<p>Like I said, you and your colleagues in the oil industry seem to be doing very well for yourselves. Good for you. </p>
<p>However, to reiterate, most other engineers won’t make $70-90k a year to start. MIT is arguably the best mechanical engineering school in the world, yet MechE’s graduating from MIT in 2008 made an average of only $63k a year. Granted, they probably made a little more in 2009, but certainly not to the $70-90k level. </p>
<p>Overtime is also a foreign concept to most engineers. Engineers are generally classified as ‘exempt’ employees which means that they are not required to be paid overtime, and are usually not. If an engineering company demands that you work 100 hours a week, that’s what you have to do (or else quit)…for no extra pay.. I myself know many engineers who have quit engineering in frustration because they were pressured to work “I-banking hours”, and they figured reasonably that they should then be paid Ibanking compensation rather than regular engineering salaries with no overtime. That’s why they quit to get MBA’s, and now they’re Ibankers. </p>
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<p>Then you probably wouldn’t want to work for Silicon Valley tech startups either, for which the hours truly can be just as hellish as that of the most frazzled M&A banker, if not more so. Both Ibanking and tech startups offer a high-risk opportunity for riches in return for long hours. The difference is that most startups will fail, meaning that the employees will have earned only salaries, which tend to be rather mediocre at most startup firms, and certainly deeply mediocre compared to the hours worked. However, Ibanks will pay you well even if you don’t get promoted (and are hence fired). Heck, even if your Ibank goes bankrupt, you will still be paid well. Bankers at Bear Stearns and Lehman earned highly lucrative pay packets up until the day of reckoning, and they’re not giving any of it back.</p>
<p>Wow, sakky you wrote a lot. I’m glad you care so deeply about the subject…genuinely.
Are you an engineer?</p>
<p>I skimmed thru a lot of what you wrote. I feel your frustration with the finance industry taking over this country and paying people ridiculous amounts of money to basically do nothing. </p>
<p>There is one thing that I kinda don’t agree with in all that you wrote. I worked as an engineer for most of the last decade…I’m in grad school now…and hence on College Confidential. The thing is you seem to think that all these engineers grads had a viable choice between engnieering companies wanting to hire them and finance companies wanting to hire them. This is not what I observed. Except for mid-2003 to mid-2005 most engineering companies I observed didn’t really hire undergrad straight out of college…except for a trickle. Certainly, I’m looking a small portion of the engineering industry. The point is that many of these engineering majors may be going into finance out of necessity, rather than choosing to go into a field other than what they were trained for because they were acting irrationally.</p>
<p>As for MIT engineers wanting to go into engineering, I wish them luck. The job market sucks.</p>
<p>It’s actually worse than that - I would have preferred if they had indeed been paid ridiculous amounts of money for truly doing nothing. Instead, what they did was worse than nothing - they were paid ridiculous amounts of money while driving the world’s economy into the ground and sticking the taxpayers with the bill. These guys made giant pay packets, and they’re not paying any of it back. Instead, it is all of us, and our children and grandchildren who will be stuck paying higher taxes to pay back the national debt incurred to dig ourselves out of this debacle. </p>
<p>The fact of the matter is, much (probably most) of the financial ‘innovation’ over the last 10 years, as well as the large pay packages associated with providing such ‘innovation’ was not a value-added activity for society, but was merely a type of rent-seeking. The basic idea of asset-backed securitization may have added value, but the more exotic tranching of ABS’s into CDO’s, CDO-squared’s, and CDO-nth-power seems to have been little more than a mechanism to effect regulatory arbitrage and introduced financial risks truly understood by nobody, not even the bankers themselves who synthesized the securities, and certainly not by regulators or counterparties (see ‘The Economics of Structured Finance’ by Coval, Jurek & Stafford in the Win 2009 edition of the Journal of Economic Perspectives). </p>
