Millennials - a Snapshot?

[ProdigyofZen]

Re: Millennials - a Snapshot?

The problem is most of the people on this site are 40+ years old and graduated college in the 70s, 80s or early 90s.

Unfortunately none of what you experienced going to school and getting a job afterwards holds water anymore.

The stark reality especially in certain fields like Finance, is if you do not have a degree from a top finance or ivy school you have no chance of even getting an interview at most top hedge funds or money managers or mutual fund companies etc.

I have a friend who is 42, graduated from Boston College undergrad, got his JD and then his MBA from Purdue yet was not able to obtain employment at a top hedge fund because they always asked "why didn't you go to an ivy school?"

He did however get the chance to go to work for a money manager as an analyst and made enough money/connections to start his own fund.

The simple reality is that if you went to a top school, no matter what your major is you will have an abundance of opportunity throughout your life. You will be virtually given at least an interview for every job you apply.

I have friends who went to Ivy schools and others who went to state schools etc and I clearly see the difference in their opportunities even though one is no smarter or better than another.

I can imagine the same is true now of the Tech industry. They only want the kids from Stanford or MIT etc.

This is helping to cause more of a bifurcated economy where the top 10% have everything and the bottom 90% are left with decreasing income and standard of living.

Experiences may be different in corporate America.

[jpatter666]

Re: Millennials - a Snapshot?

The problem is most of the people on this site are 40+ years old and graduated college in the 70s, 80s or early 90s.

Unfortunately none of what you experienced going to school and getting a job afterwards holds water anymore.

The stark reality especially in certain fields like Finance, is if you do not have a degree from a top finance or ivy school you have no chance of even getting an interview at most top hedge funds or money managers or mutual fund companies etc.

I have a friend who is 42, graduated from Boston College undergrad, got his JD and then his MBA from Purdue yet was not able to obtain employment at a top hedge fund because they always asked "why didn't you go to an ivy school?"

He did however get the chance to go to work for a money manager as an analyst and made enough money/connections to start his own fund.

The simple reality is that if you went to a top school, no matter what your major is you will have an abundance of opportunity throughout your life. You will be virtually given at least an interview for every job you apply.

I have friends who went to Ivy schools and others who went to state schools etc and I clearly see the difference in their opportunities even though one is no smarter or better than another.

I can imagine the same is true now of the Tech industry. They only want the kids from Stanford or MIT etc.

This is helping to cause more of a bifurcated economy where the top 10% have everything and the bottom 90% are left with decreasing income and standard of living.

Experiences may be different in corporate America.

There was a fascinating article recently on the Tech industry. They don't *care* what college you went to -- what they care about is whether you are under 35. I can state that this is very true in the Valley. Less so elsewhere.

http://www.newrepublic.com/article/1...-brutal-ageism

Another article I came across this morning was how across the world we are reverting to a more Old Europe type structure -- where your background and education (social structures) are critical.

Capital In The Twenty-First Century, a “sweeping account of rising inequality” by French economist Thomas Piketty, is the most talked-about economics book in years. An early reviewer calls it “one of the watershed books in economic thinking”. Picketty argues that “modern capitalism has an internal law of motion” that leads, most of the time, to the rich getting richer, and the rest trailing ever further behind

http://www.newyorker.com/arts/critic...urrentPage=all

[Polish_Silver]

My job experience totally opposite to POZ

The problem is most of the people on this site are 40+ years old and graduated college in the 70s, 80s or early 90s. Unfortunately none of what you experienced going to school and getting a job afterwards holds water anymore. The stark reality especially in certain fields like Finance, is if you do not have a degree from a top finance or ivy school you have no chance of even getting an interview at most top hedge funds or money managers or mutual fund companies etc. I have a friend who is 42, graduated from Boston College undergrad, got his JD and then his MBA from Purdue yet was not able to obtain employment at a top hedge fund because they always asked "why didn't you go to an ivy school?" He did however get the chance to go to work for a money manager as an analyst and made enough money/connections to start his own fund. The simple reality is that if you went to a top school, no matter what your major is you will have an abundance of opportunity throughout your life. You will be virtually given at least an interview for every job you apply. I have friends who went to Ivy schools and others who went to state schools etc and I clearly see the difference in their opportunities even though one is no smarter or better than another. I can imagine the same is true now of the Tech industry. They only want the kids from Stanford or MIT etc. This is helping to cause more of a bifurcated economy where the top 10% have everything and the bottom 90% are left with decreasing income and standard of living. Experiences may be different in corporate America.

