Unequal: America pulling apart

During the 1920s, America grew increasingly unequal. By 1928, the richest 1 percent of families reaped one-fourth of all U.S. income. But the stock market crash and the Great Depression brought drastic change. America's wealth gap gradually narrowed during ensuing decades. By the late 1970s, the top 1 percent got only about 9 percent of American earnings.

However, since the Reagan-Bush era of the 1980s, relentless polarization has returned. Today, once again, the richest 1 percent get a quarter of U.S. income. Nobel Prize-winning economist Paul Krugman says a "Great Divergence" is pulling U.S. society apart.

"Inequality in America" was the title of a July essay by Robert Reich, who was President Clinton's labor secretary in the 1990s. He wrote:

"Each of America's two biggest economic crashes occurred in the years immediately following these twin peaks [of income inequality] -- in 1929 and 2008. This is no mere coincidence. When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don't have enough purchasing power to buy what the economy is capable of producing."

Various factors cause the spreading gulf. Blue-collar work has been decimated by ever-advancing technology -- while the snowballing "Information Age" rewards educated specialists in brainpower careers. Fewer manufacturing workers are needed. Labor unions have shrunk to a mere 7.5 percent of America's private-sector work force. Lower-paying female jobs are fairly secure, while men have been laid off  by millions.

Reich explained:

"The structural problem began in the late 1970s, by which time a wave of new technologies (air cargo, container ships and terminals, satellite communications and, later, the Internet) had radically reduced the costs of outsourcing jobs abroad. Other new technologies (automated machinery, computers and ever-more-sophisticated software applications) took over many other jobs (remember bank tellers? telephone operators? service station attendants?) By the '80s, any job requiring that the same steps be performed repeatedly was disappearing -- going 'over there' or into software."

While ordinary jobs dwindle, more pay goes to well-educated executives and professionals in thinking careers. The result is an ever-worse divide between haves and have-nots -- a harmful condition.

A new book, The Spirit Level, contends that happy societies are those with the greatest equality -- while severe inequality causes a welter of social evils. Reviewing the book, the London Timeswrote: "This is why America, by most measures the richest country on Earth, has per-capita shorter lifespan, more cases of mental illness, more obesity, and more of its citizens in prison than any other developed nation."

The best cure for inequality is burgeoning new industries that open multitudes of new jobs, creating widespread opportunity. President Obama hopes this goal will be achieved through "green energy" -- solar, wind, biomass, tidal and such fields. We hope he's right, and we hope the development comes quickly.

SCHOOL FOR CHANGE - A new breed of managers is required to sustain India’s growth

Management education is now 45 years old if we count the business administration departments established in 1955 in Delhi and two other universities. The number of management schools recognized by the Central government is now said to have reached 2,500. India and the United States of America have the largest number of students going to business schools. The vast majority of these schools in India is well below standard, with few staff members and that of low quality, poor facilities as in libraries and computers. The image of most is that they are there only to make money for the promoters. Business school students do not come for an education but for the choicest jobs. Business school education is seen as inculcating greed as the highest virtue. The large number of MBAs in financial firms in the US at the time the world economy was thrown by their mismanagement into recession is validation of this.

With India on a sustainable high growth path, management is a key to sustainability. Management education must reform if we are to grow. The Association of Indian Management Schools established in 1988, with 500 member institutions today, held its 16th convention recently. Many members have learnt from each other and there appears to be a distinct improvement. It is among those who are not members that there is much to be concerned about. Many are mere moneymaking institutions. A business degree is felt to be a guarantee of well-paid jobs. Parents are willing to pay extortionate fees. The schools squeeze the last drop through capitation fees, unreasonable extra fees and high tuition fees.

The report of the National Knowledge Commission when implemented, and the impending supersession of the regulatory body, the All India Council for Technical Education, could help matters. But the task is very difficult. Many hundreds of recognized business schools across all sectors — private and public, in Central and in state universities — have to improve. There are many other unrecognized schools as well that offer management education. There is little information in the public domain about recognized and unrecognized ones. The ratings by different news and business magazines cover only a fraction of recognized schools. The supervision by the AICTE has been superficial, ineffective and biased. No regulatory body will be able to impose minimum standards. Market forces, namely students and parents, prospective employers and the media, must decide on the schools’ quality.