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<p>Well, I don’t know about that. Keep in mind that we are making a relative comparison between engineering vs. finance (or consulting). Whatever problems undergrad engineers may have had in terms of finding engineering jobs, the problems are surely worse than undergrad engineers (or undergrads from any other major) had in terms of finding finance jobs. Let’s face it: if you graduate with an engineering degree from Idaho State University or some other average school, you’re not going to get a job offer at Goldman Sachs, or any other investment bank. But you might get a job at an engineering company. The Ibanks only recruit at a tiny handful of schools, which obviously most people do not attend. </p>
<p>However, MIT (and Stanford, Berkeley and a few other elite engineering schools) are members of that tiny handful. Engineering students at those schools therefore truly do have a viable choice between taking jobs in engineering vs. finance. These are some of the very best and highly ranked engineering schools in the world, and students therefore have far less difficulty in finding engineering jobs relative to students from lower-ranked programs. The issue is that many of them simply don’t want to, because they’d rather take jobs in finance. See below.</p>
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<p>I never said they were acting irrationally - indeed, they are probably behaving entirely rationally given the incentives placed before them. After all, if the Ibanks and consulting firms are willing to pay you better, both immediately and (especially) later on in your career provided that you can be promoted, and also willing to provide what is perceived to be better business training that can be leveraged later in your career, it is entirely rational for you to take it. In contrast, engineering is seen by many of the students at the top schools, relative to finance and consulting, as being lower-paid and dead-end job with few career opportunities.</p>
<p>Consider the lamentations of Nicholas Pearce, a former chemical engineering student at MIT:</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>Well, to be fair, it’s still better than the job market for finance and consulting. Finance and consulting are ‘high-beta-employment’ professions which means that when the economy is hot, they hire a lot, but when the economy turns sour, they hire very few. </p>
<p>However, interestingly, while the employment may swing wildly, the pay is less so. For all of the recent problems in the finance industry, remarkably, it still pays better, on average, than does engineering. Heck, some of the Ibanks have recently announced some of the largest bonuses in their history, even as shareholders and taxpayers got shafted. However, I am not aware of too many engineering companies who pay record bonuses in the middle of a recession. {If anybody is aware of one, please do tell so that we can all work there.}</p>
<p>Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm’s 140-year history after a spectacular first half of the year</p>
<p>“It was a very good quarter to be a Morgan Stanley employee,” said analyst Brad Hintz at Sanford C Bernstein & Co. “I’m not so sure it was so good to be a Morgan Stanley shareholder.”</p>
<p>One thing that I have always questioned about these massive bonus packages is whether or not they are achieving their desired effect. </p>
<p>Harvey S. Firestone, founder of the Firestone Tire and Rubber Company once said, I have never found, that pay and pay alone would either bring together or hold good people. I think it was the game itself.</p>
<p>Frederic Herzberg, famous behavioral scientist, studied the work attitudes of thousands of people ranging from factory workers to executives - he concluded that it wasnt money, good working conditions, or fringe benefits that motivated people - but rather the work itself. </p>
<p>It is often said by those who have worked in banks and consulting firms that they really found the work interesting. I dont think there is any question of whether it is more stimulating than the majority of engineering jobs, in fact, I would be willing to bet that many of the MIT grads who take up offers on Wall Street went through similar situations to that I found this past summer. </p>
<p>Upon gaining an engineering internship at a Fortune 500 company, I was excited, at least initially. As I packed my bags to head out to Chicago I dreamt of the opportunities that lay ahead of me. As a first job for such a large company, everything seemed new and exciting. I was sure the massive operations of such a corporation would ensure a green pasture of stimulating work experience. To my dismay, the excitement wore off incredibly quickly. It is hard for me to even express to you how quickly the dull, lifeless colors inside a cubicle killed my spirit. Working individually well over 90% of the summer left me questioning the very foundation of why I ever wanted such an internship. Sure, the problems to solve were plentiful, and the managers were willing to let me take on whatever I could handle, but I still found the entire experience extremely Office Space- ish. Worse yet, was that I looked around to the many engineers who had been there for a number of years, and they too were locked away in little cubicles staring at spreadsheets, day in and day out as their lives passed by. </p>
