Im sure a ton. First year investment banker associates work 80-100 hours/week.
That comes with the territory.
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Yes, if your grades stink or or a complete interview mess, you’re not getting a job. That’s a given for everything in life.
Im talking about percentages and the likelihood you can land a job at a top firm increases if more firms recruit at your school.
I’m pointing out that even with TOP grades an offer isn’t guaranteed.
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I do think that mushing together “most STEM students” into one pile is imprecise. However, the overall message (you won’t be paid that well) is most likely correct for most students.
I have wondered whether how salaries vary between the kid who majors in Bio because they want to get into medical school and who does not get accepted anywhere versus the kid who majors in Bio because they discover that they absolutely love lab work and want to do it. The former might have a lot of experience volunteering in a hospital while the latter might have a lot of experience with internships and research that involves lab work.
I also think that different individual students will have very different expectations, and many will be realistic in their expectations.
Perhaps the most important issue here is one that was mentioned way up front (I think by @ucbalumnus). If students expect to be making a lot of money right after they graduate, they are likely to be too willing to take on debt. We see quite a few posts here on CC where us older contributors (who are probably mostly parents) are trying to discourage students from taking on debt to attend a marginally higher ranked university when their alternative is something like Rutgers or U.Mass Amherst or UT Austin in-state without any debt. Not having any debt, or at least having minimal debt, can be very helpful to the recent graduate.
Of course there is the related issue of kids who expect to go into investment banking making big bucks, and then either do not make it or discover that investment banking might pay well but it is not something that they want to do (long hours under stress are not fun). I for example have a friend who graduated from Harvard Law and went to work for a prestigious law firm in NYC. He lasted one week and discovered that he hated it. Fortunately he had no debt (his father was a big time NYC lawyer) and found an alternative career that paid way less but that does suit him. He could only do this because he graduated law school with no debt.
Certainly for an 18 year old high school senior to assume that he or she will make the big bucks after graduating university and to borrow money with this in mind is a risky strategy that can go very wrong.
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Im not sure where in my posts I said a student is “guaranteed” a job if they go to a top school.
Apologies for using the word “placed” and misleading everyone who thought I meant that kids will automatically get a top job and not have to actually interview, or present themselves well and have some modicum of professionalism.
The table listed in my post showed median tax reported earnings as listed on CollegeScorecard, which is limited to kids in the federal database – mostly federal FA recipients. It’s not a “study.” They may also have 75th percentile earnings in the database stats (don’t remember for certain), but they do not list who percent get offers of >$100k.
The Dale & Krueger quotes from a previous post was from an actual that was study published in peer reviewed journal and has thousands of citations. They compared earnings for kids that applied to and/or were accepted to a similar set of colleges, rather than just looking at salaries of the average kid at the college. They concluded that the college attended typically had negligible influence on average earnings. Far more influential on earnings was characteristics of individual students, particularly whether the student is the type who applies to a highly selective colleges – not whether the student actually attends one. Certain minority groups were exceptions that did not have non-negligible influence on average earnings associated from attending the selective college (not just apply to it), particularly certain URM groups. In any case, this also doesn’t show % of students making >$100k at school x vs school y.
Your original post that started this tangent mentioned going to top 10 business schools and top 10 STEM schools to work at the best companies, rather than “mediocre companies”. Note that I only replied to the comment about “STEM schools”, I did not reply to the comment about top 10 business schools because I don’t question that wall street type “elite” investment banking companies do often emphasize school name. What I question is extending this type of hiring to other industries. Wall Street investment banking hiring that focuses on school name and whether the applicant is from a “top x” target type school is more the exception to how new grad hiring works, rather than rule.
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We don’t know how much he’d receive in compensation in lieu of health insurance because we don’t know how much his insurance costs the company to make that calculation. He might well have received more than $10,000 if he’s on a platinum or family plan. Yes, the compensation is only a percentage of the benefit for the tax reasons you outlined above, but that isn’t the point. The point is that he doesn’t receive “free” insurance from his company. He’s giving up a lot of compensation to receive an insurance plan with no premiums.
We’re all (all meaning Americans) giving up compensation for employer-provided insurance. When I hire contractors, they get a higher hourly rate than my full-time hires. People fail to adequately take that into account when considering their comp offers. No one ever asks “what is the employer’s contribution to my health insurance plan” during initial salary negotiations to accurately compare two competing offers. Our employer-based system is only good for accountants, for limiting plan choice, for adding opacity to healthcare costs, and for retarding worker mobility.
