<p>Oh, I didn’t mean to imply that a higher US News ranking increases a college’s revenues. Only that higher expenditures (= higher costs), other things equal, will lead to a higher rating, and that’s something college administrators are after. That’s the “reward system” I was talking about, not revenue. As not-for-profits they’re not seeking higher revenue for the sake of higher revenue. Success in the world of higher education is defined largely by reputation, and the US News ranking is an important factor in that, not only in its own right but because it has “echo effects” in other reputational measures.</p>
<p>“Financial resources”—spending per student–counts for 10% of the US News ranking, making it one of the larger factors in the formula. “Faculty resources” counts for another 20%; and “faculty salary” counts for 35% of that 20%, or 7% of the total formula. (As best I can tell, they’re double-counting faculty salary, first in the “faculty resources” category and then again in the “financial resources” category, where faculty salaries presumably make up the bulk of the “spending per student”; at the margins, this double-counting would create an especially strong incentive to jack up faculty salaries).</p>
<p>I don’t mean to suggest that the US News rankings are the only factor driving up higher education costs, or that raising costs is the only way a school can boost its US News rankings. But there’s plenty of evidence that colleges do pay attention to their US News rankings and take deliberate steps to produce numbers that will make them look better on the US News metrics. To the extent the US News ratings reward or incentivize cost inflation, I think that’s a bad thing for higher education.</p>
<p>Sure, absolutely. It costs a lot of money to hire and retain good faculty, and to keep your student/faculty ratio down. I have no problem with that. My only point was that higher costs are not ALWAYS associated with higher quality. Some costs may be intentionally padded; or, if not padded, there’s at least no incentive to keep costs contained, because the higher your costs go, the higher your US News rating will be.</p>
<p>As for a low student-faculty ratio, I completely agree that’s a desirable outcome. Somewhat bizarrely, however, the US News ranking methodology counts student-faculty ratio as only 5% of the “faculty resources” score, which in turn accounts for only 20% of the total score. If I remember my math correctly, that means the desired outcome—a low student-faculty ratio—counts for only 1% of the total US News score. Meanwhile “faculty salaries” count for 7% of the total score, and “spending per student” counts for another 10% of the total score.</p>
<p>So if I’m a college president looking to boost my school’s US News ranking, one of the first things I’m going to do is to try to give everyone on the faculty a raise. I’ll do that for several reasons. First, it’s a factor that’s entirely in my control (assuming I can raise the money through higher tuition, alumni donations, or other means). Second, it will have a bigger payoff on my US News ranking than other uses of that money, because it will be counted both in the “faculty salary” and in the “spending per student” categories." Third—and only third—it may at the margins help me retain and recruit the best faculty, and that may have reputational pay-offs somewhere down the road (e.g., in the school’s PA score, as rated by other college presidents and provosts). But those reputational payoffs are less certain, and at best likely to be delayed. The immediate payoff is in padding my cost-per-student and average faculty salary scores. And by the way, the way the US News formula works I’m probably better off using the money to raise the salaries of existing faculty rather than to add new faculty and reduce the student-faculty ratio, because student-faculty ratio counts for 1/7th as much as “average faculty salary.” Moreover, if I do hire new people, I’m better off hiring one very senior, very highly compensated person rather than the 2 or 3 younger (and in many cases more energetic) younger faculty I could get for the same price; again, because the overcompensated geezer will raise the average faculty salary, while the 2 or 3 fresh-faced junior faculty will bring down the faculty salary average. </p>
<p>Of course, it’s not all as cynical as that. But you see the point. It costs a lot to maintain a low student-faculty ratio, but that doesn’t mean (high costs) = (high quality) and (higher costs) = (higher quality). If we think a low student-faculty ratio is a good thing, we should use metrics that weigh that factor heavily and directly–not in the token way US New does, much less in the bizarre way that rewards the highest-cost way of getting the intended result.</p>
<p>Uh, 2 out of 29 isn’t exactly large representation, being less than 7%. We also have no information on the performance of state school graduates within those specific 2 industries.</p>
<p>And that’s the point. To continue my example, MIT is obviously a highly tech-oriented school and would obviously be expected to produce a large proportion of graduates who head to technology or manufacturing. Yet when, during the boom years, nearly half of the graduates took jobs in finance or consulting, that indicates how overweighted those fields tend to be - with the over-representation likely being even higher for the Ivies. {For example, I expect more MIT undergrads than Harvard undergrads heading to automobile or aerospace firms).</p>
<p>To be honest, I think you’re the one who lacks a clue, so allow me to provide you that clue. I thought it had been well-understood that the pay packages of consulting and (especially) banking have significantly outpaced that of regular companies over the last few decades - which is unsurprisingly correlated with the increasing relative popularity of consulting/banking over regular industry jobs during that same timespan (i.e. see ‘From Higher Aims to Hired Hands’ by Rakesh Khurana, 2007). One can also consider Figures 2b and 7 below. Or, if you prefer regression tables, consider Table 2, model 1. </p>