<p>From that point on I decided that my number one criteria for choosing a position was that I would be working with a team, and have the opportunity to lead that team in the not too distant future. I have entertained numerous ideas about a path moving forward, but I certainly would consider a cut in pay in order to achieve this goal. </p>
<p>I feel that an adequate number of engineering students would still flock to banks and consulting firms even without such massive compensation - if for no other reason than to escape the dull lifestyle of many engineering positions.</p>
<p>Well hasn’t this thread taken some crazy turns. Engineers can make a lot more money in finance or consulting than in engineering (generally not so much at the entry level, but a few years in it becomes apparent), which is why a lot of us do it. Engineering has always seemed like a bad deal to me–decent to good starting salary which only increases marginally 10 years into the future.</p>
<p>The conversation about investment banks and people in them is naive at best. This is probably because most people just watch cnn talk about the whole financial mess and get upset (as cnn wants, so you keep watching).</p>
<p>One thing that is particularly misleading:</p>
<p>"For all of the recent problems in the finance industry, remarkably, it still pays better, on average, than does engineering. Heck, some of the Ibanks have recently announced some of the largest bonuses in their history, even as shareholders and taxpayers got shafted. However, I am not aware of too many engineering companies who pay record bonuses in the middle of a recession. {If anybody is aware of one, please do tell so that we can all work there.}</p>
<p>Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm’s 140-year history after a spectacular first half of the year"</p>
<p>GS owes no one money. they paid back the US months ago, giving the government a return on investment they couldn’t have gotten anywhere else. Also, they are MAKING MONEY. what it pays its employees is between the firm and its shareholders and not anyone else. The stock is doing great so I can’t imagine shareholders are upset. The people there deserve to get paid. Just because people on this forum or in the US dont understand their lines of business / how they make money / add value doesn’t mean they shouldn’t get paid.</p>
<p>First to be clear, my overall goal isn’t to garner empathy for the financial services/consultant industries but instead to clarify a few key points and add some elaboration on to why there is an engineering brain-drain. </p>
<p>I mentioned this before but very few people will make a career out of IBD or consulting and by that I mean attaining the position of MD/Partner. Warranted or not, many people will use the positions as a stepping stone to other lucrative positions. If you want to make a career out of IBD you don’t want to work your way up from analyst—career positions usually come through an associate position following an MBA. The reason you have 2nd or 3rd year analysts (who get screwed in terms of work/pay) is IBD and consulting is a way to “earn your stripes” or get the experience needed to get that Private Equity or Hedge Fund position. In fact working at a consulting firm is another viable option before entrance to business or graduate school—there are many PhDs and a handful of MDs that populate the elite firms. Therefore unlike engineering companies the vast majority of your talent is very short term and constantly needs to be replaced. Granted, training an employee on a pressure vessel requires more investment than learning IBD excel, but there is a still a need to keep on finding new talent. </p>
<p>Another point is that the average ! = median. Yes, Goldman Sach’s paid on average about $500,000 in bonuses but the bonuses are skewed heavily towards the upper management/partners. Just like in law firms, elite consulting firms and in corporation, it’s the partners and elite management that get the biggest piece of the pie. I don’t agree with this policy, I feel that all workers would be more motivated if they got a tangible share of the profits or some sort of bonus for working harder.
Let’s get back to the main point—many engineers are not entering engineering positions. While I whole heartedly agree that society would be better off with more physicians, researchers or engineers—I still feel that a college degree is a mark of education and doesn’t have to constitute vocational training.