P.S. When I was in sales a company car was a horrible benefit for me compared to itemizing milage. In both instances, because people don’t understand the tax code and opportunity costs, they think a benefit is automatically preferable to a non-benefit. It often isn’t.
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Without actually knowing how many kids get jobs out of certain schools, wouldn’t that create some misleading data points in career placement statistics?
For example, ABC type job pays $100k but XYZ University only has 3 kids who get those jobs because only 3 schools recruit from there vs MIT might have 100 kids get $100k because 100 firms recruit from there.
Earnings are obviously based on the premise that you can actually land a job, which could be substantially higher at a better school if more top companies recruit from those schools.
It might be helpful for you to actually read the Dale and Krueger studies.
Here is the original: Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables | NBER
Here is the followup: Estimating the Return to College Selectivity over the Career Using Administrative Earnings Data | NBER
There’s also quite a bit of interpretation/commentary on the studies that you might also find helpful, just a google search away.
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I did some of my own research and talked to Kevin on facebook and learned that interest doesn’t compound. It is all a plot by JFK Jr to control all of your money.
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Personally, I think starting salaries at a high level are very difficult to measure across the board. IB is a tough field to crack into esp without experience. It’s more likely that kids in a field like IB are higher income than the mean so they might not have any debt. When I worked in this field, people came from very wealthy backgrounds. This might have changed but I’d imagine that there are fewer low income kids than high income who were groomed for high salary jobs by their parents since birth.
I think the graduates from schools which are mentioned all the time as top schools, likely can get a higher starting wage. One thing that no one ever mentions on CC. Even a 5K boost the first year would make an enormous difference over a lifetime in earnings. At the same time, I don’t think you get the Ivy/MIT boost as much as you used to. I’m speaking as someone who benefitted from the Ivy league boost. I think that many schools which are affordable provide an education that provides the skills needed. So a kid who can do a difficult task is in demand whether he attended an Ivy/state school. Parents and wise kids recognize it is worth taking out huge debt to get the same degree from a solid place.
The other thing few mention is soft skills. You can attend Wharton for example, but if you don’t have the communication skills or the interpersonal aptitude, then you likely won’t get that 100K job ( if that’s even your goal in the first place). Kids don’t know if they have those skills until they try to get those internships/jobs. They all think they do, but few do and that’s who’s getting the six figure jobs, kids with combined skills ( soft and hard). And again, many kids sneak in the back door through parental connections. Still happens. Even at a high level, even at a sought after company.
Maybe I am unusual, but I actually paid attention to the benefits when evaluating the compensation associated with a job offer.
The one major advantage to employees of employer-based medical insurance before 2014 was that most employer group plans had guaranteed issue, or guaranteed issue after a waiting period, while individual plans excluded a fairly large portion of the population due to pre-existing conditions (which they mostly had to in order to avoid adverse selection). ACA made individual plans guaranteed issue, but people considering them are still subject to the variation of how many and which ACA individual plans are actually available where they live (not just by state, but by county – for 2018, many counties had only one ACA insurance company option, and a few had none).
A transition away from employer-based medical insurance would be desirable for the reasons you give, but there needs to be a better marketplace of individual plans with more insurance company participation, and probably a universally available baseline plan like buy-in to Medicare.
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I agree with all that. My main point is going to a top school gives you greater potential to better paying jobs.
You get a better network. You may get more companies recruiting the school - you have 30 finance firms that recruit and not 5. You may have an easier time getting an internship. You get more options, maybe multiple job offers.
In the end, job performance trumps all but we’re talking about college graduates and salary expectations (which was the point of the original post).
Also, I only mentioned a couple of types of jobs because most jobs dont pay $100k starting out which is also the point of the article (unrealistic salary expectations).
Yep agree. I didn’t use my network. I graduated pre-internet days. My spouse who graduated from a large U (not particularly famous) does use a large network and it can make a big difference.
I think that graduating from a higher level U means you’ll get more salary starting out. I did. Usually 30% more than my peers. Again, that might be changing these days. But I think this is actually more important than any network.
IF I had a kid who was chasing between schools and I could pay without taking on any debt, I would. But once you add in debt that can change. Also, I’d be honest with myself and my kids. Not all kids are cut out to work on Wall St. At all. So that’s another factor.
