The allure of Silicon Valley (and Alley) over Wall Street for would-be bankers makes sense in theory, but it's not really a better career bet. As the young Ivy League-educated with dreams of becoming rich in their 20s are all-to-aware, there fewer and fewer securities and banking jobs. In New York City, reports the Wall Street Journal's Suzanne Kapner, there has been a 10 percent drop of financial sector jobs to 163,000 in the last five years while over the same period tech jobs have risen by 10 percent to 275,600. So what's an ambitous college grad to do? Bolt for the uncertain, unstable, but potentially lucrative start-up land.
Now, keep in mind, the trends in New York City may not be holding up nationally. If you take a slightly longer view, Bureau of Labor Statistics figures show that over the last decade national employment in securities firms is actually up 2.2 percent, while non-manufacturing company employment is down 1.4 percent.
But these statistics don't capture cultural cachet. The cool jobs right now, where the potential payoffs are bigger and the work more like partying, are at the tech firms. Instead of pushing money around in a field whose image hasn't recovered since the financial crisis, why not do something (even if it's not exactly clear what) at the kind of "hip" "tech" "companies" that get featured on Girls. Plus, the money is potentially bigger than Wall Street: someone who has survived the culling that goes on at financial firms and sticks around for 10 years will take home something around $500,000 in salary plus another $500,000 in bonus, according to CNBC. A vice president-level engineer at an already successful tech company will have a similar salary, but get another $1.5 million to $10 million in stock. Plus, ping pong tables, whiskey Fridays, and casual dress code in the Flatiron District is way cooler than wearing suits and pulling endless all-nighters in Lower Manhattan — if you're lucky to keep a job.
But there's a gamble in tech. So many start-ups, especially as the market gets more and more saturated, will wither away into nothing. Depending on who you ask and how you measure, 30 to 40 percent or 95 percent of start-ups fail. The few years spent attempting to build a business provide great experience. The salaries disappear when financing runs out and the stock options are worth nothing.
The banking jobs, again if you can get promoted, may be boring, but they're also steady. And those financial sector positions are arguably better for society than developing the fourth-place daily deal app: tech companies generally create wealth for themselves and themselves alone because of their higher productivity, notes Kapner. While Silicon Valley is the number one highest performing metro-area in the country, according to the Milken Institute, it's in a rich getting richer, poor getting poorer kind of way. Which, you know, isn't great for anyone, either.
This article is from the archive of our partner The Wire.