<p>I certainly agree that being a senior manager/director of a large company is indeed quite nice. The question is - what is the (perceived) fastest path to get there, and that is what you either seem to be sadly misinformed about, or (I suspect) you actually do know, but just don’t want to admit it. Nowadays, to many people, the fastest path to becoming a top-level manager at a regular company is to become a consultant (or a financier) for awhile and then bail out to take a senior management position. Slogging away as a low-level employee does not seem to be a winning proposition. </p>
<p>Again, consider the haunting words of Nicholas Pearce:</p>
<p>*Even at M.I.T., the U.S.'s premier engineering school, the traditional career path has lost its appeal for some students. Says junior Nicholas Pearce, a chemical-engineering major from Chicago: “It’s marketed as–I don’t want to say dead end but sort of ‘O.K., here’s your role, here’s your lab, here’s what you’re going to be working on.’ Even if it’s a really cool product, you’re locked into it.” Like Gao, Pearce is leaning toward consulting. “If you’re an M.I.T. grad and you’re going to get paid $50,000 to work in a cubicle all day–as opposed to $60,000 in a team setting, plus a bonus, plus this, plus that–it seems like a no-brainer.” *</p>
<p>Now, as I said before and I’ll say again, I am hardly a fan of the consulting or (especially) the finance industry, which I tend to view with great suspicion as being largely parasitical. In fact, I largely agree with former McKinsey consultant James Kwak where he states that "“It’s a lousy job, and not nearly as exciting as the recruiting pitch makes it out to be, but it’s a good thing for your resume if you actually want to be in the business world.” The fact of the matter is, for whatever inexplicable reason, the business community is impressed with the major consulting and banking firms, which is why they keep paying such large fees to hire them, and why they having that brand on your resume is such a powerful draw. </p>
<p>Or even if you disagree with myself and Kwak that the business community, perhaps foolishly, is indeed impressed with the consulting/banking brand names, what is surely undeniable is that those firms market themselves extremely well to students. Frankly, they’re the recruiters that tend to hold the best events and best pitches which cater to the desires of the students in a way that regular companies can’t or won’t. </p>
<p>Again, as a case in point, one has to ask why, before the recession, nearly half of all MIT students who entered the workforce took jobs in consulting or finance? Let’s face it - the vast majority of MIT students are interested in technology and science, for that is after all, what tends to attract those students to the school in the first place (and, frankly, if you’re not interested in science/technology, you shouldn’t go to MIT, as you’ll suffer through 4 years of misery and may not even graduate at all). Hence, you would think that most students would be taking science and tech jobs, right? So exactly why do such a large proportion of them keep running off to consulting and banking? </p>
<p>The phenomenon is surely even more pronounced at an Ivy. The salary differentials between a consulting/banking job and an engineering position - and the majority of MIT students are engineers - is obviously not as large as the differential between that same consulting/banking job and what a liberal arts graduate would make, and the vast majority of Ivy graduates are liberal arts grads. Put more precisely, an MIT graduate of EECS (which is by far the largest major at MIT) can make a quite decent starting salary just as a regular engineer - a salary that might equal, or perhaps even exceed what he might make as a consultant in his first year. But, honestly, how much is an Ivy English major going to make in a regular job? The interest to switch to consulting or finance is surely more pressing. </p>
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<p>This is such a dated flashback to the 1990’s - with the notion that with the rise of easy telecommunications and Internet technologies, people will simply scatter to the four winds and complete all of their tasks remotely. If anything, the cities that I mentioned have become even more desirable, because people have quickly discovered the limits towards remote tele-work, largely because it involves simply work. On the other hand, when you want to enjoy life and have things to do, you have to be where there are actually things to do and people with which to do them. For example, if you want to go to a nice restaurant, you need to be in a place that has nice restaurants. If you want to go barhopping and clubbing, you have to be in a place where there are bars and clubs. If your interests skew towards more cultural fare such as museums or theater, you have to be where there are actual museums and theaters. If you want to watch live sports, you have to be where they play live sports. And if you want to do any of that with friends, you and your friends all have to be where those locations are. </p>
<p>Trust me, I lived in the boonies for many years, where, sure, you can complete your work remotely, but afterwards, there is nothing to do. Doing nothing more than watching TV and surfing the Internet - that gets old quickly. It’s especially problematic if you want to meet new people. Heck, even if you utilize Internet dating/socializing, eventually (one would hope) you will actually have to meet the person. What if you find out that they’re many hours away - what are you going to do now? </p>
<p>The grave irony is that Pizzagirl almost caught herself, when she said that her company didn’t care if her brain was located in Chicago - hence, admitting that she is in Chicago, which is also a very nice place to live. That’s the point. Notice how the cities of the country haven’t emptied themselves as all of their denizens haven’t all moved to the boonies. Again, people want to be where there are things to do. {But notice that I said that she -almost- caught herself, as if she actually had, she would have undercut her own narrative that since work can be completed remotely, there is no need to live in desirable areas.} </p>
<p>To those who disagree, again I would ask, why exactly are living costs so expensive in those desirable cities? The reason why landlords can charge $2500 a month for Lilliputian-size apartments in NYC is because people are actually willing to pay that. But why, unless NYC was actually a desirable place to live with numerous things to do? Are tenants just being dumb by throwing their money away?</p>
