WSJ: "If you're a high math student in America... it's crazy to go into STEM"

College Search & Selection
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"...only a third of science and engineering college graduates actually take jobs in science and tech fields, according to a 2007 study by Georgetown University professor B. Lindsay Lowell and Rutgers University professor Hal Salzman.</p>

<p>That may partly be because the jobs don't pay enough to attract or retain top graduates. Science, technology, engineering and math majors who stay in a related profession had average annual earnings of $78,550 in 2009, but those who decided to go into managerial and professional positions made more than $102,000, according to an analysis of U.S. Census data by the Georgetown University Center on Education and the Workforce.</p>

<p>"If you're a high math student in America, from a purely economic point of view, it's crazy to go into STEM," says Anthony Carnevale, director of the Georgetown center.</p>

<p>Some science and math graduates also say they would rather channel their analytical skills into fields that pay higher and seem less tedious. Charles Mokuolu, 23, graduated from Georgia Tech in 2010 with a civil-engineering degree, and now heads the finance club at Duke University's master of engineering management program. He recently secured a business-strategy job in the commercial leadership program of a large global manufacturing company.</p>

<p>After interning at an engineering firm, "I realized that although I did enjoy learning about all this cool stuff and doing math problems that no one else could solve, it's not something I wanted long term as a career," he says.

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<p>College</a> Students Find Math, Science, Engineering Just Too Hard - Career Advice for Students & Grads on FINS.com</p>

<p>Students</a> Pick Easier Majors Despite Less Pay - WSJ</p>

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<p>Math is a skill that can be used in many different ways? Developing this fundamental skill and combining it with a Masters in something else (i.e. Finance) is excellent. That’s my opinion and I will encourage my daughter to continue developing her math skill and perhaps even pursuing it as an undergrad.</p>

<p>Am I wrong?</p>

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<p>The article is actually about the STEM courses being too hard as noted in the FINS title. And managerial positions in engineering are frequently filled by engineers.</p>

<p>For another view about STEM majors:</p>

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[High</a> Demand for Science Graduates Enables Them to Pick Their Jobs, Report Says | Higher Ed Utah](<a href=“http://www.higheredutah.org/high-demand-for-science-graduates-enables-them-to-pick-their-jobs-report-says/]High”>http://www.higheredutah.org/high-demand-for-science-graduates-enables-them-to-pick-their-jobs-report-says/)</p>

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<p>Hmmm, [College</a> Students Find Math, Science, Engineering Just Too Hard - Career Advice for Students & Grads on FINS.com](<a href=“http://student.fins.com/Articles/SBB0001424052970203733504577026212798573518/College-Students-Find-Math-Science-Engineering-Just-Too-Hard]College”>http://student.fins.com/Articles/SBB0001424052970203733504577026212798573518/College-Students-Find-Math-Science-Engineering-Just-Too-Hard) says (emphasis added):</p>

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<p>Does this mean that college in general is getting “too easy”?</p>

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<p>As usual, the article lumps all STEM together inappropriately. For example:</p>

<p>Majoring in biology is a lot of work (labs and such) and has poor job and career prospects at the bachelor’s degree level.</p>

<p>Majoring in applied math is often much less work (math courses tend not to have labs) and often has very good job and career prospects at the bachelor’s degree level.</p>

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<p>Actually, the issue is not about whether you should choose to major in STEM, which the article wholeheartedly endorses. The issue is whether you should choose a STEM career after you finish a STEM major. A corollary question is: why don’t STEM jobs pay better, relative to the business/finance jobs that attract the STEM talent pool?</p>

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I thought engineering jobs get paid more than business/finance jobs.</p>

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<p>We’re talking about all of STEM, not just engineering.</p>

<p>But, to your point, it is clear that a certain subset of business/finance jobs - namely consulting and especially finance - that pay substantially more than do engineering jobs. That raises the question: why don’t engineering firms improve their salaries and professional opportunities to compete? Perhaps the implication is that engineering firms are not really interested in having the best talent? </p>

<p>Consider the lamentations 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>[Are</a> We Losing Our Edge? – Printout – TIME](<a href=“http://www.time.com/time/printout/0,8816,1156575,00.html]Are”>http://www.time.com/time/printout/0,8816,1156575,00.html)</p>

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<p>“That raises the question: why don’t engineering firms improve their salaries and professional opportunities to compete? Perhaps the implication is that engineering firms are not really interested in having the best talent?”</p>

<p>Perhaps the implication is that engineering firms are paying as much as they can afford and still make a profit. But consulting and finance firms can afford to pay even more. </p>

