CAMBRIDGE, MASS. — At this time of year all over America, graduating students are going forth from our colleges and universities to launch their careers. They do so at a time when our country faces a host of challenges at home and abroad, challenges that call for the most enlightened national efforts--efforts to adjust to a new stage in the evolution of the Soviet Union, to revitalize our educational system, to halt the spread of poverty, drugs and crime, to improve the quality and efficiency of our manufacturing sector, to strengthen our ethical standards.
If we are truly to overcome our nation's problems, we should expect to see many talented young graduates involving themselves in the struggle by serving in government agencies, grappling with problems of foreign affairs, trade policy and chronic unemployment; teaching in our public schools to lift our sagging achievement levels; revitalizing our manufacturing companies to restore their competitive position; working in poor communities to combat crime, homelessness and drugs, or preaching in our churches and toiling in our urban parishes.
But what are the facts? Are these truly the careers our graduates are choosing?
At Harvard Law School, the percentage of graduates going into public interest and legal aid has dropped to less than 2%, while the percentage of graduates entering government service has drifted downward from 4% or more 10 years ago to slightly more than 2% today. In the business school, only 22% of last year's class went into manufacturing, while 57% went into consulting or investment banking--double the percentage of just 10 years ago. From the Kennedy School of Government, only a third of the graduates went where you might expect them to go--to a job in federal, state or local government. More than 40% found work in the private sector, more than a quarter in private business or consulting.
At Harvard College we know only the aspirations of seniors--not their final choice of career. For them, business has become the most popular vocation, closely followed by law and medicine. Only 7% say that they are interested in government and far fewer will actually make a career in public service. Less than 2% of the students plan to teach in public schools, and virtually none are interested in the ministry, for which the college was founded.
Nationwide the situation is not so different. In the last 20 years the share of graduating students interested in education has fallen by 60%. Along with this decline come disquieting reports that public school teaching draws from the least talented of college seniors across America. As for careers in government, the percentage of students interested in public service has dropped over the last 20 years from 12% to 6%. In short, the career plans of our students do not fit very closely with society's most pressing needs. Much of the explanation, I fear, has to do with compensation.
When I left law school in 1954, the starting salary for Wall Street firms was $4,200, while starting teachers could earn $3,600. Today, the Wall Street salary is $70,000-$75,000 and teachers get $17,000-$18,000, a lower paycheck in real dollars than was the case 15 years ago.
For business graduates, a similar shift has occurred. In 1976, the starting salary advantage for individuals entering consulting firms and investment banks was 10% higher than the salary of those joining manufacturing companies. By 1986, the premium for consulting or investment banking jobs jumped almost 20%, and the true premium may be closer to 50% if bonuses are counted in.
Fifteen years ago, corporations and consulting firms paid almost the same starting salaries as government agencies and not much more than public schools. Today, consulting firms and corporations pay 50% more than government agencies and public schools.
It is always tempting to explain these results by claiming that the market knows best. By the magic of an invisible hand, it is held, salary differences reflect the sentiments of the public as to what kinds of work matter most. With due regard for Adam Smith, however, it is a strange process that pays young consultants more to write reports than it pays to the young executives who must ultimately execute the decisions. Similarly, it seems peculiar that people in private think-tanks are paid much more to offer advice on government policy than the public officials who actually make policy and carry it out. Or that the lawyers who defended Ivan Boesky and Michael K. Deaver were paid several times more than the lawyers who prosecuted them in the public's behalf.
The explanation, I would assert, is not an invisible hand. If investment bankers and management consultants and corporate lawyers and chief executive officers had their salaries appropriated by Congress or determined by a city council or established by a congregation or a local school board, one would expect very different results from those we currently see.