Alcohol Abuse Within the Financial Industry
Addiction in the financial industry is almost an open secret. Bankers, traders, brokers, and analysts of Wall Street are renowned and infamous for their “work hard, play hard” ethos that is often dramatized and sensationalized. But there is a real human cost behind the late-night binges and scandalous parties. The dizzying heights and excesses of life in the financial industry masks a life-threatening problem that is alternately encouraged and ignored.
Do Bankers Need Booze?
“Do you need booze to get ahead in banking?” asks eFinancialCareers. A 2012 study that surveyed investment bankers for 13 years found widespread alcoholism in the banking sector. A running joke in the industry is that alcohol keeps the machine “well-oiled,” serving as a social lubricant and a professional bonding catalyst. Employees are encouraged to drink to celebrate success, drown their sorrows, or simply power through endless late nights and working weekends. Business Insider writes that Wall Street employees are “experts” when it comes to holding their liquor. Client meetings are often bookended with drinks all around, and the more and harder the drinking, the better the chances of sealing a very lucrative partnership.
Even finance professionals who have “gone dry” admit that drinking is a part of what they do; alcohol is still very much part of a high-powered professional world, and as much pleasure as there is to be derived from drinking itself, alcohol is as much as a commodity as stocks and bonds. This means that not partaking in drunken binges can be a “costly experience,” in the words of The New York Times. Alcohol is at the center of many American business practices, and people who work in high-end and high-stakes financial professionals are expected to drink; those who opt out are viewed with suspicion. The director of a special treatment program for legal professionals explains that teetotalers are thought of as being more untrustworthy than their drinking colleagues, even to the point of being unprofessional.
In the world of high-powered finance, a drinking binge is not just a term used to describe a wild night (or even an ordinary night). Medically speaking, binge drinking is the act of a man consuming at least five drinks within two hours, and a woman consuming at least four drinks within two hours. CNBC spoke with Dr. Harold Selman, a psychiatrist who treats wealthy finance and law executives in New York, and Selman said that people in their respective industries tend to either downplay their drinking habits (to avoid implying that they have an alcohol abuse problem) or exaggerate them (to impress bosses and clients, and intimidate peers and juniors).
But for how difficult it is to get accurate rates of alcoholism in the financial industry, Selman believes that there is nonetheless an increase in substance abuse. More people are turning to chemical substances (both legal and illegal) to cope with the pressures of an unstable economy, when literally millions of dollars can be made and lost in a single day. Promotions and bonuses are dangled in front of Selman’s patients, but when earnings come in below expectations, his patients throw themselves deeper into their work (and their drinking) to numb the disappointment, and to persist in an endless rat race.
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The New Watercooler
The culture of highly powered drinking in a high-stakes world is not limited to Wall Street. In 2017, The Guardian profiled the “rife” problem of substance abuse in London’s financial district, where the prevailing cultural norm is to turn a blind eye to what happens behind closed doors. While stimulants like cocaine and Adderall are the go-tos for many, alcohol remains the socially acceptable drug, with some offices keeping minibars so that employees are always ready to go. In this world, “the keg is the new watercooler,” says the Wall Street Journal.
For some, substance abuse is part and parcel of the overall business. The financial industry is ruthlessly competitive, with flexible ethical practices that are easily put aside in the quest for the most bankable bottom line. A number of companies proudly espouse “zero tolerance” toward dangerous alcohol consumption, but stories and reports suggest that the “zero tolerance” only applies when something goes wrong.
A Culture of Risk
Some of those stories come from books (and subsequent movies) like The Wolf of Wall Street, a 2013 production about the rise and fall of Jordan Belfort, a former stockbroker who pleaded guilty to fraud, stock-market manipulation, and scamming investors. The movie was controversial for its unapologetic (and some say uncritical) depiction of substance-fueled parties, a veracity which was literally cheered on by professional bankers at an advance screening, where Paramount Studios offered complimentary martinis.
Notwithstanding the sensational acts depicted on screen, many people in the financial industry privately acknowledge the seriousness of the problem. Officials in the City of London banking sector admit to “a particular risk-taking culture that may contribute to the development of addiction.” So intertwined are the drives for success and excess, that Financial Times said that unethical business practices in the finance industry are akin to “alcoholics in a liquor store.”
Surveys and reviews suggest that finance workers are reluctant to admit they struggle with issues of control, whether it be with the long hours they spend at the office or the alcohol they drink. For this reason, accurate data about the scope of alcohol abuse in the finance industry is hard to come by. Admitting to a drinking problem leaves the door wide open to be laid off and replaced, and few are willing to take that kind of risk. An addiction specialist notes that upper management and leadership are happy to turn a blind eye to the issue of alcoholism, “as long as you are pulling the money in.”