1) I went to a top school and I do not get an interview for every job I apply to. 2) I went through the interview/offer cycle in 2007 and the "ivy league preference" seemed no stronger than in 1991. 3) My bosses have usually graduated from "no name" colleges. In one case, I had a boss from Stanford, but in another, he had not graduated from any college. 4) Engineers do not talk a lot about who graduated from where. Companies want results, not pretty diplomas on the wall. I think people from "no name" get more respect because no one can accuse them of coasting on credentials. 5) If a "top hedge fund" does not recruit fairly, they will not have the "top people". So why would you want to work there? I think experiences in Finance cannot be generalized.

[jpatter666]

Re: My job experience totally opposite to POZ

1) I went to a top school and I do not get an interview for every job I apply to. 2) I went through the interview/offer cycle in 2007 and the "ivy league preference" seemed no stronger than in 1991. 3) My bosses have usually graduated from "no name" colleges. In one case, I had a boss from Stanford, but in another, he had not graduated from any college. 4) Engineers do not talk a lot about who graduated from where. Companies want results, not pretty diplomas on the wall. I think people from "no name" get more respect because no one can accuse them of coasting on credentials. 5) If a "top hedge fund" does not recruit fairly, the will not have the "top people". So why would you want to work there? I think experiences in Finance cannot be generalized.

I think there absolutely are colleges and specialties where your degree and where you came from -- while not a critical point -- is still a major factor. I'm a computer engineer -- for us, it's not the school (at least not at first) but what you've done. I'm going to care about your accomplishments. But my wife has a MBA from Thunderbird (which you may or may not have heard of) -- and their network is impressive. And if one of the interviewing managers is from Thunderbird, it (IMHO) factors in.

Looking from the outside in, seems to me the more abstract (or perhaps people-oriented) the field is [Finance, Legal, Business] the more connections make a difference and thus a university with a "network" matters more. Concrete fields such as engineering rely less on such networks.

[ProdigyofZen]

Re: My job experience totally opposite to POZ

This is the problem, if you don't go to a top school you don't get the job at Goldman Sachs Investment Banking Division or at a top money manager as a junior analyst etc.

Thus you have to take other "lower stature" jobs so in 5 years after you have experience they still won't pick you based off of accomplishments because you don't have the same "pedigree" as the guy who went Harvard ---> GS ----> Greenlight Capital

[Polish_Silver]

CEO's to blame---I think so!

There was a fascinating article recently on the Tech industry. They don't *care* what college you went to -- what they care about is whether you are under 35. I can state that this is very true in the Valley. Less so elsewhere.

http://www.newrepublic.com/article/1...-brutal-ageism

Another article I came across this morning was how across the world we are reverting to a more Old Europe type structure -- where your background and education (social structures) are critical.

Capital In The Twenty-First Century, a “sweeping account of rising inequality” by French economist Thomas Piketty, is the most talked-about economics book in years. An early reviewer calls it “one of the watershed books in economic thinking”. Picketty argues that “modern capitalism has an internal law of motion” that leads, most of the time, to the rich getting richer, and the rest trailing ever further behind

http://www.newyorker.com/arts/critic...urrentPage=all

He claims CEO compensation is a big part of the problem. Perhaps one could structure the corporation so that executive salaries are a fixed multiple of the employee median income. Give those fat cats an incentive to raise everyone's income. (oops! they would just terminate the low income people)

At larger corporations, the CEO's are more administrators than innovators.

It's a good article, but the "blame it all on Reagan" is overdone. He needs to focus more clearly
on leveraged finance. Along with CEO's, that's were much of the 1% is. The income equality grew during
Clinton's years, and he was quite friendly to FIRE interests.

[jpatter666]

Re: CEO's to blame---I think so!

He claims CEO compensation is a big part of the problem. Perhaps one could structure the corporation so that executive salaries are a fixed multiple of the employee median income. Give those fat cats an incentive to raise everyone's income. (oops! they would just terminate the low income people)

At larger corporations, the CEO's are more administrators than innovators.

Unlikely to ever happen, but I agree CEO compensation (and stock options) is a huge part of the problem. Focuses on the short-term and IMO relies on luck -- a CEO in charge during an economic expansion is naturally going to make more money. But they take the credit for their "leadership". The number of CEOs who ran the organization into the ground and then left with a huge golden parachute.....