Engineers at elite schools are inclined to take positions within banking/consulting for pay, prestige or challenge. Pay as I mentioned before isn’t the best way to look at things specifically when you look at entry level positions. Prestige is obvious these positions have been viewed as “successful” and glamorous—probably popularized by TV or films. </p>
<p>Another factor is ambition—like it or not funding drives most enterprises and any tangible “business” skills can be a boon. From a graduate student needing a GRA for his PhD to an alternative energy firm wanting to power West Texas, you need a source of funding to get things in motion. Even an engineer with the greatest idea needs to find investors to bring his ideas to fruit, there is a reason why start ups staff their management with ex-bankers, consultants or managers, they have the know how to find investors. One thing we argued about a while back on was whether an engineering degree even gave you “real world” skills that are applicable—personally I don’t think so and the vast majority of engineering jobs don’t require an engineering degree. While we can argue that this know-how might just be some inside networking connections but sometime it doesn’t matter what you know but who you know. So I feel that students at these elite universities might have big dreams and doing in a stint in Wall Street or an elite firm might be the best way (other than getting an MBA) to get a crash course in business and evaluations. </p>
<p>Finally I mentioned challenge, this is a personal choice but I expanding upon purduefrank’s point—the vast majority of engineering jobs can be boring. I don’t care how much you might love Chemical Engineering but sitting in a cubicle all day starting at process control schematics can quickly dampen your spirits. Add this to the fact that your career progression isn’t really set in stone when compared to banking/consulting firms where all that matters is performance, and you can quickly become depressed or bored with their jobs. I mentioned the “Big Oil” mentality—let me clarify; some of the mid-level employees got into the industry randomly and think of their job as just a steady pay check. Of course barring economic meltdowns (like the price of oil collapse), a major integrated oil company is less inclined to fire an average performing employee. Sure, they might ship him off to some other division but only under exigent circumstances will he be fired. I personally think consulting was a great way to break monotony since you are exposed to a wide range of problems over a short time span. Instead of focusing on one bolt in a turbine for 10 years you get the experience to see a wide variety of problems and generate solutions.</p>
<p>How can we shift more students towards engineering positions? Depending on your preference in market efficiency theory, a bump in compensation could help. Perhaps engineering companies should employ a more merit based—employees own their patents or a share of the profits and therefore are motivated to succeed. It is tragic that fewer students are going into engineering or nursing for that matter but other than a “change of heart” I don’t see a viable solution to reverse the trend.</p>
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<li>This engineering to IBD comparison is a bit tired. We graduate 85K engineers a year. How many new-hire IBD positions exist? </li>
<li>I don’t agree with the previously described “Big Oil” mentality. I work in Big Oil and there is simply no difference between this industry and others I have participated in.</li>
<li>I have no problem with the purported underpay of Engineers in the US. We generate very few engineers and the demand in future years is only going to go up. On a relative basis I think engineering, as a career, is going to increase as a multiple of average median income in the US. I do not feel that way about many careers (medicine/law/finance).</li>
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<p>Really? So then why did GS acquire a charter in 2008 to become a Federally backed bank holding company last year, in return for all of the regulatory privileges (and responsibilities) associated with such a status, such as access to the Fed discount window, FDIC deposit insurance, and TLGP-guaranteed bank debt, all ultimately backed by the full faith and credit by the taxpayer? GS was one of the largest of the AIG counterparties that the Fed bailout cash ended up having to pay off, at the risk of flooding the entire financial market with instability. GS also is undoubtedly seen as a bank that is now ‘too big to fail’- after the catastrophe that was Lehman, does anybody seriously believe that the government wouldn’t bail out GS if it fell into insolvency?</p>
<p>Therefore, if GS wants to pay its employees anything it wants without interference with the taxpayers, fine, all it has to do is take the following steps:</p>
<p>*Renounce its bank holding charter and thereby surrender all rights to access the Fed discount window, taxpayer-guaranteed bank debt facilities, or any other sort of government liquidity facilities. </p>
<p>*Return all counterparty transaction funds or posted collateral from post-bailout AIG, and pledge to take no more. After all, GS should have been more careful about the counterparties that it chose. AIG, after all, was never a taxpayer-backed bank. If GS made a mistake in partnering with an unstable and unreliable AIG, hey, as a taxpayer, that’s not my problem, or shouldn’t be. GS could attempt to recover its funds as an unsecured creditor. {Good luck with that.}</p>
