<p>sakky- I work in the corporate HQ of a large corporation. I am a lawyer. I have a wonderful job and I make decent money. I’m not Ross Perot, but I do well. Our management team is wonderful. Yes, our company has employees who work in plants and some of those plants have had to close or have extensive layoffs due to the current economy. My work is challenging and interesting. I meet a lot of intelligent, fun people. I’ve worked for other great companies, too (and a few that were pretty awful). I have good insurance benefits and 401K. Good luck with your start-ups. Please let us know how it all works out for you.</p>
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<p>I would look at it in this sense. It’s not that kids are “too good” for corporate America, but, really, that corporate America is “not good enough” for most employees. Let’s be perfectly honest - the vast majority of jobs at Walmart and McDonalds (2 highly prominent members of the Fortune 500) are dead-end jobs. Those jobs pay a pittance while not offering strong opportunities for advancement. </p>
<p>Meanwhile, other industries, notably consulting and finance, do offer better pay and better career advancement opportunities. That’s why many of the better students prefer to work in those fields.</p>
<p>To reiterate, I am no ally of the consulting and finance industries, which I suspect to be largely rent-seeking devices that provide no obvious social utility. But the fact is, they are highly attractive to the best students because they pay well and offer strong career opportunities. If regular companies would improve their jobs, then the best talent would not want to work for consulting or finance.</p>
<p>What’s striking to me is that many of the best engineering students from the best schools such as MIT choose not to work as engineers, but instead head for consulting and finance. These students likely enjoyed engineering - for it’s hard to survive a program of MIT’s rigor if you don’t enjoy it - and therefore probably would have preferred to work as engineers. But the large engineering companies just won’t pay them well, incentivizing those students to take non-engineering jobs (or work for engineering startups).</p>
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One might argue that minimum wage laws create an artificial price floor and therefore a surplus of labor. But I don’t know the specifics of the situation.</p>
<p>I do have a question for you: why do you assume that an average liberal arts grad should be payed more than $35k per year? Why should they be more demanded than the tech guy with a GED?</p>
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<p>Exactly - you’re a lawyer. Which only goes to emphasize the point expressed in this thread: many top students don’t want to take a regular corporate job right after undergrad, but would rather pursue other options, of which law school is a highly popular option. </p>
<p>The instigating spark of this thread was a WSJ article that discussed which schools do corporate recruiters prefer to find entry-level employees right out of undergrad. And as I and others have stated, generally speaking, those jobs aren’t that great. Those who want better careers probably have to pursue a different route…such as attending law school.</p>
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<p>sakky, I don’t think it’s really that bad for a PSU or Minnesota grad to work for McDonald’s or Wal-Mart if it’s some sort of office position at the corporate HQ.</p>
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<p>Sure, but minimum wage law levels are set so low that very few professions are affected. Certainly, the labor market for bankers/financiers is nowhere close to being affected by minimum wage laws, as those who are hired will make 6 figures, yet most applicants won’t get an offer at all (heck, many won’t even get an interview). Perpetually high pay combined with high ‘unemployment’ (as most applicants receive no offer) is clearly a point of disequilibrium. </p>
<p>What instead seems to be in place is not a minimum wage “law” per se, but rather a “socially-set” minimum wage. The finance industry seems to have decided, as a matter of social convention, that every new employee will be paid extremely well. But of course that means that far more people will want finance jobs than are jobs available, which means that the finance industry then screens out the vast majority of applicants. Hence, the finance industry pays a small percentage of applicants extremely well, while paying nothing to the vast majority (who aren’t even hired). This is not a law, in that it wouldn’t be illegal for one finance firm to undercut the others and hire more people for substantially lower pay. It’s just that, for whatever reason, nobody ever chooses to do so. </p>
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<p>Well, in my example, the tech guy didn’t even have a GED. </p>
<p>But put another way, I think that a liberal arts grad should be paid substantially more than, say, a waitress right out of high school who can make $30k. After all, such a grad purportedly offers greater value than that waitress. {If that’s not true, then we should investigate exactly what social value does a lib-arts education provide, which is a different question.}</p>
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<p>I’m simply showing that the typical job at a Fortune 500 company ain’t that great, for the Fortune 500 includes such companies as Walmart, Target, Lowe’s, McDonalds, Home Depot, and plenty of other companies who hire millions of workers right out of high school (or in many cases, workers who are still in high school). </p>
<p>Other posters have decried ‘snobbishness against corporate America’ or that careers in the Fortune 50 are nothing to sneeze at. I respect their opinions, but I would say that I would certainly sneeze at a career manning a cash register at Walmart. If saying that I don’t want to flip burgers at McDonalds for the rest of my life makes me snobbish, then so be it; I’m snobbish. And, again, those represent the vast majority of jobs at those companies.</p>
<p>To be clear - I did use to flip burgers at McDonald’s, and would do so again if I absolutely had to. But that experience emphatically convinced me that I better develop some superior career options or I really will be stuck doing that for the rest of my life. If that’s snobbish, then so be it.</p>
<p>@sakky: I agree with your analysis of the situation in finance. However, my point was simply that unemployment might very well be eliminated if employees could be hired for next to nothing - in other words, that a true equilibrium point might exist below the current price floor. The dispute is probably purely academic.
