Monday, February 3, 2014
Roose, Young Money
You’re a college student with a yen to go to Wall Street and become a master of the universe. Well, you might want to rethink your dream. In Young Money: Inside the Hidden World of Wall Street’s Post-Crash Recruits (forthcoming, Grand Central Publishing, 2014) Kevin Roose profiles eight of the seemingly lucky ones. Most of them got two-year contracts as analysts in the investment banking divisions of major Wall Street firms. Although they knew the work would be demanding, they started off full of excitement and determination. Soon enough reality set in.
The problem wasn’t simply the long hours first-year analysts are expected to put in. It was the lack of control of the hours. “At-will scheduling is the bane of the young analyst’s existence. It means that every evening activity is subject to last-minute cancellations, that stress-free vacations and personal trips out of town are impossible, and that work-issued phones function as permanent third limbs.” (p. 40) Why the hundred-plus hour weeks of on-call work? They are, people told Roose, “one half of a grand, unspoken social contract that had existed on Wall Street for decades. As part of the basic bargain, analysts were asked to demonstrate full loyalty to the firm by becoming a slave to its demands. In order to fully belong, the first-year analyst had to realign his priorities, replacing his own with his bank’s. And seen in this light, all the young banker’s cancelled dinners and broken relationships aren’t just unpleasant externalities—they were central to the process.” (p. 107)*
Another problem the young recruits faced was that “Wall Street … makes its workers feel expendable; many entry-level bankers conceive of themselves as lumps of flesh who perform uncreative and menial work. “ (p. 43) They are nothing like those senior investment bankers described in the 1976 book The Financiers who have lavish offices and dress in expensive suits and who are the “richest wage earners in the world.” Today the offices of the young bank analysts “are covered in moldy takeout containers and pit-stained undershirts. They dress in whatever is left in the clean laundry bag from last week, and haven’t seen sunlight in two months. They make pitch books for clients who will never read them, and get yelled at for improperly aligning cells in Excel, all in hopes of a year-end bonus number that won’t make them want to jump in front of the 4 train. They are the young investment bankers of Wall Street, and they just want some sleep.” (pp. 43-44)
Some of these young analysts became almost morbidly depressed. One coped with the help of a countdown clock which he set for 336 days—the amount of time between the day that his equally miserable Goldman friend gave him the clock and when he estimated the following year’s bonuses would be paid. Although he might not be able to handle an entire career at Goldman, he figured he could make it through 336 days.
In some cases the unhappy analysts plotted their escape to ostensibly greener pastures, like Silicon Valley. In other cases they failed to make the grade and got their walking papers after their two-year stint. Still others decided to tough it out and remain in finance. In fact, according to one headhunter, “only 10 percent of young Wall Street workers ever leave to work in a completely different industry.” (p. 225)
Roose’s book focuses on the toll that Wall Street took on these young financiers. Over the three years that he tracked them, they changed in troubling ways. “I’d seen most of them become less happy and optimistic, more cynical and calculating. They were slower to smile and quicker to criticize. Many of them began to talk about the world in a transactional, economized way. Their worlds started to look like giant balance sheets, their appetite for adventure waned, and they viewed unfamiliar situations through the cautious lens of cost/benefit analysis. … There is, in other words, an enormous cost associated with our nation’s long-standing practice of sending huge numbers of our most promising college graduates into finance. These financiers form an elite class that will go on to become influential in the top ranks of government, technology, and culture. And if they all share the experience of having spent their formative years working as entry-level bank analysts, performing and internalizing the ethos of the financial sector, it means that, in a way, we’ve allowed Wall Street’s culture to enter our national bloodstream. It’s the consequences of that cultural contagion—and the genuine misery I saw Wall Street inflict on so many young people—that makes me glad that the financial sector is smaller and less dominant now than it was before the crisis.” (p. 234)
*James Surowiecki, in his January 27 “financial page” for The New Yorker, addresses the changing cult of overwork. He writes: “Grinding out hundred-hour weeks for years helps bankers think of themselves as tougher and more dedicated than everyone else. And working fifteen hours a day doesn’t just demonstrate your commitment to a company; it also reinforces that commitment. Over time, the simple fact that you work so much becomes proof that the job is worthwhile, and being in the office day and night becomes a kind of permanent initiation ritual. The challenge for Wall Street is: can it still get bankers to run with the pack if it stops treating them like dogs?”