<p>*Break into itself multiple smaller units, none of which could individually threaten the stability of the system. As former IMF Economist Simon Johnson has said, ‘too big to fail’ means ‘too big to exist’. Hedge funds and private equity firms can pay as they wish, but their fall (usually) won’t necessitate a government bailout.</p>
<p>So I’ll be waiting and watching for GS to complete these 3 simple steps. Otherwise, we will have to agree that GS is indeed enjoying a substantial (implicit) government subsidy, which means that their pay packages are a matter of public interest. To argue otherwise - that is the truly misleading notion.</p>
<p>Um regulators live at GS now that it is a holding company. They aren’t breaking any rules and still making tons of money. You can argue that maybe the standards should be higher, but they are meeting their responsibilities as a holding bank. It just makes sense strategically to go that way, and like any other company they are trying to make as much money as possible. It’s the governments responsibility to make sure that the increased responsibilities for holding banks is sufficient.</p>
<p>Do you know what a hedge is? It was more or less irrelevant what happened to AIG from GS perspective. Media just likes to downplay that because they want to make it look like Paulson and Blankfein were making the best decisions possible for GS, i.e. trying to **** off everyone, again.</p>
<p>Re: the hedge funds and private equity bit-- google long term capital.</p>
<p>you can turn off CNN whenever you are ready to actually think for yourself.</p>
<p>Another problem is the lack of graduate-degree US citizens within America. I know that R&D will take a hit during the recession but it is incredible the demographics of engineering graduate student classes–I think my class has 50-75% very intelligent and very disciplined foreign nationals.</p>
<p>Absolutely. I got a 3.5 in Mechanical Engineering and I actually like going to school. The simple fact of the matter is that the economic value of a graduate degree is extremely poor for US citizens.</p>
<p>I certainly agree, and that begs the question of why exactly can’t or won’t engineering companies offer the same (perceived) quality of training that helps young new graduates learn a wide variety of tasks that prepares them for a multitude of careers. Again, to paraphrase former MIT student Nicholas Pearce, why can’t engineering companies provide the team setting, plus large bonus payments, plus strong business training, plus a powerful resume-building brand name, and a higher base salary to boot, that his alternate (consulting) employer can offer? Sure, I agree that he probably won’t be working there for more than a few years…but many highly ambitious young people don’t mind that. Many would actually consider it to be a plus, because it dovetails with their itinerant nature. Let’s face it - most young people fresh out of college don’t really know what they want to do with their career. They would surely value an experience in which they could try on different business tasks to find out what they really enjoy. </p>
<p>In fact, many of the most desirable engineering companies in fact provide this, if only implicitly. Startup tech firms, for example, are among the most popular employment options of many engineering students from top schools such as MIT or (especially) Stanford. Yet most startup employees - at least if they’re savvy - realize that they’re probably not going to be working there for more than a few years, given the high startup mortality rate. The startup lifestyle necessarily entails the willingness to jump from one startup to another. Nor are their tasks going to be well-defined: most startup engineers are assigned far more than pure engineering tasks, simply because startups never have enough people to complete everything that needs to be done. A startup engineer may easily find himself working in sales, marketing, strategy, fund-raising, partnership management, and a bevy of other responsibilities as the need arises. That is, incidentally, why startup experience provides such valuable and varied future career training. </p>
<p>But many (probably most) regular engineering companies do not seem willing to provide such training to their engineers. That is why many of the best engineering students would rather not work there, but would rather take a job in consulting or banking (or a startup). </p>
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<p>Sure, but that provides motivation for students to want to work there. I don’t think a single (non-startup) engineering firm will ever pay anywhere near an average of $500k of bonuses per employee. </p>
<p>I certainly agree that the odds are low for any given IB analyst or associate to ever become a partner or managing director. But the odds are also low for any given engineer to become division President or a counterpart position within upper management. The difference is that the investment banking upper managers make far more than the engineering firm upper managers. </p>
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<p>I agree, but yet again, the question is why isn’t engineering considered more prestigious.</p>
<p>Consider the situation in foreign countries. Engineering in European countries, especially in Germany, is held in tremendously high social regard, with Germans being understandably proud of their nation’s history of engineering expertise. Many nations in Asia hold engineers in similarly high regard - the Indian Institutes of Technology being viewed as the ‘Ivies’ of India, and much of the Chinese political leadership consisting of former engineers. Men like Hu Jintao, Wu Banggou, Jia Qinglin, Li Changchun, and Wen Jiabao didn’t just earn engineering degrees as mere waypoints - they actually worked as engineers, for they (rightfully) saw that as a speedy way to enhance their political careers. Imagine that: the most ambitious (at least politically) cadres of your youth actually choosing to work as engineers, as opposed to becoming lawyers, financiers, or consultants. </p>
