The lure of Wall Street

The original version of this article incorrectly cited Otis Reid ’12 as an example of a student choosing finance as a career path. In fact, Reid will be working for consulting firm McKinsey & Company following graduation. In addition, the selection of one quote lacking context in the article inaccurately portrayed Reid’s tone in his interview with a Daily reporter. The Daily regrets the error. 

Additionally, the article misattributed the following quote to Sanjay Saraf: “At Stanford, students hoping to pursue such careers are among a minority…”

Stanford students discuss pursuing Wall Street careers amid nationwide debate

Stanford students frantically try to secure summer internships and jobs upon graduation, the popularity and presence of prominent Wall Street firms such as Goldman Sachs and Morgan Stanley has led to a University-and nation-wide debate concerning the recruiting presence of these firms on campus.

“There are three things that draw students into finance: money, procedures and prestige,” said Sanjay Saraf ’12, a pre-med student.

M.J. MA/ The Stanford Daily

Teryn Norris ’12 and Eli Pollak ’12 brought the debate to Stanford when they penned an Oct. 2011 op-ed in The Daily titled, “Stop the Wall Street Recruitment,” in which they claimed that over 15 percent of Stanford graduates continue to join Wall Street firms annually. The op-ed inspired the launch of the Stop the Brain Drain campaign, which aims to promote the public service industry as an alternative to finance.

Director of the Career Development Center (CDC) Lance Choy contested the 15 percent figure. According to him, only approximately 30 percent of the student body responds to the CDC career surveys from which Norris and Pollak extrapolated their information.

Pollak, however, argued that a 30 percent response rate “should be more than sufficient to yield a statistically significant sample.”

Norris expressed opposition toward the “magnitude of influence finance industries exercised over the U.S higher education system,” and particularly on recruitment advantages.

Choy, however, stated that the number of technical firms far outweighs that of finance firms at career fairs, citing that Google is by far the largest employer of Stanford students and has been for a number of years. He also stated that 160 firms participated in campus Cardinal Recruiting, out of which only 23 percent were finance firms.

While to most students Wall Street and money are closely tied, Norris said he does not believe money is the key reason Wall Street jobs appeal to students.

“Money is not primarily the issue,” Norris said. “It is really more about what is promoted by the CDC and the recruitment process. A part of it is cultural and what people call a good career.”

Many students also believe that a Wall Street job can provide them with valuable skills and tools for future endeavors in other fields.

“Few students going the investment banking or consulting route plan to build a career in these fields,” said Shahryar Malik ’12, who plans to pursue a consulting career himself.

“Rather they see their first two years out of college as a way to learn practical skills and a professional work ethic they can apply to business more broadly,” he added. “It allows them to get a cross-sectional view of many different industries.”

Bloomberg View columnist Ezra Klein argued in a Feb. 2012 column that this promise to “give graduates the skills their [liberal arts] university education didn’t” is a structural problem of U.S. higher education titled “Harvard’s liberal arts failure is Wall Street’s gain.”

“There is uncertainty about what one will do after graduation,” Norris said. “Due to the weakness of alternative career tracks, which are not as clear, and [the fact that they] do not have as much skill-based training, students end up opting for a finance job.”

Emma Pierson ’13, president of the Stanford Debate Society, noted that a large portion of her fellow debaters tend to opt for a finance job.

“You can definitely do good for the world through finance and consulting, but more so through other paths,” she said. “I have met some of the smartest people in debates, and they could do so much more good for the world by going into something like research.”

Saraf echoed this point.

“I am not saying that finance is bad, but if you make a start-up that helps out even a hundred people, I think that will make more of a global impact than working in investment banking or consulting,” she said.

Other students say they feel that the entire issue is not as problematic as presented, arguing that Stanford graduates are less inclined toward Wall Street than their East Coat counterparts. According to The New York Times , 14 percent of Yale graduates, 17 percent of Harvard graduates and 35.9 percent of Princeton graduates pursue finance careers.

“At Stanford, students hoping to pursue such careers are among a minority,” Malik said. “In some sense, I think the Occupy Movement has taken Wall Street recruiting at Stanford out of proportion.”

And for some, a career is finance is no less legitimate than any other.

“I believe that if you are really interested in entrepreneurship or tech, go do it. If you are really interested in going directly into government or nonprofit, go do it,” said Otis Reid ’12, who plans to work for consulting firm McKinsey & Company following graduation. “If you are interested in finance…it will be hard for me to…say ‘I know you are interested in finance, but you should go and work in a nonprofit.’”

 

 

About Nehan Chatoor

  • Jenna Nicholas

    Great timing! We are having a discussion on exactly this topic and Ezra Klein’s article tonight at Crothers from 530 to 7. Phil Taubman, secretary of the Board of Trustees, and Felicity Barringer, national environmental correspondent for the New York Times, will be facilitating the discussion. They were both Editors-in-Chief of the Stanford Daily in their time! Hope to see many of you there!  Pizza will be provided! :) 

  • Student

    “Wall Street firms” have done despicable things, but I like to believe not everyone who goes into finance is morally bankrupt. There’s a legitimate and valuable concern here about the need to question the influence of money and greed in our life choices, but we should be careful about making generalizations and moral judgments. If you want to be precise, it’s unethical organizations and unethical people that [tend to] do unethical things.

    I believe in informed freedom: take the time to thoughtfully consider what you believe to be a worthwhile path, and then pursue it. I can’t say that everyone will be happier or make a more positive impact in Industry A rather than Industry B, and I don’t think it’s a cosmic impossibility for someone to do a lot of good in finance. All of us, whether going into finance or start-ups or policy or research or non-profits, whatever value we place on honesty and loving our neighbor, need to hold onto it, live by it, and do what we can to change the culture around us for the better.

    (Irrelevant for the above points but in response to the opinion that a 30% response rate “should be more than sufficient to yield a statistically significant sample”: A 30% response rate isn’t great in this case since the sample is made of individuals who voluntarily self-report, thus non-random and potentially biased, a major violation of required assumptions for statistical analysis. We can’t extrapolate from the 30% since we can’t assume they’re representative of the other 70%. We’d need additional knowledge about the 70% who didn’t respond in order to assume some probability distribution for them.)