<p>Especially among my female peers, much were out much sooner. Lots are gone to new careers or to the beach by 50.</p>
<p>Traditionally, on the banking side, the work can be grueling, and feature very long hours and frequent periods of travel away from one’s family. On the trading side, the culture can have a male locker room aspect to it. Women have long made “glass ceiling” allegations, and their representation at the top has been on the light side.</p>
<p>My ex firm, for one, made a concerted effort to stem the tide of female defections, offering extraodinarily generous maternity leave policies for female employees.But these were offered differentially, based on how much they liked them, not as a blanket matter.</p>
<p>Some of those who would come back would, for family reasons at least, need to take “mommy track” positions that are not what originally drew them to the profession.</p>
<p>Also many women in banking wound up marrying men who had very high paying careers themselves.</p>
<p>Putting all this together one finds many defections by women to better accommodate their peferences in raising a family. And once you are out it is often not easy to get back in.</p>
<p>This is above and beyond the departures for other reasons, which I won’t go into.</p>
<p>Most of such departures from the industry take place far before any point where these women are independently wealthy via their own banking careers.
The ones I know about, anyway.</p>
<p>The “stars” are more motivated to stay in for the long haul, via compensation along the way if nothing else, and also probably given more accomodation along the way to do so. And some of this group undoubtedly does retire early because they no longer need to work. I remember a female partner I spoke with admitted that the sacrifices from a family standpoint she had to make to get to that point were substantial. But things have undoubtedly improved for women since then. But maybe only in some respects, for some women.</p>
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<p>I certainly agree: we probably need a reoptimization of salary scales for numerous technical skills, not just engineering. But it was engineering that is the specific field in question according to the flow of the thread, and so it is engineering in which I was focused. The central question remains: why are management skills valued so much more than technical skills that management seems to be the only way that most employees can progress their careers? While nobody doubts that some managers are extremely productive, surely we can think of many more that are not. In particular, a star engineer (or star food scientist) is almost certainly more productive and valuable to a company than is a mediocre manager, but that mediocre manager will be paid more nevertheless. Why is that? </p>
<p>Regarding the higher pay within the financial services industry, no problem would exist at all if that industry were indeed more productive than are other industries, as it is only natural for labor to flow to the more productive industries through higher wages. Industrial/manufacturing wages in the 1800’s were significantly higher than were subsistence farming wages which attracted millions of rural workers into the cities and hence transforming the US into the world’s leading industrial powerhouse. But as we have learned in the past year, much - probably most - of the gains in productivity of the financial services industry were fictitious. Financial services profits were generated only by exporting unexpected risk to the rest of society…which then required heavily subsidized taxpayer support when those risks came to fruition. Yet even so, compensation practices are being only slightly modified, and the financial services industry has wielded its political lobby to thwart significantly reform, whether having to do with regulatory reoptimization or serious consumer protection. Financial services has therefore become a rent-seeking industry that has caused, and will probably continue to cause, significant damage to the greater society. </p>
<p>In contrast to scientific/engineering innovation which is almost always a net benefit to society (with the possible exception of innovation in military technology), much financial innovation consists of either finding new ways of separating consumers or innovators from their money - witness the proliferation of hidden credit card and bank account fees and the now empirically demonstrated fact that private equity, on average, does not produce above market returns to investors, largely due to hidden fees and misleading accounting schemes employed by the private equity firms (Kaplan & Schoar 2005, Phalippou 2009). The increasingly and cunningly parasitical nature of the financial services industry will, unfortunately, probably mean inappropriately high pay packets for those in the industry for years to come.</p>