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<p>I would dispute the notion that most innovation truly requires extensive funding these days, as much of the innovation that occurs nowadays is within the Internet/Web2.0 in which funding needs are a relatively pittance and many startups will take VC funding not because they need the money but simply to affiliate themselves with the VC brand name and network (i.e. I would actually pay money to say that Kleiner funded me). Much of the best software is free and computer server processing power and bandwidth is dirt cheap and getting cheaper every day. </p>
<p>But in any case, I don’t dispute that innovation does sometimes require funding - and in some cases, extensively so. Yet that still doesn’t quite explain why ex-bankers/consultants would be the ones who necessarily know how to procure that funding, and nobody else. Why don’t we educate engineers on how to procure funding? That would surely be a far more useful topic of study than, say, learning how to derive the Maxwell Relations. {To this day, I still haven’t a clue as to why we spent so much time learning the M.R.'s when I have yet to meet a single practicing engineer who actually uses them on the job, or even understands what they actually mean in a real-world sense.)</p>
<p>Exactly - it is precisely the governments responsibility to properly regulate the banks that are now truly too big to fail, and if that means intervening in pay, then they have the right to do so. We can debate whether they should do so, but it is indisputable that they have the right to do so. Banking is one of the most heavily regulated industries in the world, and rightfully so, given its prediliction for instability that can and has thrown the entire world’s economy off a cliff. </p>
<p>Look, I don’t deny that GS is acting brilliantly given the rules placed before it. Heck, I would probably do the same. The problem is with those rules. See below.</p>
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<p>Trust me, I know what a hedge is just fine. What is inescapable is that all of the counterparties of AIG - which wasn’t even a regulated bank at the time - were bailed out. Why? There was no expectation that any of AIG’s creditors be bailed out. Heck, counterparties are over a year later still fighting over the remnants and obligations of Lehman Brothers. </p>
<p>Bottom line: GS should have been more careful about which counterparties it chose to transact with. It’s not the taxpayer’s responsibility to save GS if it chooses unwisely. </p>
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<p>I think you should perhaps google LCTM. LCTM was not bailed out with taxpayer funds - it was the banks that bailed out LTCM. Granted, that bailout was coordinated by the Fed, but no taxpayer funds were ever placed at risk. </p>
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<p>I would argue that perhaps you need to turn off CNN and start thinking for yourself, instead of mouthing the poorly constructed platitudes that you have posited thus far. Trust me, I am quite confident that I am well versed on this particular subject.</p>
<p>The bottom line is this: if GS doesn’t want the taxpayers to ever interfere with its compensation plans, then the answer is simple. Entirely remove GS from any and all government liquidity facilities. Don’t use AIG as a conduit via which to access government bailout funds. And break up GS so as not to generate a risk externality that the taxpayers have to assume. Right now, the entire world understands that the government would never dare to allow GS to fall, which means that GS can access capital for cheaper than it would otherwise. Remove that implicit government subsidy.</p>
<p>If GS isn’t willing to take these steps, then we have to agree that GS still falls under the aegis of government protection, and its bonus structure is therefore a matter of public interest.</p>
<p>That’s irrelevant to the point at hand. I have always agreed that if you get an engineering degree from Idaho State or some other average engineering program, you’re not going to get an investment banking job right out of school. For those students - who represent the vast majority of engineering students - an engineering job probably is the best they can do. </p>
<p>However, what I am talking about applies to those students who attend the very best engineering schools such as MIT or Stanford where investment banking (and consulting) are indeed viable career options. As matters stand today, the incentives are rather weak for those students to take regular (that is, non-startup) engineering jobs. Why exactly should an MIT chemical engineering student take a regular engineering job making $60k if he can obtain an offer from GS or McKinsey?</p>
<p>I hope you are right, but I am far more pessimistic about the matter. </p>
<p>Even if it is true that the situation will improve in the future, that doesn’t exactly help those people who need to make decisions regarding their career right now. For example, an MIT or Stanford engineering senior who is deciding between banking/consulting or a (non-startup) engineering job is probably going to choose the former. Sure, perhaps decades into the future, engineering may be a better choice. But that doesn’t help him right now. After working as a banker or consultant, that guy will basically have lost his engineering skills, despite his elite engineering degree. Hence, the US will continue to lose many of its best engineering minds to other careers.</p>