<p>The customers of engineering firms are basically everybody - every company and every person who wants to build something, or buy say a car, or cell phone, or buy some other consumer product that is designed and tested by an engineer. The customers of finance and consutling firms are major corporations and Wall Street high rollers. That’s a much higher flying game. Those types of customers can afford to pay a lot more for engineers’ services than can an auto company or consumer products company.</p>

<p>So do the engineering firms with their lower salaries lose some of the “best and brightest” to Wall Street? Probably so. But for them an A- engineer can very likely do the job just as well as an A engineer. And they can afford the A- engineer. </p>

<p>An engineering company that paid Wall Street salaries would quickly price itself out of its market. They’s be constantly undercut by other engineering firms who are doing perfectly good work using the A- guys.</p>

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<p>sakky, put on your flame-proof clothing! I tried to warn people of this, and it seems like there’s a number of people out there that just don’t want the message to get out. </p>

<p>See <a href=“http://talk.collegeconfidential.com/college-search-selection/584100-dont-go-engineering-college.html[/url]”>http://talk.collegeconfidential.com/college-search-selection/584100-dont-go-engineering-college.html&lt;/a&gt;&lt;/p&gt;

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<p>Is that so? If engineering firms are really so strapped for profit (and consulting/finance firms are not), then perhaps you can explain the following:</p>

<p>*Of the 5 largest market-cap US firms, not a single one is a finance/consulting/professional-services firm, rather all five are engineering-centric firms: ExxonMobil, Apple, Chevron, Microsoft, and General Electric. Heck, ExxonMobil has a market cap more than double that of the largest US bank (JPMorgan Chase). </p>

<p>*Even many less prominent engineering firms have surely earned higher profits than many banks over the last few years, especially after accounting for the unprecedented losses incurred by the finance industry in Q3-4 of 2008 and Q1 of 2009. Frankly speaking, most of the finance industry was technically insolvent at some time during that period and was rescued only through heroic taxpayer intervention. Heck, just a couple of weeks ago, Goldman announced a quarterly loss of over $400 million.</p>

<p>Therefore, while I can’t speak definitely about consulting as their earnings are shrouded in secrecy, I can pose the question in this way: how can the finance industry that has generated only modest profits at best over the last few years (after aggregating overall profits and losses since 2008) can nevertheless still afford such high pay when impressively profitable engineering firms such as Apple and ExxonMobil are somehow unable to afford such pay?</p>

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<p>I think a lot of the issue is that engineer’s salaries are based upon product profit margin. In that finance world it is based upon percentages of cash flows and accounts won. Kinda like glorified real-estate agents dealing with high priced homes. Different salary models, unfortunately.</p>

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<p>Yup, when there is a river of money flowing by nobody minds too much if you take sip.</p>

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<p>Professional service firms sell brain power and have significantly fewer expenses than most other industries so that translates to more money available for salaries and perks.</p>

<p>Banks typically spend about 45-60% of revenues in wages, im not sure how that compares across other industries but I imagine it is at least slightly higher.</p>

<p>This article is pointless… we get it already finance pays better but that doesn’t necessarily mean you shouldn’t take an engineering gig. Entry level analysts and associates have arguably the worst work/life balance of any other industry. There are more factors at play here.</p>

<p>Sent from my DROIDX using CC App</p>

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<p>Would that be the same brainpower that drove the finance industry off a cliff, necessitating unprecedented taxpayer intervention lest the entire industry fold? </p>

<p>If nothing else, I hope that the events of the last few years have dispelled all notions that finance firms somehow have more talent than do engineering firms. Indeed, market valuations seem to indicate that the opposite is true: Apple alone has a greater market cap than Goldman, Morgan Stanley, and JP Morgan combined while having far fewer employees. {Indeed, Apple has about the same number of employees as Morgan Stanley does, but enjoys a market cap that is larger by over an order of magnitude). </p>

<p>Given that Apple therefore actually seems to harness better talent than the finance industry has, why does finance continue to pay better? </p>

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<p>Well, I don’t know about that. I don’t think any public firm enjoys announcing losses; Goldman would almost certainly have at least broken even had it simply not paid its employees so highly. Goldman lost about $400 million last quarter, with 35000 employees, that would have meant that a pay reduction of $11k per employee would have meant that Goldman would have broken even. Given the high pay that Goldman employees make, surely they can tolerate a quarterly reduction of $11k. {After all, millions of people in this economy don’t even have jobs at all.} </p>

<p>And it is surely true that no industry - not even the finance industry - enjoys the political repercussions of a taxpayer bailout. Well, the truth is, if they took the giant pay premiums devoted to employees in the 2000’s and instead redirected them towards building capital reserves, they probably wouldn’t have needed bailouts. </p>

