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How Wall Street's Life-Ruining Work Habits Hurt All Of Us

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WOLF OF WALL STREET
NEW YORK, NY - NOVEMBER 20: Leonardo DiCaprio is seen on the set of 'The Wolf of Wall Street' on November 20, 2012 in New York City. (Photo by Alo Ceballos/FilmMagic) | Alo Ceballos via Getty Images

You might feel no sympathy for young bankers and the punishing hours they work. But you might want to pay attention, because their bad work habits could be contagious.

When bankers leave Wall Street mid-career for new gigs in consulting, media or other industries, they often take their taxing work practices with them, influencing their new colleagues, according to a study due to be published in the forthcoming summer issue of the journal The Sociological Quarterly.

"Many people leave at around age 35 because they're just burned out -- they can only take this work for a relatively short period of time," said the study's author, Alexandra Michel, a professor at the University of Pennsylvania. But the "big disappointment for many," she added, is that switching jobs doesn't help ex-bankers escape the long hours, strange sleeping patterns or physical and psychological health problems that marked their careers in finance.

The notion that long hours equal good work is so deeply embedded in bankers' psyches that it's hard to shake even when those workers leave banking, according to Michel, whose study tracked four groups of investment bankers at two firms over 12 years.

robert rubinFormer Treasury Secretary and Goldman Sachs co-chairman Robert Rubin.

Some ex-bankers simply take on other notoriously time-consuming jobs. Former Goldman Sachs co-chairman Robert Rubin -- who, during his career in finance, insisted on holding meetings even when back pain forced him to take the meetings lying down -- became the U.S. Treasury Secretary. Former Goldman CEO Jon Corzine became the governor of New Jersey and later CEO of the commodities brokerage firm MF Global, which collapsed in 2011.

Former Merrill Lynch analyst Henry Blodget, who was kicked off of Wall Street in 2003 after settling securities-fraud charges, went on to found Business Insider, a financial news site known for prolific posts at all hours of the day. Blodget starts working as soon as he gets up at 5 o'clock every morning, Bloomberg Businessweek reported in 2010.

henry blodget

Henry Blodget, founder and editor in chief of Business Insider.

Other industries often end up adopting the management practices of investment banks. Some of those habits include moving groups of workers together through the stages of their career, mixing senior and regular staff in open offices, and "results-only" evaluations where workers are measured on how they perform, not when and where they get the work done. All of these, Michel said, add to the pressure to work more hours.

"What happens in investment banking is a sort of a barometer for what's going to happen in the rest of the economy," Michel said.

For a less famous example, take one former banker who recently left a big bank for a smaller private equity firm. The 23-year-old, who asked not to be identified to protect his career, said that when he was in his old job, his parents and friends outside of the industry didn't quite understand why he felt the need to come to work at 9 a.m. and leave at midnight or later every day, given that his supervisors rarely made explicit demands for him to stick around. But he stayed late every night -- just like everyone else -- because he still had hours of work to do after his supervisors left.

"You essentially committed to it full-time and full-time being your life," said the former banker of his old job. "There's really nothing outside of that."

But even in his new job, the ex-banker still regularly pulls 12-hour days. And he may be setting a bad example for his colleagues, influencing other workers to stay late, too.

This nagging feeling that you always have to be working is what Michel calls "the autonomy paradox." Some employees think they're autonomous because their supervisors say they can come and go as they please, and provide them with things like free dinners and in-house gyms. The reality, though, is that these banks are at the same time promoting practices that make people show up to work just to be at work, Michel said.

"If people are truly making their own decisions about how and when to work, why do they all work the same pattern?" she said. "Even when bankers who work 90 to 100 hours a week had nothing compelling to do and no one was forcing them to work, they were there cleaning cubicles."

young wall street

Far from productive, the attitude these bankers bring to their new companies is just "stupid," according to Brigid Schulte, the author of Overwhelmed: Work, Love and Play When No One Has the Time.

"It's so much of what's wrong with corporate America," said Schulte, who is also a Washington Post reporter. "You are just physically there, but you are not doing your best work ... Working this way makes us stupid. It's the kind of thinking that leads to the global banking crisis."

In her book, Schulte cites study after study showing that working extreme hours just for the sake of showing up is a habit that taxes workers' minds, crimping their ability to come up with new ideas and products. To be creative, workers actually need a few minutes to think about something other than work.

"It's almost like there's this weird religious devotion to extreme work hours, as if that's the only way we can prove we're committed and we're good workers," she said. "And it's just wrong."

As one banker interviewed by Michel put it: "Even the people I meet randomly at the gym, they cannot appreciate my skills. It doesn't mean anything to them that I worked on deal X. But they do understand and have awe for hard work."

Managers could help change the culture by judging workers on things like creativity and innovation, Michel suggested. In Denmark, said Schulte, it's common for employers to judge workers on how well they balance work and life.

As outcry over Wall Street's long hours mounted after the death of a Bank of America intern last summer, some banks indicated that they would try to address the culture of overwork. Many started telling young staffers to stay away from the office a few days a month.

But both Michel and Schulte agree that the culture hasn't changed despite such mandates.

"What happens is that people now work secretively," Michel said.

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