Tuesday, September 10, 2013

Class Is Seen Dividing Harvard Business School

"...[S]he was told by her classmates that she needed to spend more money to fully participate, and that “the difference between a good experience and a great experience is only $20,000.”

America has become far less egalitarian as the wealth of the better-off has skyrocketed in the past few decades. At Harvard, the ultra-wealthy are segregating themselves. In other parts of the country, the merely well-off are segregating themselves.

Top 1% take biggest income slice on record
Matt Krantz
September 10, 2013

The gulf between the richest 1% of the USA and the rest of the country got to its widest level in history last year.

The top 1% of earners in the U.S. pulled in 19.3% of total household income in 2012, which is their biggest slice of total income in more than 100 years, according to a an analysis by economists at the University of California, Berkeley and the Paris School of Economics at Oxford University.

The richest Americans haven't claimed this large of a slice of total wealth since 1927, when the group claimed 18.7%. The analysis is based on data from Internal Revenue Service data...

Class Is Seen Dividing Harvard Business School
The New York Times
September 9, 2013

As soon as new students arrive, they are expected to write checks of $300 or $400 to their “sections,” the groups with whom they take first-year classes, if they want to participate in social events. In recent years, second-year students have organized a midwinter ski trip that costs over $1,000, while others, including members of “Section X,” a secret society of ultrawealthy students, spend far more on weekend party trips to places like Iceland and Moscow. Tickets to the winter ball, called Holidazzle, have cost $200 or more in recent years.

When Christina Wallace, now the director of the Startup Institute, attended Harvard Business School on a scholarship, she was told by her classmates that she needed to spend more money to fully participate, and that “the difference between a good experience and a great experience is only $20,000.”

“Class was the bigger divide than gender
when I was at H.B.S.,” said Ms. Wallace, who graduated in 2010.

In reaction to an article published in The New York Times on Sunday about Harvard Business School’s attempt to improve its atmosphere for women, many students, alumni and readers echoed her comments.

“A pervasive problem,” a member of the class of 2013 wrote on nytimes.com. Another member of the class said that she had borrowed tens of thousands of dollars a year to keep up socially, and that she never invited classmates to her parents’ home nearby because she did not feel it was lavish enough.

Many alumni from decades ago, including Suzy Welch, a former editor of The Harvard Business Review, said they were startled by the culture of spending that was depicted in the article, including the news that one student had lived in a penthouse apartment at the Mandarin Oriental Hotel in Boston. When Ms. Welch graduated in 1988, money mattered, she said in post on Twitter, “but conspicuous consumption events were rare.”

A reader named Ken H said that the tone at the school in the 1970s was downright egalitarian, and that anyone who “flashed money around” would have earned jeers. “Maybe what has changed isn’t so much H.B.S., but America,” he said.

The Harvard Business School student body is at least somewhat economically diverse, with 65 percent of students on financial aid, receiving an average grant of $60,000 over the two-year program, according to a spokesman. (Tuition costs more than $50,000 per year.)

The class of 2013 included former members of the military, children of struggling single mothers and a former butcher, among many others. But just as the school has made efforts in recent years to draw students from a wide array of economic backgrounds, the global elite has been accumulating far more wealth and the American income divide has been growing.

The result is a school that mixes students of relatively modest means with extremely wealthy ones, including in recent years the children of Leon Black, a private equity investor, and Gerald D. Hines, the founder of one of the world’s largest real estate firms, among many others. In interviews, some students mentioned the Instagram feed of Michael Hess, a member of the class of 2013, who has posted photographs of Mick Jagger close-up in concert, courtside seats at a Knicks game and stops on his trips around the world.

Many Harvard business students and readers were especially troubled by Section X, and the idea that even within the extremely elite confines of one of the nation’s premier business schools, the ultrawealthy are segregating themselves.

“There is this underbelly at H.B.S. of extremely wealthy individuals — spoiler alert, I am not one of them,” said Brooke Boyarsky, who delivered a triumphant speech at graduation about social change at the school...


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Nichole Mercado said...

Sadly, this is the truth amongst elite School of Entrepreneurship. This article somewhat talks about the hard truth. But I believe it is not only the wealthy students who segregate themselves from the rest of those whose family earns less that theirs. Have you heard of Afluenza? It's a ridiculous disease where a person raised in pampering and richness grows up to be psychologically impaired to make an objective decision. So rather than just the wealthy students, it is the school faculty, their family and the allegedly poor students themselves who creates hierarchy within the walls of the campus. I’m not saying this as a fact, it is just an observation I came to notice.