An Insider's Look at Life on Wall Street

Written by Stephanie Proft Tuesday, June 19 2012

Snapshot: Karen Ho, Author and Professor, University of Minnesota
Karen Ho was about a year into her doctoral program in anthropology at Princeton University in 1995 when AT&T laid off a record 40,000 employees, an action that was followed by soaring stock prices. Perplexed and intrigued by this phenomenon, Ho decided to take a leave of absence to study Wall Street internally, first as an employee at Banker's Trust and then by conducting extensive interviews with employees at a number of Wall Street institutions.

In her book “Liquidated,” Ho examines the culture of Wall Street in the years leading up to the financial crisis using anthropological methods to shed light on its ideological workings, cultural practices and the implications these values have on corporate America in general. Her findings illustrate the pervasive model of the “ideal Wall Street worker,” what that means for people who are not normative, upper-middle class white men and the myth of the “money meritocracy.”

Womenetics: Our readers might not be familiar with what exactly a cultural anthropologist does. Could you describe your work in layman's terms, particularly as it relates to “Liquidated”?
Karen Ho: Anthropology at its broadest is the attempt to understand the natives' points of view – whoever the “natives” are. It could be any group of people, community, set of ideas, etc. While anthropologists analyze and interpret their worldviews and cultural practices after sustained fieldwork, the point is to understand the world and their practices as they understand it. It's important to anthropologists not just to presume that Wall Street investment bankers or worshippers in Evangelical churches have a preconceived set of ideas or identities; we don't want to stereotype or externally impose our own ideas are theirs. One of the primary tenets of anthropology is to understand people's social worlds from their points of view, but in doing so it's important to recognize that there is a multiplicity of views held within a group that change over time.

Anthropology has historically studied the relatively marginalized, the relatively powerless. Part of where my own contribution comes in is to take the longstanding strengths of anthropology – long-term, engaged field research to understand the complexities of a culture, and apply them to studying the powerful. Because over the past thirty years, Wall Street financial institutions have amassed undue influence on many of our lives, whether it's through our 401(k) plans, corporate downsizing or how corporations should govern and behave through their employment practices. Because Wall Street’s demand for short-term shareholder value had come to dominate the larger economy, my desire was to understand how finance worked, how it solidified its own legitimacy and to trace its larger socio-economic ramifications.

Womenetics: I'm sure you had some expectation of what it was going to be like on Wall Street. Did your experience in working on Wall Street and doing the fieldwork live up to those expectations? What things surprised you, if any?
Ho: Many things actually surprised me. My trajectory that I talk about in “Liquidated” is that I took a leave of absence from graduate school to work for a year at Banker's Trust, which is now Deutsche Bank. All of us were downsized from our group. I then came back to Wall Street no longer as an employee but as a field worker and began to talk to, interview, hang out with the people I had made contact with while I was working on Wall Street and also through alumni groups, etc.

One of the things that I found really surprising is that before I had worked on Wall Street, I had imagined that in many ways Wall Street promoted insecurity and what I call a “culture of liquidity” on work practices in general, especially in corporate America. As I just described, the stark example that propelled me to do fieldwork was what happened with AT&T; they announced the largest downsizing in corporate history, and the next day their stock prices shot up. As an outsider I thought, “Oh, my gosh. This seems very strange. How could a corporation induce what seemed from my perspective to be massive worker insecurity, pain and dislocation, and on the other hand, Wall Street seems to be cheering?”

I had a feeling that Wall Street wasn't cheering because they are simply masochists, but they do things because, according to their worldview, they feel like it promotes a certain kind of socioeconomic good. What I wanted to explore was how could Wall Street actors make sense of this. Why was it rational for them and how did they interpret their actions as imbued with social purpose?

I had imagined that Wall Street institutions were the downsizers – the people advocating for constant change and restructuring in order to increase short-term stock prices (which, as our current economic recession demonstrates, often ends up mortgaging the long-term productivity and stability of the corporation) and that corporate America were the folks that were tripping all over themselves trying to live up to Wall Street's expectations. But what surprised me was that Wall Street workers, the highly privileged employees who worked in the front office and were recruited from the most elite colleges in the U.S. – investment bankers, traders and management consultants – they were plagued with as much job insecurity and revolving door employment as many of the other corporate workers. It surprised me that the downsizing and insecurity they had recommended for others were precisely what they practiced themselves, as opposed to Wall Street being a stable institution. I was thus alerted to investigate the institutional work culture of Wall Street to the extent that their organizational culture became the model that other workplaces began to emulate.

