Kevin Roose, the author of a hot new book on Wall Street, explains why a six-figure salary just ain’t enough.
Fortune.com selects the most compelling short essays, anecdotes, and author interviews from “250 Words,” a site developed by Simon & Schuster to explore the best new business books — wherever they may be published.
For this installment, 250 Words’ Sam McNerney sits down with Kevin Roose, author of Young Money: Inside the Hidden World of Wall Street’s Post-Crash Recruits, which debuted this week from Grand Central Publishing (Hachette). Roose spent three years shadowing eight first- and second-year workers at firms like Goldman Sachs and Bank of America Merrill Lynch and tells a gripping tale of Wall Street’s beleaguered, discouraged next generation. Below, the author reveals why, despite the lure of endless power and money, many would-be bankers would rather work for a tech startup.
McNerney: To an outsider, money explains why hordes of college grads flock to Wall Street. But after studying the recruitment process you write that, “a big paycheck may not in fact be central to Wall Street’s allure.” Could you explain how Wall Street banks appeal to the anxieties and insecurities of, say, an Ivy League junior who is trying to figure out what he or she will do after graduation?
Roose: This was one of my more surprising findings. When I asked young bankers why they’d chosen Wall Street, only a few said it was because they wanted to make six figures right away. The bigger thing, for a lot of them, was that the large Wall Street banks make it very easy to apply for a job. They come to your school, woo you with fancy recruiting sessions, conduct on-campus interviews, and tell you that you only need to stay for two years. Pretty soon, all your friends are applying to Goldman Sachs, so why not join them? If you think about it, it’s sort of the perfect catnip for a type-A Ivy Leaguer who’s worried about being jobless after graduation, and wants to do something prestigious and challenging without committing to a lifetime career.
Wall Street jobs are notorious for long hours. It’s not uncommon for interns and entry-level employees to work 100-hour weeks to prove their work ethic and loyalty. However, one of your subjects remarked that “It’s not the hours that kill you—it’s the lack of control of the hours.” Tell us about the psychology of Wall Street. How do those 100-hour weeks affect the mind?
In the beginning, a lot of the young bankers I spoke to considered it a point of pride to work such long hours. (One of them told me about the “banker nine-to-five,” which is when you work from 9 a.m. until 5 a.m. the next day.) But the fact that they can be — and are — called into work at any moment, 24 hours a day, also takes a huge toll on their personal lives. Relationships break up, friends become estranged, health problems start to appear. And a lot of them come to really resent their jobs because of it. One pair of bankers I followed started calling their office “Azkaban,” like the prison in Harry Potter where people’s souls are sucked from their bodies.
A number of moral questions pertaining to the relationship between Wall Street and Main Street arose after the financial crisis. Such questions concerned young Wall Street analysts, you write, but their day-to-day tasks prevented them from addressing the big picture. You term this dichotomy “the compartmentalization phenomenon.” What do you mean by that?
Well, imagine it this way. Say you’re a paramedic. Your job is attending to emergencies all day, and while you might have strong feelings about big-picture issues vaguely related to your profession — like, for example, the Affordable Care Act’s effects on Medicare reimbursement — you’re not necessarily going to spend a lot of time thinking about that stuff on the job, because you’re trying to restart someone’s heart. I’m not comparing bankers to life-savers, but I do think the same principle holds. Because a young banker’s entire day consists of getting yelled at and dealing with a series of mini-crises, the stuff about morality and ethics often gets shoved to the side.
Author Kevin Roose
This sentence resonated. “They get the same rush from a well-executed trade that a writer finds in a well-turned paragraph—not because there’s money in it, necessarily, but because it takes technical skill and some measure of creative thinking to pull it off.” How much of life on Wall Street is about, as you put it, the thrill of a “perfectly timed trade, the M&A brawl, or the big promotion.”
It depends. I think there are some people in finance who genuinely love their jobs, especially the ones higher up the ladder. But at the junior level, it’s a very small portion. Most people are there for some other reason — because they want to pay off student loans, because their parents pushed them into finance, because it’s prestigious. There isn’t a lot of love of craft when you’re a first-year analyst.
There are assholes in every industry. Yet finance seems to contain an above average amount. You raise a question that I think about often. “What if Wall Street doesn’t just attract preexisting douchebags, but actively draws normal people into an inescapable vortex of douchebaggery.” Now that you’ve finished the book, what’s your answer?
I do think Wall Street changes people. All eight of the young bankers I followed were different people after a few years of finance. It definitely makes you more cynical, more commercial-minded, and sometimes your creative side atrophies. But I don’t think it’s inescapable. It’s possible to stay grounded, especially if you leave the industry.
You note that Harvard Business School has been “bitten by the tech bug.” One of your subjects (Samson White) left Goldman Sachs to launch a tech start-up with a friend. Is Wall Street losing its allure to tech companies like Google, Apple and Facebook?
Absolutely. One of my young bankers told me, “The status jobs aren’t at Goldman Sachs anymore.” And if you go to college campuses now, the excitement isn’t around the bank recruiting sessions. It’s when Google comes to town.
Kevin, let’s say you have a son who is a sophomore at Harvard. He’s starting to think about his life after school. He has expressed interest in finding at job at Wall Street. What advice would you give him?
I’d caution him strongly against it, and not because of villainy or bad ethics in the financial sector, either. It’s just a very unhappy way to spend your early twenties.