<p>In fact, I would advance the notion that the opposite hypothesis is true - that the advent of telework actually increases the desirability of the nicest areas. Let’s face it - in the old days you had to be near your job, and that often times meant being located near a remote office park or operations facility. Even today, many jobs are located in relatively undesirable locations. Telework breaks the geographic link between work and leisure, meaning that you can choose to live in a nice area with a proliferation of things to do that you find interesting without regard for exactly where your employer is located. </p>
<p>The bottom line is that expensive places are expensive for a reason, which is that, for whatever reason, a lot of people want to live there. If nobody wanted to live there, then those places would not be expensive.</p>
<p>Again, nobody is saying that there aren’t sucky jobs everywhere. But there is a difference between a sucky low-paid job and a sucky well-paid job. Finance and consulting jobs might well be sucky, but at least they’re well paid. If your job is going to suck anyway, you might as well be paid for the privilege. </p>
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<p>No we’re not. At least I am not. I am simply talking about the “desirability” of a Fortune 500 job, any Fortune 500 job. My point stands - many (probably most) Fortune 500 jobs are not that great. Almost all of us could have dropped out of high school to work for a Fortune 500 company, by working for Walmart or McDonalds. It’s not that hard to obtain that kind of Fortune 500 job.</p>
<p>The takehome point is that a Fortune 500 job offer, by itself, is neither a particularly impressive nor a particularly difficult feat. What matters is the nature of the job. But that speaks to the same problem: most of the ‘office-type’ college-level entry worker jobs in the Fortune 500, frankly, aren’t that desirable either. </p>
<p>I wish they were. As I said before, if the Fortune 500 would increase salaries and provide better working conditions, then surely more people would take their jobs. But, for whatever reason, they refuse to do so. That’s why many of the best grads don’t really want to take their jobs. Sad but true.</p>
<p>Well, data is hard to find, and is confounded by salary differentials. For example, those waitresses I know would surely quit to take office jobs that paid $100k a year. Since white-collar jobs do tend to pay substantially better than blue-collar jobs, obviously people will switch for that reason alone. However, when the (ostensible) pay is roughly equivalent, that’s when the analysis becomes complicated. One major problem with white-collar work is that it tends to be salaried, which means that you can and often times are forced to work extra hours, for no extra pay. Blue-collar jobs are almost always wage-based, so for every extra hour you work, the more money you make, and so blue-collar workers can often times make more money than the white-collar workers who are ostensibly being paid more. {Reminds me of the Dilbert strip where the engineers were shocked and dismayed to find that the office custodian was making substantially more than they were while working far fewer hours.} </p>
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<p>Sure, but the behavioralists have also verified the nearly-universal cognitive bias that people are not self-aware - specifically that people think that more money will make them happy, even if it actually doesn’t. More specifically, people exhibit the cognitive bias that while they may think that money might not make other people happy, they are the exception to that rule. {In the same way that most people tend to rate themselves as being above-average drivers, which is obviously impossible.} </p>
<p>This is surely particularly true of 22-year olds fresh out of college. Let’s be honest - how many fresh college graduates do you know have actually developed a strong sense of self-awareness, including knowledge of their own cognitive faults? These are precisely the type of people who are most likely to choose the higher paying consulting/banking job than the lower-paying standard corporate job. </p>
<p>Now, I agree that as people become older and wiser, they may indeed discover that the lower-paying job may offer greater satisfaction, and hence quit the higher-paying job. But that’s beyond the scope of the WSJ article, which was looking solely at who is hired right out of college and where. Nowhere does it discuss disillusioned and exhausted consultants and bankers who have decamped to the corporate sector.</p>
<p>The fact is, a new college graduate, whether from a top school or an average one, is probably going to choose the higher-paying, more prestigious job offer if given the choice. Whether they should be making that choice is a different question altogether. This thread is ultimately about what people actually do, not what they should do.</p>
<p>I don’t think anybody has ever said that people necessarily want to live in the Northeast, and I specifically advanced the example of San Francisco which is obviously not in the Northeast. </p>
<p>What I said was that expensive places are expensive because they are desirable, and the example of your son only exemplifies the point. Some places are more desirable than others because they offer things to do and a pleasant lifestyle. People are willing to pay more to live in those places. </p>
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<p>No, but people would like to be VP as quickly as possible, and, whether right or wrong, people view certain career paths as offering a faster trajectory towards becoming VP. </p>
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<p>If these jobs really were considered so great, then why isn’t there an inexorable clamor towards garnering those jobs? Why aren’t college students forming exclusive clubs that even have their own ‘admissions processes’ that prepare students for jobs at Walmart, Target, or other Fortune 500 firms? Why don’t the recruitment tables for the Fortune 500 firms snake around the hallway and even spill into the street the way that they do for the consulting and banking firms, if jobs at those firms were truly so desired?</p>
