As the Occupy movement perseveres and Google's stock price continues to skyrocket, it's no surprise that American youth don't want to work at investment banks. Citing a survey of 6,700 early-career professionals, The Wall Street Journal reports that nearly one-in-five young workers want a job at Google, making it the most popular potential employer by far. Apple and Facebook rank second and third drawing enthusiasm from 12.7 and 8.9 percent of those surveyed, respectively. You have to scroll down the list of results quite a bit before seeing the top-ranking bank, J.P. Morgan, at number 41. Attracting barely 2 percent of the young work force, Goldman Sachs ranks 46th on the list, right behind Macy's. Does the trend towards tech mean we're on track to reclaim integrity and stability in the American economy? Not so fast.
Ironically, previous studies suggest that the waning enthusiasm is a bad sign for the economy. More young people gravitate towards the high-risk-high-reward banking jobs during economic boom periods, but busts tend to follow those booms. For years, consultant Ray Soifer has been tracking the correlation between Harvard Business School graduates who take "market-sensitive jobs" at investment banks and hedge funds after graduation and the overall performance of the economy. As Businessweek explains, the percentage serves as a reverse economic indicator:
The percentage of Harvard MBAs entering market-sensitive jobs peaked at 41 percent in 2008, the year the Lehman Brothers collapse ushered in the financial crisis and the Great Recession. … So Soifer may have a good reason for believing that Harvard MBAs tend to have impeccable timing when it comes to jumping aboard sinking ships.
This year the number is back up to 38 percent, and if the Harvard MBA trend can be extrapolated to account for the rest of the young generation, we're led to believe that the bottom could drop out of the economy at any moment. Since the latest numbers suggest that young people want to work for tech companies don't match up with the trend of HBS graduates taking banking jobs, however, we're not sure it does.
Former McKinsey consultant James Kwak argues that regardless of students' original intentions, Wall Street's recruiting operation is terribly persuasive. Yes, these jobs pay well, but especially at places like Harvard, where Kwak was an undergraduate, the process of courting smart young students into considering banking jobs is incredibly effective:
Yes, there is competition for jobs at these firms. But the process is easy. They come to campus and hold receptions with open bars. They tell you when and how to apply. They provide interview coaching. They have nice people who went to your school bond with you over the recruiting period. If you get an offer, they find out what your other options are and have partners call you to explain that those are great options, but Goldman/McKinsey is better, and you can do that other thing later, anyway.
The spike in numbers of people wanting to work at Google, Apple and Facebook is a sign that the tech companies are catching up. Last week, Mark Zuckerberg was touring the top schools in the Northeast on a recruiting mission, press gaggle in tow, and the perks of working at these places are adding up. All that said, the economy is still horrible for everyone.
This article is from the archive of our partner The Wire.