Womenetics: A recent Reuters article focused on how powerful Wall Street women were suffering layoffs in the wake of the financial crisis like, Ina Drew, JPMorgan Chase's CIO, who was one of the best-paid members of the company. Does it surprise you that these formerly applauded women are the ones being let go?
Ho: This certainly applies to many other industries as well, but Wall Street claims that they're a “money meritocracy,” which in a nutshell means the belief thatWall Street is so greedy that they are inadvertently meritorious. All they care about are departments and employees that make money for them; they don't care about gender, race or sexuality. Their self-understanding is that “We're so greedy that we can't discriminate.” What I demonstrate in “Liquidated” is that this principle of a “money meritocracy” is a myth. When someone discriminates, it's often mis-portrayed as an individual act of meanness, but in many ways institutions structure these kinds of practices – often unintentionally and invisibly.

One of the structural ways that Wall Street perpetuates gender and racial inequality is that they continually blur “work life” and “social life”, allowing “after work” time and events to influence the perception of job performance. For example, according to Wall Street practices, socializing outside of work gets counted as work; daily life actually becomes “work time.” For example, women often feel uncomfortable or marked in the social spaces that not technically declared as work despite the fact they function as such – the after-work drinking, going to strip clubs, golf outings, highly masculine steak dinners characterized by loud, off-color humor, etc. Many of my informants would say “Someone got on the better side of that client by spending time at this country club, but I don't belong to that country club.” or “They got on the deal because they golf.” And these people might not even be particularly good at their jobs – their Excel spreadsheets are sub-par, but they got invited by Merrill Lynch on behalf of their client to golf at Pebble Beach. The misconception that there are separations between work space and social space perpetuates the inequality. What happens is that social space informs and influences who gets privileged in terms of their professional space as well.

Another structural issue that promotes gender and racial inequality is this concept of pay-for-performance. Wall Street's understanding of their own meritocracy is, “We don't pay people a regular salary. We 'pay for performance,' so that's why we're a meritocracy.” What is really striking is that many studies have found that Wall Street's compensation system actually increases and reproduces inequality more so than salaried work.

To understand this, one has to dig deeper and ask how bonuses get decided – what constitutes performance? Often bonuses get decided by a group of managing directors and department heads within the financial institution. Not only are these managing directors mostly all men, these meetings are also secretive and not transparent. When you're in a larger institution with more checks and balances and much more open compensation standards, there are certain standards or checklists you have to complete to get the raise. Bureaucracy has some good effects. If you're being judged by a network of powerful men in secret, where there are few concrete standards of whom to credit for deals executed by a team, where their interpretation or perception of an employee’s performance are often framed through normative preferences, then it comes to no surprise that what constitutes good “performance” is not only malleable but reproductive of dominant gender and racial norms. In a book called “Selling Women Short: Gender and Money on Wall Street”, Louise Marie Roth found that women's performances were subject to very different standards than that of white males. They were judged by a double standard. The work that they accomplished was not as highly valued or perceived to be as competent, and they were not given the benefit of the doubt as a general practice.

One of the women I interviewed said that somehow if normative white men make lots of mistakes, it doesn't necessarily count against them one year later, but if a woman or person of color makes a mistake, they're immediately affected by it. Specifically, not only are those mistakes remembered, but are interpreted as confirmation of what they had already suspected – fundamental evidence of your lack of competence. Whereas with a man, since it's assumed that he is already and “innately” a competent worker, the mistake doesn't then imbue into the fundamental character of that employee.

In addition, many Wall Street employees perform well because they were put on the best deals in the first place, i.e. work for clients on a more high-profile or lucrative transaction. These are, of course, many contexts to factor in here, but part of what frames how certain workers get chosen for the more privileged deal are these extra-social identifiers, whether it be playing golf, being part of the same alma mater, or having a particular socializing connection with the directors, like talking sports or joking around. These kinds of everyday subtle and not so subtle, professional and extra-professional experiences help to decide who gets put on that high profile deal team in the first place and, not surprisingly, that's affected by race and gender. So if these factors are related to what deals you get, your performance is at baseline already framed by things other than your performance – your social identities and how they are perceived by those in power.