<p>Frankly, this is starting to sound like the guys I know that are out-of-shape, don’t dress well, and lack anything interesting to talk about, and who then wonder why they have difficulty meeting women, who seem to prefer the dapper, fit guys who can offer great conversation. Sure, the former guys might actually be an better long-term fit for those women. But that doesn’t matter because they can’t attract them in the first place.</p>
<p>Like I said before, if the Fortune 500 firms want to attract graduates from top schools away from consulting, banking, and other professions, they need to pay better and offer better working conditions. The banks are paying record bonuses this year. Why can’t the Fortune 500? The consulting firms offer opportunities to work on a wide range of projects while traveling around the world (which is attractive to many fresh college grads). Why can’t the Fortune 500? The consulting and banking firms provide a tried-and-true 2-3 year fast path to top MBA programs, another highly attractive perk to many fresh college grads. Why can’t the Fortune 500? </p>
<p>If they can’t or don’t want to offer that, then that explains why many of the best college grads don’t really want to work for the Fortune 500, at least, not immediately out of college.</p>
<p>Have you checked lately on the percentage of college grads who are getting ANY job? Have you read the thread by legendofmax (Penn Wharton '09) who was sleeping on the floor of someone’s house in Austin and had NO money, No car and NO good prospects for many months? You think a lot of grads aren’t grateful and making the most of jobs with P&G, DirectTV, Healthways, BAE, Texas Instruments etc? Why do you define corporate America as being Walmart and McDonald’s?</p>
<p>I’m GLAD so many people want to live in NYC. It keeps them out of Nashville and Denver!</p>
<p>Those consulting jobs are far from what you picture. You are away from home 6 or 7 days a week working 18 hours a day doing grunt work and sleeping in a hotel. At least that’s what people we hired who worked at McKinsey (Harvard and Penn MBAs) a few years said. It was a horrible no life grind. They were glad to get a normal job with only 40-50 hours a week and a life.</p>
<p>"Because office buildings generally are cleaned while they are empty, many cleaning workers work evening hours. Some, however, such as school and hospital custodians, work in the daytime. When there is a need for 24-hour maintenance, janitors may be assigned to shifts. Many full-time building cleaners worked about 40 hours a week in 2008, but a substantial number worked part time. Part-time cleaners usually work in the evenings and on weekends.</p>
<p>Most building cleaning workers work indoors, but some work outdoors part of the time, sweeping walkways, mowing lawns, or shoveling snow. Working with machines can be noisy, and some tasks, such as cleaning bathrooms and trash rooms, can be dirty and unpleasant. Building cleaning workers experience injuries more frequently than workers in most other occupations. They may suffer cuts, bruises, and burns from machines, handtools, and chemicals. They spend most of their time on their feet, sometimes lifting or pushing heavy furniture or equipment. Many tasks, such as dusting or sweeping, require constant bending, stooping, and stretching. Lifting the increasingly heavier mattresses at nicer hotels in order to change the linens can cause back injuries and sprains."</p>
<p>"Food and beverage service workers are on their feet most of the time and often carry heavy trays of food, dishes, and glassware. During busy dining periods, they are under pressure to serve customers quickly and efficiently. The work is relatively safe, but injuries from slips, cuts, and burns often result from hurrying or mishandling sharp tools. Three occupationsfood servers, nonrestaurant; dining room and cafeteria attendants and bartender helpers; and dishwashersreported higher incident rates than many occupations throughout the economy.</p>
<p>Part-time work is more common among food and beverage serving and related workers than among workers in almost any other occupation. In 2008, those on part-time schedules included half of all waiters and waitresses and almost three-fourths of all hosts and hostesses.</p>
<p>Food service and drinking establishments typically maintain long dining hours and offer flexible and varied work opportunities. Many food and beverage serving and related workers work evenings, weekends, and holidays. The long business hours allow for more flexible schedules that appeal to many teenagers who can gain valuable work experience. More than one-fifth of all food and beverage serving and related workers were 16 to 19 years old in 2008about six times the proportion for all workers."</p>
<p>"Most engineers work in office buildings, laboratories, or industrial plants. Others may spend time outdoors at construction sites and oil and gas exploration and production sites, where they monitor or direct operations or solve onsite problems. Some engineers travel extensively to plants or worksites here and abroad.</p>
<p>Many engineers work a standard 40-hour week. At times, deadlines or design standards may bring extra pressure to a job, requiring engineers to work longer hours."</p>
<p>"Most accountants and auditors work in a typical office setting. Some may be able to do part of their work at home. Accountants and auditors employed by public accounting firms, government agencies, and organizations with multiple locations may travel frequently to perform audits at branches, clients’ places of business, or government facilities.</p>
<p>Almost half of all accountants and auditors worked a standard 40-hour week in 2008, but many worked longer hours, particularly if they are self-employed and have numerous clients. Tax specialists often work long hours during the tax season."</p>
Eh? Look, I’m viewing at this thread from the perspective of a prospective student. If the state school offers job opportunities that will ultimately provide me with the same level of happiness (as the WSJ article implies), then why do I care whether I might choose to take a consulting job if I attended the Ivy?</p>