Efficient markets need all stakeholders to have easy access to full information about each school, a single national objective rating each year for all schools, all schools to be rated and graded by an independent agency, a single admission test from which students are selected for different schools, and transparent governance of each school. None of these conditions exists today. Newspaper reports suggest that the government is considering asking all educational institutions, including business schools, to follow transparent norms of governance on the lines that the Securities and Exchange Board of India has laid down for listed companies. I have made this suggestion for many years and it is good that it might be followed.

The other change under consideration by the government is a single admission test for students to business schools. This will reduce the burden on applicants having to appear for many tests. A number of vested interests will lobby against these. It is also essential that full information on each business school is available each year in time for students considering business education. Compulsory disclosure with severe penalties for false statements about numbers of faculty, qualifications, facilities and so on is necessary. The government should have the spine to force these policies.

Management education is an artificial construct grafted on to many other streams from which the faculty and students come. Ideally, the undergraduate years must prepare students for the postgraduate education. Engineering or social sciences, the main sources today, do not cover all the disciplines from which management studies have evolved. These include economics, psychology, political science, anthropology, sociology, time and motion studies, statistical sampling and other techniques, and using information technology for better decisionmaking and innovation, among others. Some work experience in between the undergraduate and graduate studies will prepare the student better for business management. We must also ensure that management education is not confined to business applications only, since it is as important for government and non-governmental and non-profit institutions. Faculty must also be integrated for management education, with annual updating programmes.

Today’s changing world requires that management education prepare students to tackle challenges, including the accelerating economic growth in India, the exploding domestic markets and opportunities overseas, the consequent increase of interest in India of foreign companies and of Indian companies overseas. We can expect that there will be a significant improvement in industrial growth and in organized agriculture and services. Markets are becoming so big and competitive that the rewards of success are substantial and the costs of failure also very great.

Organizations are becoming big and complex and making them work effectively in any sector is the management challenge. Information technology applications are giving management greater opportunities and capability to improve efficiency, reduce costs and promote innovation. Managers are becoming mobile across borders, as are all manner of institutions and businesses. This makes it imperative that managers have good cross-cultural understanding and respect. From teaching skills, techniques and contexts, management education must help development of strong interpersonal skills, team building and social and emotional skills.

Management education can no longer be left to self-serving regulators and entrepreneurs focused on money-making. Its overall governance and regulation must be subject to strict rules and penalties for violations. The government may replace the AICTE with less intrusive regulators, but regulations, inspections and penalties are unavoidable.

We must have registration of all schools and adherence to conditions that will be investigated from time to time. Violation of conditions must lead to closure. These conditions must include adequate classrooms, sufficient access to computers and the internet, numbers of faculty and their quality in terms of education and publications, and ratings of teachers by their students. Full autonomy to institutions in deciding subjects, curricula, pedagogy, study materials and so on is essential. There must also be integration of heterogeneous faculty into the subject of management. Frequent tests to evaluate the students’ absorption of learning, rather than a periodical examination, and much more exposure to real-life management under faculty supervision are necessary. The key is integration: of teachers from different disciplines, of pedagogy for integrated, and not just functional, learning and of human with functional skills.

Summer and final placements must go beyond organized industry and include small-scale, nongovernmental and non-profit organizations, and the government itself. Management faculty who take students on field trips (the late professor, S.K. Bhattacharya, took them on consulting assignments, the professor, Anil Gupta, takes students to discover small innovations), provide unusual and useful learning. Similarly, exposure to other cultures within and outside India might be gained through visits to tribal areas, watching movies from other countries, food festivals, and so on.

Management education has a vital role to play in India’s future development. It must produce managers who are not restricted to industry, who can learn to integrate all management functions and not become narrow specialists, who have an interest in building society rather than only making money for themselves, are humane and not authoritarian in style, are curious to learn and apply new skills and techniques, accept different cultures and work with them, and who want to improve the conditions of the very poor and deprived. How management education changes will determine the future of India’s economy.

Losing the accent is great for job applicants

If immigrants can assimilate,West Virginians can by

Losing the accent is great for job applicants

 IT'S called "accent reduction" and it's becoming a big deal in America, especially among immigrants who are trying to get jobs.

Go online and you can find software to help people for whom English is a second language.

