Economics, Politics, and Religion: Social Justice

The first-job means different things to many.  What position or a sector one chooses to work in is not merely an economic factor, but rather a social one, as well.  While it is a very interesting subject to discuss why some people choose a specific job, I don’t mean to talk about it here.  Instead, I would like to discuss how to be strategic about finding a job in this tough economy, especially if you are an economics (or finance) major.

Undoubtedly, it is obvious that the economy is bad.  Many students are having a horrible time finding jobs.  While I sympathize with all recent grads who are a little down on luck, I firmly believe that the reasons most students aren’t able to find jobs is more due to their rigidity in thinking outside the box, then the job market being absolutely dry.  For example, overwhelming majority of my fellow economic majors at my alma mater were still trying to get into investment banking in 2008-09, even though the financial market had crashed.   Investment banking for long was a symbol of a power, money, and prestige.  Even after the collapse, most students still dreamt of getting an access into the field to share the fruits of the industry.   The slow down in the financial sector meant a dearth of jobs in the sector, not a directly proportional lack of demand of economic majors.

Most students forget that now, more than ever, the economy requires specialization.  Which means that undergrad (for the most part) does not cut it anymore.  Upward mobility, after some specific level, requires a graduate degree.  In order to get into a competitive graduate program, it matters less what job title one has, or if a person worked for #2 consulting firm or #10, but rather: the experience one gains between graduate and undergraduate programs and even more importantly, what one has produced.  For example, if you are stuck as an entry level business analyst at Goldman for three years, it means a lot less than being promoted three times in three years at a boutique consulting firm.

The key to getting a job in this economy is being strategic.  Understand your goals (at least have some idea about it) and align your career trajectory along that path.  Be rational and realistic about your goals.  Understand the difference between desire and goal.  You may have a goal of working in finance; however, your desire maybe to work in investment banking.  Being rational and realistic would require you to be flexible with the changing economy.  For example, regulated finance only applies to 10 to 20 percent of the world population.  Many practitioners and academics realize the potential of scale and the benefits of regulated finance that can be brought to both, the finance industry and the other 80%.  Having worked in the international affordable housing finance sector, I can assure you that the puzzle of affordability is harder to solve than understanding fixed income finance.

I don’t know how exactly the dynamics of the new economy will develop.  History tells us that we will make exactly the same mistakes again.  However, my optimistic side believes that the economy will get more diverse.  By diverse, I don’t mean jobs in the “green” sector.  In fact, I believe that practitioners and academics alike have seriously considered the need to bring the formal economy to all 5 quintiles of the population, instead of the top one.  In short, I believe that microfinance will be a key industry in the next 10 to 15 years, both in terms of growth and innovation.  Of course, the picture is not as rosy as my pervious sentence may smell.  Many experts have already started ringing alarm bells over the practice of microfinance lending and the concentration of credit amongst the top tier microfinance institutions, which is perhaps inhibiting inefficiency (sound familiar?).  In any event, microfinance is a good industry to traverse, if you are interested.

Long story short, yes, the market is dry, but not as dry as you think.  If you think you did well in school, the chances are you actually did well.  If you are passionate about working in an industry, you will have to be a little more strategic.  The key is having a clear set of goals, which means being more realistic about the market conditions and less idealistic about your dreams of “the ideal job.”