<p>Sure, they’re grateful now. But what happens when the economy recovers, as it surely will someday? These are precisely the people who will bolt onto (perceived) greener pastures. </p>
<p>I also agree with you that there are plenty of Ivy graduates who can’t get a job…just as there are plenty of graduates from average schools who can’t get a job. That’s a wash. </p>
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<p>I never said anything about people only wanting to live in NYC. Your statements are only proving the point, as Nashville and Denver are also nice places to live! It is significantly more expensive to live in/near Nashville than to live in the rural regions of Tennessee. So why does anybody continue to pay the premium to live in Nashville? Are they all just stupidly tossing money away. I think not - the rationale is precisely what you said before, Nashville has things to do, such as the Grand Ole Opry and other music venues, professional sports such as the Titans and the Predators, museums and performing arts centers, and the like. In the boonies, in contrast, there’s nothing to do. </p>
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<p>Nobody is saying that these jobs aren’t grinds, and in particular that the travel isn’t strenuous. That’s why I chose to use the word ‘perceived’ when it comes to the ‘perk’ of travel. Let’s face it, to the average new college graduate, a job involving extensive travel seems like fun, especially to somebody who has never really traveled before (as most college students have not). You take a young guy who has lived in perhaps only 1 or 2 places before in his whole life, and you tell him that he will have a job where he can see the world, traveling to cities that he has only read about or seen on TV - that’s going to sound tremendously appealing to that guy. </p>
<p>{By the same token, this is one of the standard pitches that the military uses when it recruits prospective soldiers - they offer the opportunity to see the world. Here’s the Navy’s recruiting pitch:</p>
<p>*Whether it’s the areas you’ll travel to for training, the destinations you’ll visit while deployed or the locales that you’ll work out of and call home, the Navy will take you places others only dream of going. Expanding your boundaries. Enhancing your experiences. Opening you up to a whole new world…</p>
<p>Want to see the world? Check out the list of exciting ports of call across the globe, like Alexandria, Egypt; Rio de Janeiro; or Misawa, Japan, where you could find yourself as a member of America’s Navy.*</p>
<p>Of those joining the Navy, most have said their main reason is for the training opportunity, “and that’s always number one,” Pennington said. Next, they want to travel and see the world.</p>
<p>Note, it doesn’t matter whether the travel in the consulting industry or the military is as glamorous as they claim it to be. What matters is that candidates think it’s true. They think the travel will be interesting and educational. Whether wisely or foolishly, many young people seem to want traveling in their first jobs. </p>
<p>Which then begs the question - why don’t Fortune 500 companies offer more travel opportunities to new hires? Most such companies have numerous office locations through which they could rotate new employees. So why don’t they? </p>
<p>Instead, what generally happens is that as a new hire at a Fortune 500 firm, you’re assigned to one office at one location, with few if any opportunities to travel. Travel is seen as a perk that you have to earn only through years of climbing through the ranks. How do you think that makes those employees feel, especially when they see their former classmates traveling around the world as consultants?</p>
<p>I know guys who have never lived outside the Northeast, and who took a regular jobs in that same region, and now deeply lament the fact that they can’t leave their office. Meanwhile, their classmates who took consulting jobs have, in just one year, have already worked in California, Chicago, Seattle, Texas, and in some cases, even Europe and Asia. Those guys want to see those locations, yet they’re not being allowed to do so, as their employers have chained them to their offices and travel is not “within the budget”. {Even more poignantly, some of those very same employers have paid to fly in consultants from around the country, but won’t pay to send those guys anywhere.} </p>
<p>The point is that a traveling job seems glamorous. It seems interesting. Whether it actually is glamorous or interesting is an entirely different question. </p>
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<p>Like I said, if the (hourly) pay between a white-collar job is substantially higher than that of a blue-collar job, then obviously people will prefer the white-collar job. It is therefore no surprise that people tend to prefer to be engineers or accountants over waitresses or janitors. {Note, the Dilbert example is just an exaggeration, as all Dilbert comics are. Dilbert is funny because it exaggerates the dysfunctional dynamics inherent to many work environments, but nobody is saying that you should manage your career simply on the whims of a comic strip.} </p>
<p>But we’re not talking about engineers or accountants. We’re talking about people with liberal arts degrees. As I said, people with those degrees make only $35k a year to start, which, frankly, is not much at all. You can make almost that much money working 40 hours as a waitress, once tips are factored in. {Note how the BLS figures do not include tips, which represent the majority of pay for waitresses.} Granted, maybe they should have majored in engineering or accounting instead. But what’s done is done; they have liberal arts degrees, only to find that regular companies won’t pay them well for that degree. Is it really any wonder that Ivy liberal arts grads would then prefer to take jobs in lucrative banking or consulting? </p>
<p>Given the choice between similarly (hourly) paying blue and white-collar jobs, many people would probably prefer the blue-collar job, for one simple reason: you are paid for every hour you work. White-collar jobs are generally salaried, which makes them exempt from overtime. Many employers know that fully well, which means they can and do demand that employees sacrifice nights and weekends for no extra pay. In contrast, the longer you work as a waitress, the more money you make. That’s a pay system that, frankly, white-collar workers ought to have. If I’m forced to forfeit my weekend in the office, I should at least be able to console myself by counting the extra money I made. </p>