You need to take into account however the selection bias in that students attending “top schools” have already gone through an initial screening in being admitted. A top ranked school will have a larger pool of highly desirable candidates than a non-selective one. The question becomes how much of the boost that students at selective schools experience in being able to land better paying jobs is a reflection of their abilities (which is why they were admitted in the first place) vs the resources afforded by the school that they attend.
If you took an average student at a non-selective public school and plunked them into a highly selective top ranked school, would they see a similar boost in employment outcomes?
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You previously mentioned Fortune 100 companies as “best companies.” The highest revenue fortune 100 company is Walmart, which I’m guessing you don’t view as a “best company.” So I’ll ignore Walmart and skip to the next 2 highest revenue fortune 100 companies – Amazon and Apple.
Amazon and Apple “recruit” at a wide variety of colleges for a wide variety of different positions. A list of colleges with the most alumni at Amazon and Apple on LinkedIn who have the the word “engineer” in the job title is below: The 2 colleges that appear on both lists are USC and U Washington, which I’m guessing are not on your list of the “top 10 STEM schools”. A list of companies that “recruit” at USC is at https://careers.usc.edu/resources/who-recruits-at-usc/ . Amazon and Apple appear on the list, as do something on the order of 1000 other companies.
Colleges with most Amazon Engineers working in US
- USC
- Northeastern
- GeorgiaTech
- UT Dallas
- U Washington
Colleges with most Apple Engineers working in US
- CMU
- UC Berkeley
- USC
- U Washington
- UT Austin
When a company decides where to recruit, they do not just go down a USNWR ranking or other list of top 10 STEM colleges. Instead they consider things like at which college they are likely to get the most quality hires, the time/effort/expense involved in this recruiting, past history with the specific college, etc.
For example, in another recent thread a poster mentioned her husband was hiring new grads for mechanical/aerospace engineering positions at a large Fortune # company located in St,. Louis. I’m guessing, his first thought wasn’t Harvard is ranked high on USNWR, so let’s fly out 1000+ miles to Harvard and see how many of Harvard’s ~10 mechanical/aerospace grads we can get and hope they want to live in St Louis. Instead they’d probably get a lot better results, if they made the short drive to Missouri S&T where there are hundreds of engineering grads in the desired fields that would be happy to live in St. Louis.
Even when the company does not attend career fairs or officially “recruit” at the college, the student can still apply. Unlike Wall Street type investment banking, typical companies generally place little focus on name of college attended when evaluating such applications.
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It would be interesting to see same data for Google, FB and such. The two companies you mentioned are not very desirable among grads from top schools. Specially Amazon due to PIP and lower compensation compare to others.
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I believe Google hired the most people from that mediocre school AKA Stanford.
According to statistics from the MIT Careers Office, in recent years, the companies that have hired the most MIT students include management consulting firms McKinsey and Bain, software companies Google and Microsoft, engineering companies Raytheon and General Electric, and investment banks Goldman Sachs and Morgan Stanley.
Im pretty sure the average Amazon engineer makes more than employees at McKinsey, Bain, Google, and the Wall Street investment banks.
Google hires many thousands of employees each year. Some attended Stanford, but the overwhelming majority attended other schools, many of which I doubt that would be on your list of top 10 schools. Similarly Google attends career fair and does recruiting activities at many colleges besides Stanford and MIT.
Looking on LinkedIn, 1500 Google engineer employees say they attended Stanford, which is indeed a lot. However, 1200 say they attended USC, 1000 attended UIUC, 900 attended UCSD, 800 attended Washington, … ; which is also a lot. Google employees attend a wide variety of different schools. A similar statement could be made for nearly any large tech company.
You are quoting a blog post from 2006 that cherry picked a specific list of companies that were hot in 2006 (some are not as hot today), presumably based on employment figures from 20 years ago. That said, I agree that a significant number of MIT grads work at most of the listed companies. While the listed tech companies may recruit and hire MIT grads, they also recruit and hire grads from a lot of other colleges.
The bottom line is that many (not all) students who want to attend MIT probably analyzed their options and determined that their career opportunities are enhanced by attending the school vs going somewhere else.
They can work at the top tech companies, do consulting, investment banking - these are some of the highest paying jobs straight out of college and they can choose among them (assuming they do well and don’t throw up in the interview process).