Models and Bottles
The drive to be the hardest worker and make the most money is also what compels many in the finance industry to take the sharp edges off the job by hitting the bottle as often as they can. This regularly comes at the cost of their own mental health, sometimes tragically. In April 2015, a 29-year-old investment banker jumped to his death following a combination of stressful working conditions and a self-medication regimen of drugs and alcohol. Depression and eating disorders are common among Wall Street bankers, according to a 2012 study published by Administrative Science Quarterly.
Kevin Roose, author of a book that followed eight Wall Street bankers in the aftermath of the Great Recession, wrote that some of them (the youngest just 22 years old) would work almost 100 hours a week, spending more time with coworkers and alcohol than with their friends and family. Roose wrote that the upper echelons of the financial industry are “really unhealthy,” a fact that is not disputed by those who have to work there; but there is always more work to do, more money to make, and more alcohol to drink to get things done.
Those who choose not to drink quickly discover that they don’t fit in with Wall Street’s “models and bottles” lifestyle (spending exorbitant amounts of money on alcohol and getting acquainted with models and/or celebrities at expensive clubs and restaurants). The Economist writes that there is a steakhouse on every corner in the general Wall Street area, with one establishment having “somewhere between 20,000 and 25,000 bottles.” Lunchtime, says the Economist, is not for wimps.
This has the knock-on effect of a person being left out of critical negotiations and deals if they don’t drink, ultimately short-circuiting what was a promising career. A sober Wall Street trader admitted that his choice to not drink hindered his chances for moving up the corporate ladder; he was left behind while his coworkers lavished customers with $400 bottles of vodka.
Changing the Culture
Movies like The Wolf of Wall Street, and reporting and research on the topic, threw an unwelcome spotlight on the culture of alcohol abuse in the financial industry, so much so that many Wall Street companies have made it a point to actively address unhealthy practices in their offices. For example, a number of firms have instituted mandatory vacation days, and younger employees – most likely to push themselves in harmful ways – are incentivized (or outright told) to take the weekend off and not come into work. Other businesses are taking a stand against alcohol freely flowing in their offices. The combination of stress and drink creates a cocktail of liabilities, covering everything from drunken sexual indiscretions to employees trying to drive home after an 18-hour workday.
More and more companies are offering Employee Assistance Programs (EAPs), which offer support to employees and their families who are struggling with work-related mental health and substance abuse problems. EAPs give employees temporary, anonymous counseling, and help them connect with fulltime mental health practitioners who are trained in organizational psychology. EAP counselors are onsite consultants, working with management to recognize the signs of a struggling employee, and also how to create an office environment that respects the wellbeing of its employees while still remaining competitive. Stress and alcohol will likely always be part of the financial world, but innovations like Employee Assistance Programs extend a lifeline to employees when they feel like they are at the edge of what they can handle. Instead of another drink, a private phone call with an EAP consultant could be the difference between burning and crashing out, and getting a promising career back on track.
The increased attention being given to the topic of alcohol abuse in the finance industry has led to calls for firms intentionally creating safe spaces for management to be honest about the reality of substance abuse in the workplace. Advocates note that this is exceptionally important for newer, younger employees who might feel compelled to show off and make a “favorable” impression by hitting the bottle harder than anyone else and staying quiet when things get out of control. If there really is to be a change in the finance industry’s attitude toward alcohol abuse, the most vulnerable members of the workforce have to accept that asking for help is the right thing to do; their more experienced and seasoned colleagues have to encourage this behavior.
Some financial professionals who do not drink, or who are honest about their alcoholism and recovery, find themselves in a position where they can guide coworkers who are feeling the stress of a nonstop cycle of working and drinking. One executive said he endured a few months of ridicule for being sober at his old job, only to become a confidant for coworkers who would privately ask him how to curtail their risky behavior. “I became the go-to guy if you needed to have a private talk,” he told The New York Times.
Celebration and Commiseration
After two Goldman Sachs employees killed themselves in 2015 (one after a night of cocaine and alcohol consumption), the company told its 2,900 undergraduate summer interns that they were not allowed to stay in the office past midnight. Fulltime junior bankers are forbidden to be in the office between 9 p.m. Friday and 9 a.m. Sunday. Special permission is required for exceptions and only for deals that need to be completed before the Monday morning market opening. JPMorgan Chase lets its analysts have one “protected weekend” every month, while analysts at Barclays cannot work more than 12 days in a row. Bank of America’s employees are required to take four weekend days off each month.
But according to the father of one of the Goldman Sachs employees who committed suicide, the culture of rampant ambition and risk-taking still exists. It is inherent in that profession, especially among younger employees who feel implicit pressure from senior executives to work at all hours to make impending deadlines, and then drink to both celebrate and commiserate.