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<p>Eh? I am also looking at the thread from a perspective of a prospective student - and the key is that the student probably *doesn’t know (or doesn’t believe) * that more money won’t translate into greater happiness. </p>
<p>You raised the results of behavioral research, and I am doing likewise. One of the fundamental discoveries of behavioral research is that people don’t think that general rules apply to them. They tend to think that those rules apply to others, but that they are the exception. That is why most people consider themselves to be above-average in most regular tasks such as driving, even though it is obviously logically impossible for most people to actually be above-average. </p>
<p>In short, everybody thinks that they’re special. In many ways, that’s beneficial to society. For example, the fact of the matter is, the vast majority of startup companies fail, so from that standpoint, it’s irrational for anybody to ever start one. But all entrepreneurs think they are going to be the exception: that the observation that most startups fail applies to other people, but not to them. If that wasn’t true, there wouldn’t be a Microsoft, Apple, Google, or Facebook. Similarly, the chances of becoming a star athlete or movie star are very slim, but prospective athletes or actors think that they will be the exception. Otherwise, we would have no Peyton Manning or Brad Pitt. </p>
<p>So when a college applicant learns that more money doesn’t equate to greater happiness, he’s going to think that that rule applies to other people, but not to me. That’s why he will tend to prefer higher paying careers.</p>
<p>But if you still disagree with my analysis, that’s fine. But the fundamental question still remains unanswered: why (during the boom years) did such a large proportion of graduates from the top schools choose banking and consulting? If everybody truly understands that greater money doesn’t bring them happiness (and that that rule applies not only to other people, but also to them), if Fortune 500 companies truly do offer such desirable career opportunities, if travel really is not such a desirable perk (and everybody understands that), then why do so many of those graduates take jobs in consulting or finance? Clearly something is attracting them. </p>
<p>*Among men who are entering the workforce next year, 58 percent are taking jobs in the finance and consulting industries. Among Harvard women in the workforce, only 43 percent are going into finance and consulting.
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We’re not? WSJ focused all of their major-specific rankings on professional fields such as engineering, accounting, and communications. Even the overall ranking was based on “feedback from large public and private companies in nearly 30 industries, including finance, consulting, technology, engineering, marketing and health care, as well as nonprofits and government agencies.” I’m guessing that these industries heavily favor professional majors.
I’m still not convinced, but this point is on a bit of a tangent.
The problem here is that you are really looking at this thread from the perspective of a sociologist, HR manager, or college administrator attempting to predict what students as a whole will do. From that perspective, I completely agree with all of your arguments. However, that isn’t what a future student should be concerned with. They should be focused on trying to achieve the best future possible.</p>
<p>I can make an analogy: many students smoke cigarettes. Many of them started smoking because they thought it would make them cool or popular. Does that mean that a student trying to decide whether to smoke should go ahead and light up? Of course not. The irrational behavior of others shouldn’t necessarily dictate what the student chooses to do.</p>
<p>Now, the analogy is imperfect because I have never heard of anyone getting lung cancer or emphysema from choosing to attend Yale over Minnesota. But I think my point should still be clear.</p>
<p>Do we? Given the choice between a blue-collar and white-collar job that paid the same on an hourly basis, would you prefer the blue-collar job because you’re paid for every extra hour you work? </p>
<p>Now, granted, some people would not make such a choice. But some would. Which gets to my point - it’s not that attractive for a liberal arts grad to be making only $35k a year. Like I said, it’s hard for me to make the case to that waitress who makes over $30k that she should take a corporate job that would pay her only $35k and have her sometimes forfeit nights and weekends for no extra pay. If you would try to make that case, you’re welcome to do so. {If the job would pay her the equivalent of an accountant or engineer, then you might be able to make the case, but they’re not going to pay her that. Granted, maybe she should have majored in accounting or engineering, but that’s no longer on the table.} </p>
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<p>And the problem is that most Ivy grads are liberal arts grads, not preprofessional majors.</p>
<p>Let me put it to you this way: take an Ivy liberal arts grad, and were given the choice between making $35k a year in the standard liberal arts corporate job, or going to consulting/banking, what do you think they will prefer?</p>
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<p>But that’s not the way that people think, and probably never will. If you are advocating that people ought to behave more rationally, well, all I have to say is that you have a very long, probably losing, fight ahead of you. People are irrational, and probably always will be.</p>
<p>And, like I said, I’m not sure that that’s a bad thing. If people were always rational, nobody would ever start a company, try to become a movie actor, or run for President of the United States, as all of these endeavors are low-probability endeavors. There is something to be said for hope. </p>