<p>I completely agree that is tragic that in the US engineering isn’t seen as prestigious. In other countries Engineers are actually granted formal titles and I have found that many foreign countries look upon engineers with envy. </p>
<p>It might be because engineering jobs are viewed as cubicle hells and other Dilbertesque motifs. Honestly, many engineering jobs are very routine and can quickly become boring. The same is true about banking but at least the vast majority of analysts have other future plans they are after. </p>
<p>Consulting/banking is prestigious not just because of the money but the names and power behind the brand. The roster of alumni at McKinsey are impressive just like high-level clients you meet. Even a few banking analysts have the opportunities to meet with CEOs–of course they usually keep quiet. The admission criterion are very mysterious and therefore there is a culture of allure around working with the firm. While I’m not saying it’s easy to get an engineering job it is however much easier to work at say GE (a top notch engineering company) than Goldman Sachs IBD. </p>
<p>An easy fix would be to employ the banking/consulting strategy of higher bonuses and compensation but I don’t really think that is sustainable from a business perspective. At the very minimum bankers and consultants just need an office, computers, a phone and some printers to conduct a multimillion dollar IPO or advise a client. Sure, maybe within software products the staff and overhead could be trimmed low but if you are operating a refinery or a fabrication plant, you’ll have to hire an army of engineers and technicians to monitor every little nook and cranny to avoid dangers and ensure quality. </p>
<p>On the funding side of things, a business knowledge is still needed and I feel that it is harder for engineers to think in a business standpoint. While the industry might vary most business can be reduced to the bare fundamentals of profits, CAPEX/OPEX and an underlying product. This is probably why managers from seemingly unrelated industries can sometimes work at other corporations just due to keen business acumen. Of course there will always be exceptions but investors don’t really care about the thermal-process or how efficient the solar panels are, they just want to see the bottom profit line and ROI. Bankers are in a better position because Wall Street and high end finance is still a club–once you get in you can network with the rich and elite. A great idea is a great idea but to get the money flowing it really helps to have a guy who knows finance. </p>
<p>Anyway, I feel that anyone who has a great idea or driving entrepreneurial ambition has a quality that can’t really be picked up in formal schooling. Sure, we can teach engineers about different grants or funding opportunities but it really takes someone with that spark to go through the experience and then learn about funding. For example, you don’t really need a PhD to qualify for government research grants–you just need to fill out a form. However, it really takes time going through the PhD and postdoc process to learn how to effectively fill out that RO1 application. </p>
<p>On a side note (and after taking a few advanced Thermo classes) you are right that very few practicing engineers would need to know the M.R. Though I have found them to pop up every now and then–for any chip that needs to evaluate thermodynamic properties (combustion, HVAC or etc) and is limited by memory. It’s much better to store just the Gibbs data and then store the M.R to get other properties.</p>
<p>Another note is that I feel that MIT/Stanford particularly have higher consulting/banking opportunities due to geographic proximity. MIT is right next to Harvard and a stone’s throw from NYC. Stanford is near Silicon Valley and even more important has a strong VC/start-up mentality/alumni network.</p>
<p>It would be interesting to see where other elite schools (Caltech, Berkley, GATech, Michigan, Texas, A&M and etc) place their graduates.</p>
<p>That’s what I thought: which means that your knowledge probably is confined to little more than watching CNN. </p>
<p>I don’t say that to be overly combative. I am simply pointing out that the fate of GS is still deeply intertwined with the government, and by extension, the taxpayers. Repaying TARP is only piece of the exit strategy, and frankly, a relatively minor piece. A far larger piece would be the Federal bank-holding charter itself, which avails GS of a variety of taxpayer-backed lending facilities. Other investment banks such as Evercore and Lazard do not hold bank charters and therefore cannot access the Fed’s discount window as a lender of last resort. GS should also have no access to AIG’s taxpayer-funded bailout. After all, Lehman’s creditors aren’t being paid via a taxpayer pool of capital, so why should AIG’s? GS is also too big to fail, and everybody knows it. </p>
<p>I have no problem with GS paying its employees whatever it wants, as long as taxpayers aren’t being placed at risk, which they are clearly are. You want to pay out record bonuses? Fine, do whatever you want, just don’t dare come calling for taxpayer funds when your bets turn sour.</p>
<p>Well, I don’t know about that. Boston may be a major financial center, but MIT is not even located within Boston, in contrast to Northeastern and BU which actually are located in the city. Yet I am quite certain that more MIT engineers obtain investment banking jobs, relative to Northeastern and BU engineers. Heck, I suspect that a higher percentage of MIT engineers become investment bankers in NYC than do engineers from CCNY.</p>