All eight of the young bankers I followed entered the financial industry after the crash of 2008 and saw a wildly different scene than they’d imagined as college students. Thousands of bankers were being laid off, firms were chopping off entire divisions, and pay for everyone had come down to levels that, while still lucrative by any real-world measure, were far lower than they’d been before the crash.
For young Wall Street bankers, who often get themselves through tough stretches by imagining their year-end bonuses arriving, the post-crash uncertainty was destabilizing. Once, it had been relatively certain that a young banker or trader who did well would earn much more with each passing year, and would eventually become a millionaire, probably before his or her 30th birthday. But after 2008, the golden pathway began to splinter. New regulation meant to prevent another financial crisis made banks less profitable, and the struggling markets meant that even young bankers—who had historically been immune from layoffs during downturns, so cheap was their labor compared to that of senior bankers—were at risk of losing it all.
One Goldman Sachs analyst explained to me the effect the layoffs and cost-cuts had on the psyches of the sector’s youth.
“You’re working with this constant fear,” he said. “You go to this bulletproof firm, it gives you a ton of options, and it’s really self-validating. And then all of the sudden, you have no options, you’re not getting paid nearly as much as you thought, and you might get fired. And then you start thinking, Well, shit, I could be halfway through law school, and instead I’m in New York dicking around doing models and bottles, and at the end of it I won’t even have that much to show for it.”
The markets have since recovered, as has profitability at some of the Wall Street firms damaged during the crisis. But young Wall Street hasn’t regained its sense of security. It might take a while.
It might sound strange, but many young people come to Wall Street expecting to make the world a better place. This is partly the fault of recruiters, who tempt college juniors and seniors with promises of “real-world responsibility” and rhapsodies about socially responsible investing. But it’s also wishful thinking on the recruits’ part. Jeremy, for instance, had arrived at Goldman thinking that his specific job—trading commodities derivatives—could make the world a teensy bit better by allowing large companies to hedge their costs, and pass savings along to customers. But one day, his boss pulled him aside and told him that, in effect, he’d been naïve.
“We’re not here to save the world,” the boss said. “We exist to make money.”
The British economist Roger Bootle has written about the difference between “creative” and “distributive” work. Creative work, Bootle says, is work that brings something new into the world that adds to the total available to everyone (a doctor treating patients, an artist making sculptures). Distributive work, on the other hand, only carries the possibility of beating out competitors and winning a bigger share of a fixed-size market. Bootle explains that although many jobs in modern society consist of distributive work, there is something intrinsically happier about a society that skews in favor of the creative.