the mean time,
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welcome to america.
...peace...
Those things may pay the bills, but it will be creativity that will build the future. And if today's kids are more open to following their "bliss" rather than trying to travel down a prescribed road to an MBA, perhaps it's a positive. At least they will have other alternatives to Wall St. and military service.
"At least they will have other alternatives to Wall St. and military service."
and they will interact w/ people in their communities, and they will experience/wittness first hand exploitation that may funnel them towards groups that are engaged in social and economic justice. we can hope...
...peace...
During the 1973 to 1985 timeframe cited by Sirota, financial industry employees annual incomes' were comparable to the incomes of their counterparts in other industries.
For the past two decades financial industry employees' annual incomes' have exceeded the LIFETIME INCOMES of their counterparts in other industries, allowing them to buy a lot of politicians.
"A few semesters worth of kids driven into occupations that build and sustain rather than cannibalize and leech could begin moving a nation back to economic fundamentals. It could mean kids finally appreciating that greed isn't so good and that policy debates — whether they're about regulation or student loans — aren't meaningless.
Ultimately, young people might see that those debates actually matter — and that they better get involved in them or their future will remain in jeopardy."
There is a bright spot on the horizon. Wahooooo! It's time our youth followed their "bliss" and not the all mighty dollar. It's time that the MBA was seen as an empty promise, and the study of the humanities and arts was once again viewed as worthwhile.
I'd grown tired of seeing questions from high school graduates about what profession made more money.
"It's time that the MBA was seen as an empty promise, and the study of the humanities and arts was once again viewed as worthwhile."
exactly...
...peace...
The jobs and professions that could offer a stable, secure, and somewhat comfortable middle class lifestyle do not appear to offer the same stability and security that they once did, so I can see why a good number of talented young people are determined to become wealthy, with a great many (I would think the great majority) of them to inevitably fail, become discouraged, and to become damaged or desperate. That is part of the downward spiral we are in.
Ironically, just this morning Philly's KYW newsradio broadcast a chirpy headline report touting the news that the unemployment rate in the US fell to 8.6% in November, its lowest level since March 2009.
Leaving aside the wholly fictitious nature of official unemployment statistics, one bit especially caught my ear: some local "expert" mentioned that a couple of Delaware Valley employers are now hiring-- one is "Smith Barney".
It's gratifying to find that Wall Street is pulling the tri-state area out of the ditch it dug for it in the first place.
Official employment statistics in this country have been hogwash for years. I always got a big kick out of listening to talking heads expound on how our unemployment was better than European countries'. When Germany says it's 12 percent, you can bet that number is real. When we say 9 percent, we don't count people on Public Assistance, people in jail, people who have given up, people whose benefits have run out, and perhaps most important--people who are working part time because they can't find a full time position. That probably totals up to about 25-30 percent. IMHO
johnyred, that is just about what the unemployment rate was during the first great depression! I know just a coincidence.
OMG! If Wall Street and other "financial services" outfits are no longer going to be hiring as they once did then what will 1/3 of Harvard, Princeton and Yale graduates do? Heaven forbid if they have to actually work at something where they don't make six figures right out of the gate. How is little Chas going to be able to afford that silver Audi A6 if he can't get a job in "futures" with some elite bunch of Wall Street money whores? Mumsy is going to be soooo disappointed.
It would be more comforting if the flight from Wall Street were led by the young themselves instead of layoffs and slacking off on recruitment. Our values are worthless if they are not instilled in our children.