While many Millennials face underemployment for the first few years after they graduate from college, there are some occupations in which bright young things with a year or two of experience can expect to earn $85,000 per year.
One of these is technology, of course. Another is the financial sector, where the doldrums induced by the post-crisis recession finally seem to be wearing off.
Recently, some of the biggest banks, such as Bank of America, Goldman Sachs, JPMorgan Chase & Co., and Morgan Stanley will increase the pay of junior bankers by 20% to 25%, beginning next year. Citigroup is also considering such a move.
How much is 20%?
A raise of 20% is huge for anyone, particularly for employees that have been on the job for only a short time. Using Goldman Sachs as an example, Bloomberg notes that first-year analysts can make anywhere from $70,000 to $90,000, which means that the lowest paid worker will soon be making closer to $85,000.
That raise affects only the employee's paycheck, which means that bonuses are extra. Although not as robust as they were before the financial crisis, many will receive fairly hefty bonus payouts as well, pushing total compensation well into six-figure territory.
Change is in the air
These compensatory changes come not only as banks begin to regain their own financial footing, but in response to several years of bad press regarding the treatment of its youngest employees.
This spring, big banks began to enforce weekends off for young interns, following a rash of deaths involving overworked newcomers in the previous few months.
Around the same time, Wall Street firms began to realize that the crop of newly minted business school graduates was thinning, making recruiting more difficult. A kinder, gentler financial employment climate was created, where time off and higher pay were two enticements offered to attract the best new talent.
There is good reason to worry: only 31% of Harvard graduates sought jobs on Wall Street over the past couple of years, compared to 47% right before the crisis. As banks licked their wounds in the aftermath, recruiting young talent was put on the back burner. Many Ivy League grads, who would otherwise have flocked to the financial sector, sought work elsewhere.
The new "job of the future"?
Where did those super-achievers go, if not to Wall Street?
Very likely, many went to work for large technology firms. According to the Bureau of Labor Statistics, financial analyst jobs generally require a bachelor's degree with coursework in similar areas as tech: statistics, mathematics, and engineering. This state of affairs has not gone unnoticed by the big banks, and they are working hard to rectify the situation.
Back in 2012, BLS reported the median pay for a financial analyst as $76,950, with the highest paid bringing home over $148,000 annually, while the lowest-paid made less than $47,000. Even two years ago, growth in this sector was predicted to be faster than average through 2022.
Moving forward, it's a no-brainer that both pay and job growth are set to escalate. For those with the chops to dive into a career with the fabled firms of Wall Street, the future has never looked brighter.