You can find entire Web sites devoted to helping immigrants speak English with less of an accent. There are even courses in community colleges and universities to help newcomers speak proper English so they can get jobs.

Why? It's simple. Most U.S. employers want their employees to speak English that most folks can understand, especially if those employees deal with the public

And that makes sense.

When I call a customer assistance number and someone answers who doesn't speak a form of Midwestern American English, I get frustrated and sometimes just hang up.

I attended entirely too many rock concerts (a la Kiss) in my youth and my hearing is going. Unless my ears are attuned to the kind of English being spoken, I sometimes simply don't understand.

The question at hand: Should some folks born and bred in America seek accent reduction as well? I think so, especially those who live deep in Appalachia.

I am sometimes amazed by the heavy accents I hear on local news. Folks in Eastern Kentucky and Southern West Virginia probably watch as much or more TV than others in this region.

And yet, it seems they are unaffected by the "standard English" they hear over the medium.

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Billionaire Lemann Rises to Burger King Boss From `Joe Schmo'

Jorge Paulo Lemann lost his first job, as a financial columnist at Jornal do Brasil, after graduating from Harvard University in 1961. Then a brokerage he started almost failed during a Brazil stock rout.

“Right after that, his career just took off,” said Alberto Dines, 78, the former managing editor of the Rio de Janeiro-based newspaper. “If he had continued being a journalist, he was going to be a Joe Schmo.”

In three decades of deal-making, Lemann, 71, engineered the $52 billion takeover of Anheuser-Busch Cos., founded a firm that became Brazil’s largest investment bank and amassed $11.5 billion to become the nation’s second-richest man after EBX Group Ltd. owner Eike Batista, according to Forbes magazine. His latest transaction is a $3.3 billion takeover ofBurger King Holdings Inc., the biggest restaurant acquisition in at least a decade.

The man behind the buyout of the No. 2 U.S. hamburger chain, with his partners at New York-based 3G Capital, is a former tennis champion who started his own investment bank at 32. Lemann declined to comment through his outside public relations firm in Sao Paulo.

“It takes the same effort to think small than to think big,” Brazilian magazine Epoca quoted Lemann as saying in an April 8, 2008 article. “But to think big frees you from the insignificant details.”

‘Spartan Style’

Former colleagues describe Lemann as a frugal executive who shuns publicity and prizes simplicity. “He always had a very Spartan style,” said Arminio Fraga, the former Brazilian central bank president who took his first job in finance at Lemann’s brokerage and securities firm, Banco de Investimentos Garantia SA, when he was 28. Lemann has a “very simple, objective view of things and of life in general,” he said.

Lemann and his partners at 3G, Brazilian billionaires Marcel Herrmann Telles and Carlos Alberto da Veiga Sicupira, agreed on Sept. 2 to acquire Miami-based Burger King for $24 a share, 46 percent more than the Aug. 31 close. The stock closed at $23.80 on the New York Stock Exchange on Sept. 17.

3G is taking over a fast-food chain battered by falling profits and sales growth that has slowed for two straight years in the recession. The firm’s tender offer for Burger King shares began on Sept. 16 and expires on Oct. 14.

The transaction underscores Lemann’s strategy of investing in consumer companies. He and his partners own stakes in Anheuser-Busch InBev NV of Leuven, Belgium, the world’s biggest brewer, and Rio de Janeiro-based Lojas Americanas SA, Brazil’s largest discount retailer with 479 stores. It’s also a shareholder in Curitiba-based America Latina Logistica SA, Brazil’s No. 1 railroad operator.

‘Extremely Disciplined’

Lemann has “very simple habits and is extremely disciplined,” traits likely learned on the tennis court, said Claudio Haddad, president of Ibmec business school in Sao Paulo and a former chief executive officer for Garantia.

“He was Brazilian champion five times, Rio de Janeiro champion about 20 times and veterans’ world champion three times,” said Haddad. “He doesn’t drink, goes to bed early, wakes up early, exercises every day.” Haddad, 64, said he has a “small investment” in a 3G fund, declining to disclose the amount.

No ‘Star’

“By the way I used to play, I realized it would be hard for me to be among the 10 best in the world,” Lemann said in the Epoca article. “So I decided to stop. I realized I would not be a star.”