I don’t see why this should be true at all…</p>
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<p>I agree - but that brings up the topic of ‘efficiency wages’, where wages are set for reasons above simple supply and demand, but also incorporate information asymmetries. As workers can control how much effort they choose to spend on their jobs, and that effort is not fully observable by the employer, paying an above-equilibrium wage encourages employees to work harder for fear of losing their high paying job. It also tends to encourage the more talented candidates to apply for jobs at your company. This may be why, when Henry Ford doubled the pay of his autoworkers to $5 a day, a princely sum at the time, productivity increased by so rapidly as to easily cover the additional labor costs - one major reason being that the best and most productive auto workers in the country applied for jobs at Ford. </p>
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<p>Then that opens the door to a different set of questions entirely, in particular, why do we have so many liberal arts students and, perhaps more importantly, why do high schools teach predominantly the liberal arts. For example, why exactly do high schools spend so much time teaching students how to analyze works of literature - a skill that is practically useless outside of academia - rather than teaching marketable tech skills? {To be clear, I believe that students should read important works of literature and learning about the general themes expressed. But why such an emphasis on *analyzing * them? Why can’t a story just be a story?}</p>
<p>Nevertheless, none of that deals with the issue that a liberal arts graduate from Harvard can obtain jobs in consulting or banking, or head for graduate school. Honestly, how many of them would you think would forfeit those types of opportunities for a regular corporate job that paid only $35k a year?</p>
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<p>I maybe misunderstanding you, but do you really think that a corporate recruiter is going to put a college grad in a “typical” job? I would think they would offer grads some sort of financial analyst position, IT analyst, a global marketing position or other likes.</p>
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<p>Sure, but, again, that position probably really isn’t going to be that great, as the average liberal arts grad made only $35k a year to start. </p>
<p>*…liberal arts majors can expect to be offered a starting salary in the range of $35,508, *</p>
<p>[Starting</a> salaries for recent graduates appear to stabilize - Sep. 9, 2010](<a href=“http://money.cnn.com/2010/09/09/pf/college/college_graduate_starting_salaries/index.htm]Starting”>http://money.cnn.com/2010/09/09/pf/college/college_graduate_starting_salaries/index.htm)</p>
<p>So again, if you were an Ivy liberal arts grad who had the choice of joining a high-paying consulting firm, or heading to grad school, why exactly would you turn that down for a typical corporate job that pays only $35k a year? {Heck, I know graduate students on stipends that pay more than $35k a year, especially when factoring in outside funding such as NSF fellowships and the like.}</p>
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A good point.
Certainly interesting questions, but perhaps deserving of a separate thread.</p>
<p>I have two main issues with the implications of your post #49:</p>
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<li><p>I question the assertion that what you call a “mediocre job” is inherently undesirable. It is not clear to me that a salary of $50k or so is insufficient for a perfectly happy life in many areas of the country*. For a single grad with frugal tastes, the total might be a good deal lower.</p></li>
<li><p>You ignore work environment and demands. Waitressing, plumbing, and many other careers that do not require higher education are often physically demanding and subject to potential workplace injury to a greater extent than office paper-pushing.</p></li>
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<p>** I am aware that the average liberal arts grad earns less over the short term, though I’m not sure about median career salaries. We can restrict this discussion to professional programs such as engineering and accounting if you wish. Also, I recently read a study which ascertained that additional salary increases above $75k had negligible benefits, as the law of diminishing marginal utility would suggest. I don’t recall the sample used.*</p>
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<p>If your question is regarding what your chances are of landing a high-paying finance position, then I would say that those chances are basically nil…at least right now. The fact is, whether we like it or not, finance firms tend to recruit at only a small handful of schools of which your school (which you said was a mediocre state school) is probably not a member. If your school is not within that handful, you won’t even get an interview. Sad but true. </p>
<p>On the other hand, what you can do is head for an elite graduate school, which, because you are within the top 1% of students, is a highly feasible path. To continue the discussion of MIT, many MIT engineering graduate students take finance jobs…some without even finishing their grad degrees at all. </p>
<p>Heck, I can think of some MIT PhD engineering students who started talking to finance recruiters during the first semester of their studies at MIT. While some elected to finish their PhD’s, others just took the master’s and then took finance jobs, and others never even graduated at all, but still ended up in the finance industry. </p>
<p>But the bottom line is that if you want a finance job, you have to be where the recruiters are.</p>
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<p>Sure, but office jobs are often times mentally demanding. Like I said, I know a girl who graduated from college, took a corporate job, and quit to go back to being a waitress, because of the stress of that corporate job. The key difference seemed to be that she would be paid for every extra hour she would spend waitressing - but the corporate job demanded that she spend nights and weekends for no extra pay. Which lifestyle is more stressful? </p>