Womenetics: Is there any real incentive for Wall Street to be more inclusive?
Ho: First, I want to step back a bit. In the Reuters article, there are two paragraphs that are really interesting. One about how women “opt” to take time off during their prime years to raise children and the other about the “glass cliff,” which says that women are pushed up the ranks, promoted too fast, so failure is inevitable. 

I think it's really important to talk about the larger social world in which women's professional lives are embedded. Many scholars have written about how the U.S., for an advanced, industrialized country, has one of the least supportive childcare infrastructures in the world -- meager parental leave, largely unaffordable childcare, and workplaces organized without regard to dependents.Now, on top of this, women are still culturally presumed and socialized to be the primary caregivers of children. 

So, in this context, given that childcare is both publically and privately deemed women’s responsibility, the choice for a professional woman to either take an off-ramp or choose not to is actually a false choice. How can it be framed as a real choice if one already has primary responsibility and there's no institutionally supported childcare? 

Professionalization doesn't occur in a vacuum. One has to deal with these other factors that then affect women's “work lives.” People seem to debate that women today have the choice to be stay-at-home moms or to be "working" moms. But before you have that debate, those have to be equally valid options.

As for the “glass cliff,” I think that the dearth of substantive institutional support, mentoring, and supportive networks that reach all the way up the ranks for these women, not to mention the double standards and dual responsibilities we’ve just discussed, actively construct these ambiguous or even “failed” outcomes. These results, however, are certainly not inevitable.

Womenetics: Also, most households at this point are dependent on two incomes, so to be a stay-at-home mom, for most people, really isn't an option.
Ho: Exactly. The kind of impossible cultural standards that are put on women who are mothers and working outside the home create situations where women are expected to shoulder these larger social, personal and professional challenges as individuals. It's framed as, “Do you have good work-life balance?” So, again, it's individualized and not thought of as a larger social problem. If women can't balance their own lives, it's their own fault. 

Womenetics: Is “work-life balance” a term that anyone dares to mention on Wall Street? You touched on how work and “life” are very much intertwined, but did any of the women talk about dealing with family commitments?
Ho: The presumption on Wall Street is that – for lack of a better word – everyone has a wife. Someone else should do all of the work that makes their lives happen, so they can focus on working overtime at a financial institution while someone deals with the day-to-day, the kids, etc. If one, in their social position, is the worker and also the caretaker and mother, this becomes hard to achieve. 

The premise is that this model is standard and normative – the hours expected of the normative worker are based on the idea that this person has other people in charge of their personal life. If you're the person that society deems to be in charge of your personal life and other people's personal lives – children, etc. – you're caught in a situation where you're working a double shift.

The work-life balance has a similar discursive problem like the “money meritocracy” or myth of pay-for-performance. Many women who do work on Wall Street are highly resourced and are able to afford more stable and high-quality childcare as well as people who take care of domestic duties. 

But even in those contexts, they are still considered the primary caregiver for all of the idiosyncrasies and emergencies, of where there are many. This, combined with the socializing, clubby world that is in many ways still premised on exclusionary practices, comprises your professional life. 

Womenetics: Often in professional settings, especially, if a woman is very assertive, she's labeled a bitch and if she's particularly accommodating, it's seen as being too eager – a weakness. Would you say that women on Wall Street are forced to walk this line more so than in your average workplace?
Ho: I haven't directly researched the average workplace, so I'm not sure if these practices are even more highlighted on Wall Street, but certainly women on Wall Street have to continually navigate how their gendered practices are being perceived. Again, these discriminatory practices arise in part from the fact that a particular, exclusive identity or set of practices is presumed to be the normative and universal standard against which everyone is measured. For example, the ideal Wall Street worker is still presumed to be a heterosexual, upper-middle class, white man. So, if he says a curse word, yells and then jokes about it later, no one's going to think anything of it. No one five months later is going to say at the bonus meeting, “Wow. This person is really weird…maybe a little bit unstable. What's going on?” And that is because he already is the model of the ideal Wall Street employee. Part of the reason these issues of competence and performance are constantly questioned when it comes to women and people of color is because their cultural practices are not already the norm – they are not presumed to be the ideal worker. 

To give another example, if a male investment banker works all the time, it's considered part of his cultural identity. But if a female banker works too much there's sometimes back talk of “Doesn't she have a life?” or “Let's give her more grunt work because she keeps doing it.” 

