In a philosophy class a while back, I remember a TA trying to explain to a rather confused Kellogg student the notion of a priori truths: those things we know are true without any experience of them.
“Just try to think of something you know is undeniably true,” the TA explained patiently. “Something like, ‘It is an a priori truth that two plus two equals four.’ ” Deep in thought, the Kellogg student stared at his desk and then suddenly looked up, his eyes alight:
“I get it! Of course! It is an a priori truth that finance has all the best jobs!”
The TA sighed and tried explaining it to him again, but the Kellogg student might as well have been right: For the past two decades or so, it has been an undeniable fact that the jobs in finance – and more importantly, the paychecks – have drawn in the best and brightest graduates.
OK, maybe that wasn’t exactly how the class discussion went. But is the Kellogg student’s belief still true? This is especially pressing for seniors considering a 100 hour-per-week finance job in hopes of a hefty paycheck.
A 2008 study suggests it’s no longer the case. The paper’s two authors from New York University and the University of Virginia argue finance has become increasingly lucrative since the 1980s, but the skyrocketing paychecks of the financial world will likely begin to sink back to earth.
These predictions aren’t just based in the events of the last year or two, either. The paper’s authors predict that over the long-term, financial paychecks are likely going to slope like the Aspen hills so preferred by the financiers of yore.
As Paul Krugman claimed in a different article, it used to be academia and government work that were the hot tickets for top graduates. That’s right: The two ugly sisters of today’s corporate-loving hiring world were once where the best of the best went. It was only after Wall Street firms were able to offer stratospheric paychecks that graduates began to value jobs in finance over academia.
Overall, the fact is that the Kellogg student was totally wrong. It’s not at all an a priori truth that finance jobs will be as attractive as they presently are. Quite the opposite actually: Without its high paychecks, the long hours and constant travel of finance make it sound like a pretty unappealing field to call one’s own.
This should serve as a warning to those who treat finance as professional nirvana. There’s not all that much to substantiate it: Jobs on Wall Street only became as attractive as they are now after six- and seven-figure paychecks were attached to them.
As hard as it may be to imagine, there might be a day again in which finance, without its confidence-boosting paychecks, is treated the same way as academia and government are now. Undergraduates pursuing finance with dreams of gilded luxury might want to pay attention as they look down the road.
Weinberg senior Mac LeBuhn can be reached at [email protected].