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<p>But now you’re adding in an extra variable that has heretofore not been a point of discussion - that being the cost of living differentials amongst various areas of the country. Yet we also have to keep in mind that expensive locations are expensive for a reason…generally being desirable places with lots of things to do. Let’s face it - New York, Boston, and San Francisco are some of the most interesting locales in the world. Living costs there are high because lots of people want to be there. {If nobody wanted to live in those cities, the cost of living would obviously drop precipitously.} On the other hand, Detroit is cheap, but that’s because nobody really wants to live in Detroit. {I have many colleagues from that area, and even they admit that they don’t really want to live in Detroit.} </p>
<p>But the point is that cost-of-living factors tend to even themselves out. I agree that $50k, or even $35k may indeed be sufficient for a reasonable lifestyle in many regions of the country…but why settle for that if you could make $75k in the same region? For example, there are elite employers in cheap locations…McKinsey and BCG even have offices in/near Detroit. So you can live in a cheap region and still make an excellent salary.</p>
<p>That’s why I think that cost of living should not be a point of discussion, because it probably averages itself out of the equation.</p>
<p>@Sakky,Thank you!</p>
<p>^^</p>
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<li><p>I don’t know many people who went from manual labor to an office job and regretted the decision. I’m sure there are some. Unless you’d like to trade anecdotal evidence all day, data might be useful here.</p></li>
<li><p>Cost of living wasn’t really my point. Rather, I argue that the tangible benefits attributable to an increase in salary may be quite low beyond a certain point. It is entirely possible that this point lies well above the starting salary for the average state school liberal arts grad - I don’t know. ~$75k was the figure produced by Kahneman and Deaton: [High</a> income improves evaluation of life but not emotional well-being ? PNAS](<a href=“http://www.pnas.org/content/early/2010/08/27/1011492107]High”>http://www.pnas.org/content/early/2010/08/27/1011492107)</p></li>
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<p>CoL will adjust that figure up or down, but the fundamental principle of decreasing marginal utility still applies.</p>
<p>I’ll check back tomorrow. Good night.</p>
<p>1) I think a lot of the snobbery coming out here is a bit funny.
2) By giving the argument that most jobs at a Fortune 500 company aren’t that great (which is true), you’re probably putting yourself in the above camp. Also, no, most jobs at those companies aren’t that great, but slots they’re spending money on recruiters to fill are usually pretty good to start with.
3) I haven’t read the entire thread, but nobody’s brought up the issue of bias. The WSJ people said that they simply had the recruiters rank colleges. A lot of those recruiters probably came from those big schools. That being said, I happen to like the way these recruiters ranked schools and agree with it.</p>
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<p>@@ We’re not talking about the burger-flippers and the Walmart greeters. We’re talking about corporate headquarter-type jobs that a smart, ambitious college grad might get into. Finance. Marketing. Promotions. R&D. Etc. </p>
<p>To be honest, sakky, I think you don’t have a clue about how well corporate America can and does pay. As an undergrad coming out of a top 20 school, I chose between consulting jobs with the usual suspects and a corporate-America job (Fortune 50, name-brand company you’d all know). The corporate-America job paid better *right off the bat * – $5,000 better, which was not chump change in 1986 – and I made more than any non-engineer grad at the university that year. It paid for my MBA work at the school of my choice. I got outstanding training, made tremendous connections, worked with the best and brightest in my field. While I worked my butt off, I also wasn’t relegated to living out of hotel rooms for 6 months at a time, which was important to me as a newlywed. Stock was part of my pay package, and as I advanced the ladder, it became more and more important, such that by the time I left, I had been making six figures for a number of years and easily had seven figures worth of stock sitting around. I left to do boutique consulting in my given field and really, the pay isn’t all that tremendously different from corporate America (and I don’t have the stock options I used to have).</p>
<p>I think you are sadly misinformed about what it’s like to be a senior manager or a director at a major company. You can easily have a very nice six-figure income – no, you might not make seven, but so what? – and be intellectually challenged. And, I’m sorry, the consultants I know (if they didn’t burn out) aren’t really making anything all that different from what I’m making. </p>
<p>MOWC is exactly right. I’m guessing she works with tons of professionals in her corporation who are making six figures, have a very nice upper middle class / lower upper class lifestyle and enjoy what they do – exactly what is the “problem” with that?</p>
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<p>This is like a flashback to the 1980’s – these views are so dated. Don’t you know that what the really smart people do these days is pick the location they want to live / work in, and with the availability of the internet / telecommuting, they do that? Some of the smartest and most successful (financially) people I know live in remote Maine, Boulder CO, or wherever the heck they want to and “phone it in” / travel just as needed. <em>Fascinating</em> how my NY client cares only about my brain, not the fact that my brain is located in Chicago.</p>
<p>“doct: you sound like a moron”</p>
<p>Pacheight: Why don’t you ask your neighbors who work for corporations that you tout- how many of them feel satisfied and engaged in their jobs? The statistics show the percentage in the US is less than 50% and dropping.</p>