<p>So whether the finance industry actually cared whether their employees took sips from their rivers of revenue, they fact is, they should have cared. And they should certainly care now after having learned the hard lessons of 2008. But they nevertheless persist in paying their employees highly.</p>

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<p>I don’t know if this signature was supposed to be ironic or not, but I think it speaks to a core issue at hand: engineering innovation, such as the Droid or the Iphone, produces social value. It’s not clear whether financial innovation produces social value, or is merely a mechanism to line the pockets of bankers while stockpiling hidden risks that the taxpayers will later discover to their displeasure.</p>

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<p>There’s a difference between majoring in engineering and working in engineering.</p>

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<p>Well someone has been drinking the koolaid today…</p>

<p>Whoever argued that finance/consulting have better talent? They attract kids from top schools (engineers included, their are a ton of engineers on the street you know that right?) because they will throw 6 figures at a 22 year old who offers no real value and should not be making that much money.</p>

<p>Entry level finance/consulting jobs suck, they are miserable, your hourly rate comes out to be somewhere between a line cook at Micky D or a cashier at Wal-Mart. Working at apple would provide someone with a life outside of work therefore they don’t have to pay as much.</p>

<p>Professional service firms sell analytic brain power. That isn’t an opinion, that is a fact, it is what they do. You call McKinsey up when you need help aligning you’re company strategy with your resources - brain power. You call GS up when your contemplating a merger - brain power. To the point about the loss GS took this quarter, it has only ever had two losing quarters since going public and never taken a loss on a whole year. Apple on the other hand, has hand two losing years. I digress, their is no valid basis for comparing a retailer/tech company to a financial services company.</p>

<p>You sir, also have a very shallow idea of “social value.” Engineering innovation is great but I don’t see how my phone promotes true social value… since I view social value as, you know, value added to society… The financial industry doesn’t exactly promote social value either but does far more than just “line the pockets of bankers.” You are aware that the financial industry put the clothes on your back and commodity based food items in your fridge, right? I am in no way cleansing the banks of their sins in the mortgage crisis but if the tax payers had done something really crazy, like paid their mortgages, the situation could have been avoided as well. The government, society, and wall street are all equally to blame.</p>

<p>Finally, I didn’t hear everyone complaining during the boom years when wall street doubled your pensions every few years… stop pointing the finger at banks because GS threw out your application and you had to go design municipal buildings.</p>

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<p>Bingo! and we have a winner… engineering is probably one the best degrees you can get, right next to pure math or computer science. Get those degrees, go work in finance, and retire at 30.</p>

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<p>If you go to a top school and study math/comp science with a little Econ/finance, you can head to Wall Street and find a computational finance group - mostly MIT/Stanford/Berkeley/Carnegie Mellon folks- and watch the money roll in as you manipulate the market with your algorithms and high frequency trading.</p>

<p>I would rather see you go into the medical field, perhaps, but the money just isn’t there, so I understand.</p>

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<p>Wait, now I’m confused. On the one hand, you say that these firms don’t hire the best talent, but then on the other hand, you say that they sell brainpower, which is (presumably) talented brainpower. Otherwise, it raises the question of why would customers pay for untalented brainpower? So is the brainpower in question talented or not? </p>

<p>More importantly, we have a logical paradox. If finance firm brainpower is so talented, then why couldn’t they avoid the crash? But if they’re not talented, then why are they paid so well? </p>

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<p>Is that right? Goldman Sachs - along with most other banks - was technically insolvent in Q4 2008, hence necessitating widespread taxpayer and central banking bailouts (GS being one of the largest borrowers at the PDCF window that the Fed opened just for the investment banks.) Whatever you want to say about Apple, at least they never required a taxpayer bailout. At least they never required a customized central banking liquidity facility. </p>

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<p>I’m aware that commercial/retail banking and clearing services may have put the clothes on my back and food in my fridge. But it is not at all clear what structured finance ‘innovations’ and proprietary trading have done for society. </p>

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<p>That’s because Wall Street ingeniously managed to disguise all of the risks during that time. Wall Street inflated the bubble for their own benefit while ferociously vanquishing all attempts at regulation. </p>

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<p>Any firm that is ‘too big to fail’ and therefore relies upon government intervention, either explicit (as happened in 2008) or implicit (that is, in the future whenever the next bubble bursts) to survive is entirely fair game. If GS doesn’t like it, fine, then they can greatly expand their capital buffers (say, to 50%) while reducing their risk-weighted balance sheet to the point that they are no longer too big to fail. Until that time, everything that GS does is very much our business.</p>