Womenetics: Assuming more women continue to join Wall Street firms, do you think it will inevitably cause a shift in the culture?
Ho: I'm not sure. I think that many of Wall Street's practices are very engrained, as are the gendered norms in American workplaces. As a foil, there are some professional jobs – they might not be as valued or occupy powerful positions in American society – that are female-dominated, whether it's secretarial or administrative work or fielding calls in service centers or nursing. There are lots of women in these jobs, but these jobs are structured to take advantage of women's stereotyped traits. Secretaries are not generally thought to be skilled workers because they are smart, know how to network, and know the ins and outs of the entire office. They're thought to be good secretaries because women are assumed to be innately good at service work. They're not being rewarded or understood to be skillful jobs or skillful workers. Women who work in female-dominated occupations are assumed to be good at the work because of their stereotyped traits. 

By contrast, men who work in male-dominated fields that take advantage of these normative, masculine traits are then considered to be skilled. These traits are then considered essential to performance. They say, “Oh, of course you have to shout and be aggressive. That means you're performing well.” 

So, despite the fact that both women and men deal with gendered stereotyping, their effects are vastly different depending on one’s position within a field of power relations. So, I think that any time we want to be hopeful – I'm not saying we shouldn't be hopeful – and we want to say “Add more women in and stir,” it's not always that useful. Critical mass and diversity are important, but if we don't actually change the larger social milieu and the contours of institutional support, then substantive change becomes more difficult.

Womenetics: Are the people being discriminated against so satisfied in being part of this privileged, esteemed institution that they don't really care that it's happening to them? Is it something they're willing to contend with to be a part of Wall Street?

Ho: Many women and people of color actually do critique and challenge Wall Street's meritocracy or pay-for-performance as myths. Many of these bankers are highly cognizant of how the deck is stacked against them, about how racial and gender inequality are perpetuated and how their contributions and competence are doubted and held at different standards. These are things that these bankers will acknowledge and recognize in conversation. At the same time, one of the ways in which – and this is part of a larger social issue – they resist these problems is to double down and work even harder. Also, many are themselves caught up with the discourse of individualistic meritocracy, and thus, if they leave or are forced to leave the institution, they often blame themselves. Of course, as we’ve discussed, my argument is that what constitutes “merit” is not natural: The qualities and attributes that are deemed meritorious often get defined by the privileged to benefit the already advantaged.

Womenetics: It just seems like such a hostile environment. There are so many obstacles that it seems impossible to thrive at work or even have a life outside of work when everything is set up to sort of work against you.
Ho: Keep in mind that many times there's explicit hostility and many times there's not. Many of these practices are not visible to those who swim with the current. Those who fit the ideal are not aware that these practices are exclusionary. Because you're driving with the traffic, to you, there is no traffic. But those who do encounter traffic often question themselves. “Is it me? Because it seems that most people around me don't deal with this traffic.” Also, the larger societal discourse puts all of the responsibility not on the institution or larger structural constraints, but on the individual. The issue here is that people usually don't interrogate the institutions or macro constraints. They internalize them and frame them as their own individual choice or inability, so structure gets framed as individual responsibility. The hopeful news is that by working to unveil some of these workings of power that perpetuate hierarchy while locating accountability and blame on the less powerful, one can perhaps move beyond self-blame and artificial choice to better frame the sites and sources of struggle through which one can agitate for more justice and equality.  

More women taking Wall Street by storm:

Jackie Zehner made her presence known on Wall Street. This role model became the youngest woman in partnership with Goldman Sachs, making a way for aspiring women looking to put more than just a crack in Wall Street’s glass ceiling.

Teresa Dentino, CEO of Financial 411, became one of the first female stockbrokers in the U.S. See what she has to say about what’s really happening behind closed doors on Wall Street.

Carol Roth worked for Wall Street all the way from San Francisco and came to be one of the youngest officers working for her firm. She discusses her decision to leave her high-paying job as an investment banker for the media business.

Stephanie Proft is the editorial assistant at Womenetics and a recent graduate of Georgia State University, majoring in print journalism and minoring in anthropology. She was born in Lichtenfels, Germany to a native mother and an American soldier. She has since lived happily in a variety of settings, including the Northwest and the Southeast. She is generally fascinated by culture, and the way it shapes our experiences.