<p>Ultimately, this thread is about why large companies may tend to prefer state-school graduates over graduates from Ivy-Plus schools, which was the focus on the WSJ article. My (and others’) hypothesis is that graduates from the Ivy-Plus schools don’t really want to work for those companies, instead preferring other opportunities such as consulting, finance, law, medicine, entrepreneurship, and so forth. Now, maybe you’re right and such a preference is a consequence of irrationality that will not translate into ultimate future happiness. But that’s not the point, for the point is not to explain what people should do, but rather what people actually do. If those Ivy-Plus graduates tend not to want to work for regular companies - however irrational you may think that is - then that explains why those recruiters do not reciprocate. </p>
<p>Allow me to pose the same fundamental question I posed before: if corporate jobs were really so desirable, then why, during the boom times, did half of Harvard and MIT graduates (and I suspect graduates from other top schools) who entered the workforce choose consulting or finance?</p>
<p>I suspect one reason corporate recruiters may not find graduates of certain elite privates so desirable is that a significant proportion of them come in with the attitude that they are somehow “better” than the corporate world—the attitude reflected in the series of posts above. Fine for these children of privilege, perhaps, when a totally out-of-control Wall Street was throwing bales of money after them, recklessly trusting these neophytes to play with other people’s money. We’ve seen where that ends. Those days aren’t coming back—and a good thing, too.</p>
<p>And what now for our little geniuses? Well, MIT’s Career Office reports that while “in 2007, Morgan Stanley, Lehman Brothers, JP Morgan, and Goldman Sachs were among the top ten employers of MIT graduates,” now “only JP Morgan remained in 2009.” The others were replaced in 2009 by “a diverse mix” of employers including “MIT, McKinsey & Co, Exxon Mobil, Booz Allen Hamilton, Merck, Oracle, and Intel.” Hmmm . . . lots of corporate jobs in that mix. Meanwhile, 40% fewer companies recruited at MIT in 2009 than in 2007, fewer MIT grads found jobs, and many of those who did settled for lower salaries than in the past. MIT also reports an uptick in the percentage of its graduates going directly from undergrad to grad school, which the Career Office speculates may be related to weak job prospects for those going onto the job market.</p>
<p>In that climate, I think an attitude of smug superiority toward corporate jobs does not serve its wearer well. And it may be that some corporate recruiters have just decided not to bother with some schools where such attitudes are prevalent.</p>
<p>They’re not? Like I said before, Wall Street is back to paying record bonuses. </p>
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<p>And I return to my (admittedly controversial) point from early in the thread: they are better than those corporate jobs. But not just them - I think that all<a href=“or%20at%20least%20the%20vast%20majority”>/i</a> of college graduates, regardless of school, are better than the corporate jobs they receive, for one simple fact: ** those corporate jobs aren’t that good. For anybody.* </p>
<p>Come on guys, you know what I’m talking about. Many corporations stick talented college graduates, regardless of whatever school they may have graduated from, into dead-end, low-paying mind-numbing jobs. I might sympathize if companies were performing poorly, but in the latest quarter, corporate profits hit an all-time record (nominal) high. </p>
<p>* The takeaway for the bulls is that the $1.4 trillion in annualized profits reported in the second quarter of 2010 were a nominal all-time high .*</p>
<p>Corporations therefore could pay all of their employees better. They could improve their work conditions. They just don’t want to. That is why I maintain the position that college grads - regardless of school - are better than the jobs they are receiving. They all deserve better. Again, if even a waitress or a high-school dropout with a modicum of IT skills can make $30k, I don’t think it is outrageous to posit that the average liberal arts grad should be making more than $35k. </p>
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<p>Actually, I would argue that it is this sort of attitude expressed in your post that is the most corrosive, for it ensures that nothing will ever change. Corporations will continue to pay lousy salaries for mediocre, dead-end jobs despite generating record profits, and anybody who demands a better life is derided as being “smug” or sarcastically referred to as “little geniuses”. No, they simply have high expectations for themselves and their careers, as all employees ought to have. They don’t want to settle…and neither should anybody else. </p>
<p>Frankly, I’m stunned at the mentality being expressed. Are you guys really going to champion the corporations? Remember, these are the very same corporations who have laid off millions of Americans in the last few years, all while continuing to pay millions to their executive management. And you want to take their side? </p>
<p>Look, I’m hardly a fan of the financial industry. But I must give credit where credit is due - they are paying record bonuses to their employees as their profits have (perhaps inexplicably) also hit record levels. But regular corporations have also been enjoying record profits, so why aren’t they paying record bonuses to their employees? </p>
<p>I find it sad that we’ve devolved to a state where corporations can make record profits, but employees who want a share of those profits are derided as pampered elitists. The logic seems to be that the managers of those companies who refuse to increase employee pay are not elitist, rather it’s those employees who want higher pay that are somehow the elitists.</p>
<p>As my blunt-speaking neighbor used to say: “Don’t get so used to eating shi* that you learn to like it.” When regular companies refuse to improve the pay and work conditions of their employees, why would you find fault with those people who want something better?</p>
