Much of Mr Michael Lewis' graphic description of life for junior bankers in the early 1980s still rings true today. Fresh college grads “gave themselves over entirely” to firms, working so many nights and weekends that one friend learnt to nap on the office toilet, the author recalled in his book Liar's Poker. But one thing is changing fast: The pay.
A recent wave of raises meant to address complaints that rookie bankers, known as analysts, work too hard for too little means this year's newbies will get salaries of at least US$100,000 (S$133,900), before five-figure bonuses.
Amid an escalating debate over income inequality, junior bankers are set to earn almost five times – or more – the median wage of fellow young college graduates, data from the united states Census Bureau shows. Back when Mr Lewis comically bombed his initial interviews to join Wall Street, he was chasing the prospect of earning what he saw as a whopping US$25,000 salary, about twice the median then. Adjusted for inflation, it translates to roughly US$72,000 now.
After junior bankers were pressed to do even more during the coronavirus pandemic, virtually every firm – including Goldman Sachs, JPMorgan Chase and Bank of America – sweetened their salaries. On top of that, some industry leaders offered assurances that newcomers would have manageable workloads, regular sleep and at least some Saturdays off.
The advances, fair or not, mean junior bankers are pulling further ahead of their counterparts in a long list of other professional fields, where wages have stagnated for decades under pressure from automation, globalisation, weakened labour power, a deepening pool of college graduates and other economic forces.
Banking is now among just a few industries – including technology, engineering and consulting – that together account for the vast majority of jobs in the top 10 per cent of entry-level salaries, according to data from Glassdoor. And successful junior bankers enjoy ample prospects to keep growing their income for years to come.
So while they might start setting aside savings for a mortgage, many of their contemporaries will struggle to pay off student loans.
Year after year, investment banks were among those shelling out more as they vied with ascendant Silicon Valley giants for the best candidates and tried to head off poaching by investment firms, such as buyout and hedge funds. College grads are particularly valuable to tech firms, because they're trained on the fast-moving frontier of computer science.
Banks are willing to pay more to hire the most elite candidates, in part because executives are convinced that “exceptionally able people are always in scarce supply”, said Mr Anthony Keizner, a managing partner at recruiting firm Odyssey Search Partners. It doesn't matter if colleges' graduating classes have swelled because banks are setting their sights on the valedictorians, he said.
“People in finance aren't being hired just because they've done economics and accounting and come in with Excel skills.” Banks are interested “in the best of the best”.
The current debate over analyst pay erupted after recruits were forced to sequester in tiny apartments or move back in with their parents during the pandemic, straining to keep up with demands for slide decks as economic turmoil drove a deluge of corporate deals. When trainees at Goldman drafted a presentation detailing the brutal demands on their time, it leaked to the Internet and all hell broke loose.
Soon, Morgan Stanley, Citigroup, Deutsche Bank, Barclays, Evercore, Guggenheim Partners, PJ Solomon and Nomura Holdings were also among firms that announced pay raises.
Some bankers from modest backgrounds say they appreciate that Wall Street is a place where hard work can pay off.
Mr David DeFronzo recalled parking his grocery delivery truck mid-route in 2009, leaving the keys in the ignition to keep the refrigerator running while he attended his high school graduation rehearsal. He eventually saved enough for community college, and while there landed an internship at State Street. He's grateful for the shot it gave him.
“It's all perspective,” said Mr DeFronzo, now 30. “Relative to waking up at 3am to drive a truck through 12pm, going to school and washing dishes overnight, the workload was a lot easier.” He eventually earned a degree from the University of Massachusetts and moved on from State Street in 2017, jumping to Grant Thornton.
Many junior bankers hail from families that are well off or have deep ties to the industry, giving them an advantage in interviews.
“For a wealthier classmate who grew up summering with their parents' colleagues, it's sort of a natural social exercise,” said Ms Tara Falcone, a former hedge fund analyst who founded ReisUP, which advises low-income college students on personal finances.
She said she grew up poor and was the first in her family to go to college, graduating from Yale University. “People from my background are told growing up not to ask for handouts, not to use people,” she said. That social divide can dissuade some from applying to Wall Street, despite the US$100,000 salaries.
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