Much of the problem is that the compensation is set by the board -- which is usually made up of other executives. They have NO reason to lower pay and every reason to raise it. Absolute conflict of interest IMO.

Honestly, not sure what can be done (effectively).

[Polish_Silver]

Re: CEO's to blame---I think so!

Much of the problem is that the compensation is set by the board -- which is usually made up of other executives. They have NO reason to lower pay and every reason to raise it. Absolute conflict of interest IMO.

Honestly, not sure what can be done (effectively).

Article claims that CEO pay was formerly limited by "public outrage". It would be hard to prove that. The pay ratio is higher in the US than in Japan. Why is that?

Could a metric of long term health be invented, and peg the CEO compensation to that?

It used to be that people stayed at the top of companies for decades. Not this 2 year musical chairs thing.

EJ has never solved this problem, that I know of.

In principle, a company would lose market share to leaner competitors. In practice, that does not work.

[Slimprofits]

Re: CEO's to blame---I think so!

Article claims that CEO pay was formerly limited by "public outrage". It would be hard to prove that. The pay ratio is higher in the US than in Japan. Why is that? Could a metric of long term health be invented, and peg the CEO compensation to that? It used to be that people stayed at the top of companies for decades. Not this 2 year musical chairs thing. EJ has never solved this problem, that I know of. In principle, a company would lose market share to leaner competitors. In practice, that does not work.

What about increasing focus on stock options, is that perhaps what changed the course of executive compensation?

[jpatter666]

Re: CEO's to blame---I think so!

What about increasing focus on stock options, is that perhaps what changed the course of executive compensation?

It certainly was a major factor IMO -- allowed them to keep "salary" low. That and then learning to game the system to juice the stock price and reap outsized rewards.

There has been some movement to retard gaming the system -- longer vesting for executives and clawbacks if the price falls. But these are more exceptions than the rule.

[don]

Re: CEO's to blame---I think so!

It certainly was a major factor IMO -- allowed them to keep "salary" low. That and then learning to game the system to juice the stock price and reap outsized rewards.

There has been some movement to retard gaming the system -- longer vesting for executives and clawbacks if the price falls. But these are more exceptions than the rule.

The substantial and climbing corporate debt is in large part stock buy-backs, fattening portfolios.

[aaron]

Re: Millennials - a Snapshot?

My suspicion is that, compared to people with comparable cognition and work ethic, the college education adds nothing to life time income.

I thought the opposite was a well-established fact, and that was in aggregate. If you take 2 comparable people and give one a degree and the other none, I am sure you get even larger contrasts.

Has the price of college truly exceeded inflation by a large amount? I do not mean fuzzy math inflation, either. How much if priced in gold?

http://pricedingold.com/college-tuition/

I bet you will find that only wages in the Most Favored Industries MFI category have kept up with real inflation.

[aaron]

Re: CEO's to blame---I think so!

What about increasing focus on stock options, is that perhaps what changed the course of executive compensation?

The 100-year low in tax rates for exec compensation is the reason.

[lakedaemonian]

Re: Millennials - a Snapshot?

Someone did a study recently to calculate the ROI on a college education.
The results are in a nice interactive format at their website here http://www.payscale.com/college-roi/

The list below shows the overall top ten by 20 year ROI %
By percentage, Georgia Tech wins at nearly 12%, and Colorado School of Mines is just behind at 11%
I sorted it a few different ways -using just engineering, or just by state..
Results remain similar. A few top schools return 11%, a few more at 10%, and most great schools return 7% or 8%.

Now, a quick look shows that student loans cost about 7%.

That means that on average, a great student that gets a degree in engineering at Stanford or Purdue, who borrows the money to go, will end up no better off than her high school classmate who did not go to college.
Her banker will make a bundle on her loan, and her college will keep the six-figure tuition, but she is not really much ahead.

I guess she should be more grateful for the opportunity to build so much character by doing a few years of advanced calculus and physics.

Great website, but a bit thin on total universities covered.

I suspect MOST would look like a financial train wreck of indentured servitude.

Also, I think there would be some positive surprises likes College of the Ozarks.

Tuition free as students work 15 hours per week on campus in lieu.

I reckon that would put a school like College of the Ozarks at the top of the ROI and work ethic/humility list as well as possibly at the bottom of the entitlement list.

The funny thing is schools like College of the Ozarks were pretty much laughed at until recently