<p>And to those detractors of mine who would still want to argue that those Ivy/MIT students are elitist for wanting more than what corporations are willing to provide, how do you take that position without implicitly endorsing the practices of corporations? Frankly, I don’t know how you get around that. Corporations could be paying record salaries from their record profits, but they won’t, and you’re going to defend that practice? Seriously?</p>
<p>Sakky- you are so wrong on so many levels that I am not even going to bother…</p>
<p>Record profits? Have you been living under a rock? It’s a friggin’ RECESSION! There’s a little publication you might have heard of. It’s called the Wall Street Journal. Check out the earnings releases.</p>
<p>But that’s actually just a minor point. The far more important point is below.</p>
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<p>Now I can only feel embarrassed for you. I read the WSJ every day, and it is now clear that you don’t, for it is precisely the Wall Street Journal, along with every other business publication that has been reporting the lavish profits that the corporate sector has been raking in lately. That’s right: ** high profits**, in fact, some of the highest on record. </p>
<p>To give you just a taste:</p>
<p>Newsweek:</p>
<p>*Corporate bosses are whining, even though they’re reporting record profits…</p>
<p>Corporate profits, which stood at $1.5 trillion in 2007, fell sharply to $1.26 trillion and essentially stagnated in 2009. But since the Obama presidency started, the trajectory in quarterly profits has reversed. Quarterly profits (reported at an annualized rate) rose from $1.18 trillion in the second quarter of 2009 to $1.42 trillion in the fourth quarter of 2009 to $1.64 trillion in the second quarter of 2010. In the second quarter of 2010, corporate profits were up 39.2 percent from the year-before quarter.</p>
<p>Corporate profits aren’t just rising in absolute terms, they’re rising in relative terms. Corporate profits as a percentage of GDP are back up to nearly record highs. Check out this assemblage of quarterly GDP data for the last several years. If you divide line 17 (corporate profits with inventory and capital-consumption adjustments) into line 1 (overall GDP), you can calculate corporate profits as a percentage of GDP—i.e., the chunk of the economy that corporations are keeping as profits. If companies and business were under assault, you might expect that this proportion would be falling. But as the chart here shows, that’s not what is happening.</p>
<p>After hitting a low point in the fourth quarter of 2008, the measure has risen in every quarter and checked in at 11.25 percent in the second quarter of 2010—the highest level since the last quarter of 2006. In other words, the chunk of the economic pie being reserved for business owners and bosses has been growing sharply in the past couple of years, despite slow growth, and is generally back at the levels it was during the business-friendly Bush administration.*</p>
<p>*“To say that earnings so far have been off the charts would not be too much of an exaggeration,” said Robert C. Doll, global chief investment officer for equities at BlackRock, the investment management firm.</p>
<p>Of the companies in the Standard & Poor’s 500-stock index that have announced first-quarter results, 77 percent have beaten Wall Street earnings forecasts. And profits for the quarter are on track to grow 56 percent compared with the 2009 period*</p>
<p>*Corporate profits are near their pre-recession peak, according to a report released today by the Bureau of Economic Analysis. The numbers were released alongside revised estimates for second-quarter gross domestic product.</p>
<p>Profits from current production (corporate profits with inventory valuation and capital
consumption adjustments) increased 4.6 percent in the second quarter. The growth was not as strong as that in the first quarter, but it was still 39.2 percent higher than its level a year earlier.</p>
<p>And six straight quarters of growth mean that corporate profits today are almost as high as their peak before the downturn began, in nominal terms:*</p>
<p>*According to the St. Louis Federal Reserve, corporate profits hit $1.37 trillion in the first quarter – an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter and is up by 13 percent against 2009. And the Obama administration has cut taxes for small businesses and big ones alike. Maybe the president could be anti-me for a while. I could use the money.</p>
<p>The reality is that America’s supposedly anti-business president has led an extremely pro-business recovery. The corporate community has recovered first, and best.*</p>
<p>TYLER COWEN has been asking bloggers to explain why, if a demand shortfall is the explanation for the American economy’s continuing limpness, corporate profits are so high…</p>
<p>*Just a week into second-quarter profits and it’s clear America’s biggest businesses are humming again. Blue-chip names including Alcoa Inc., Intel Corp. and Google Inc., are hitting high notes and entire industries including airlines, tech and railroads are expected to follow. *</p>
<p>{I’d give you many more WSJ articles, but for the paywall behind which they hide most of their bet content.} </p>
<p>So, please, MomofWildChild, I recommend that you actually read the business news. It’s frankly embarrassing that you would tell me to read the business news, when not only do I do so diligently every day, but that you clearly have not. Understand that the corporate sector has enjoyed a record-setting rebound in the last year. Why that hasn’t translated into actual job growth and wage increases is now a topic of intense debate. But what is not debatable is that corporations clearly have the money to do it.</p>
<p>Here’s an op-ed that former Secretary of Labor Robert Reich wrote discussing precisely this seeming paradox.</p>
<p>Corporate profits, led by the financial sector and many large Fortune 500 companies, have recovered, but rather than hire new workers or build new machines, companies are parking on a record $1.8 trillion pile of cash. Why? Blame it on low demand, blame it on Europe, blame it on Obama’s new reforms, blame it on nervous CEOs, blame it on globalization’s impact on structural employment … you can make good arguments for all of them…Many companies are running healthy profits on top of the unhealthy labor market by squeezing productivity – that’s output/hour – out of their leaner payroll. How do you fix this?</p>