According to a recent piece in the Stanford Daily, some college students, as part of the Occupy Wall Street movement, are starting to object to the presence and power of corporate recruiters on college campuses.
As Stanford senior Teryn Norris writes:
As the financial industry’s profits have increasingly come from complex financial products, like the collateralized debt obligations (CDOs)… the result has been a major reallocation of top talent into financial sector jobs, many of which are “socially useless,” as the chairman of the United Kingdom’s Financial Services Authority put it. This over-allocation reduces the supply of productive entrepreneurs and researchers and damages entrepreneurial capitalism, according to a recent Kauffman Foundation report. Many of these finance jobs contribute to volatile and counter-productive financial speculation. Indeed, Wall Street’s activities are largely dominated by speculative security trading and arbitrage instead of investment in new businesses. In 2010, 63 percent of Goldman Sachs’ revenue came from trading, compared to only 13 percent from corporate finance.
Why are graduates flocking to Wall Street? Beyond the simple allure of high salaries, investment banks and hedge funds have designed an aggressive, sophisticated and well-funded recruitment system, which often takes advantage of student’s job insecurity. Moreover, elite university culture somehow still upholds finance as a “prestigious” and “savvy” career track.
As he explains, it’s not that he wants college graduates to stop working in finance altogether:
The United States needs a strong financial sector, we realize that some of these jobs are productive. What we’re extremely concerned about is the over-supply of some of America’s top talent to many of these firms — and firms that helped create the conditions for a Great Recession, which has extremely blighted the lives for millions of Americans.
What he wants, in fact, is something more complicated. “Universities should consider similar incentives [like loan forgiveness] for undergraduates, designing proactive, long-term strategies to encourage alternative career tracks.”
Well, I suppose, but it’s actually sort of hard to argue that it’s the universities that are responsible for tracking students into finance. Investment banks and hedge funds have a strong recruitment system, but that’s just the icing on the cake. Students want these jobs because they pay well. Incentives for undergraduates might be fruitful but it’s pretty hard to make “socially productive careers in public service, entrepreneurship and scientific research” look as attractive as finance; they’re just not as lucrative.