Lemann can best be described as “Calvinist,” Haddad said in a telephone interview from Sao Paulo. His employees learned exactly what that meant after brewer InBev NV, which was controlled in part by Lemann and his partners, took over St. Louis-based Anheuser-Busch in 2008.

About 1,400 quickly lost their jobs and perks ranging from business-class flights and BlackBerrys to free cases of beer were eliminated, according to a person familiar with the business who said he wasn’t authorized to speak publicly. Even Brazilian-born CEO Carlos Britowas asked to fly economy class.

“They are not about showing off,” Fraga, 53, the founder of hedge fund firm Gavea Investimentos Ltda in Rio, said of Lemann and his partners. “They are fantastic managers and entrepreneurs.” Gavea owns a stake in Buenos-Aires based Arcos Dorados, the operator of someMcDonald’s Corp. franchises in Latin America, and has a stake in Lojas Americanas.

Swiss Father

Lemann, ranked by Forbes as Latin America’s third-richest man and the 48th wealthiest in the world, is the son of a Swiss businessman who grew up in Rio and went to Harvard in Cambridge, Massachusetts, to study business.

In 1961, he graduated with a degree in economics and later returned home to work in finance. Dines said he asked Lemann to write a stock market column at Jornal do Brasil even though he had never worked as a journalist. Soon after, Dines canceled the gig because Lemann was establishing a brokerage.

In 1971, Lemann, who also has a master’s in business administration from Harvard, founded Garantia in Rio and it soon became a place where talent vied to get jobs. Garantia landed assignments for multinationals including Philip Morris International Inc. and Colgate-Palmolive Co., both based in New York, helping them make acquisitions in Brazil to expand in Latin America’s largest economy.

Entrepreneurial Spirit

“He always led by example while trying to give us room to be entrepreneurial and grow,” said Fraga, the chairman of Sao Paulo-based BM&F Bovespa SA, the operator of Latin America’s biggest stock exchange. “It was clearly a meritocracy, capable of attracting and keeping people with great talent and energy.”

His early success was almost marred by failure. In 1971, Lemann and his partners paid $800,000 for a seat on the Rio de Janeiro stock exchange, according to a December 1996 report in Forbes magazine. Several weeks later, the market fell 60 percent and they almost lost all their capital, Forbes said.

Garantia bounced back and, in 1988, was acquired by Credit Suisse First Boston for almost $1 billion, including later payments tied to performance, according to Haddad. Lemann went on to found an investment firm with Sicupira and Telles called GP Investimentos. Among its first moves was to buy a stake in Lojas Americanas. By the time they sold their stake in GP Investimentos in 2004, the partners had boosted assets to 3.6 billion reais ($2.1 billion) and delivered an average annual return on investments of 23 percent in dollar terms.

Lemann has used some of his wealth to help improve education in Brazil, where the illiteracy rate was 9.7 percent last year, establishing two foundations working on different fronts.

‘Better World’

Fundacao Lemann, founded in 2001, provides courses to public school directors and municipal education secretaries to help them cope with the challenges of working in Brazil’s school systems. It has a budget of about 10 million reais.

“His view is clearly that what moves the world are the people,” says Ilona Becskeházy, 45, managing director at Fundacao Lemann, in a phone interview from Sao Paulo. “The country depends on the quality of these people -- and the intrinsic qualities they learned through education.”

Fundacao Lemann’s website opens with a phrase signed by its founder: “To help people achieve their potential and support them so they, on their turn, can help others in the future is a way to make a better world.”

Beach Trip

Another Lemann foundation, Fundacao Estudar, was started in 1991 and offers scholarships to Brazilians to study economics, business, public policy and law, said Managing Director Thais Junqueira Franco Xavier. “The idea is to form efficient and capable people,” she said.

Even as he uses his wealth to shape Brazilian society, Lemann is known for his proletarian values. Haddad recalled a popular story told about Lemann from the 1980s -- when Lemann was traveling in his Volkswagen for a weekend at the beach and stopped to refuel his car. As he was pumping gas, bandits rolled up to rob the place, completely overlooking the billionaire in their midst.

“As he was dressed with simplicity and had an old Passat, they thought he was a nobody,” said Haddad. “If they knew he was Garantia’s main shareholder, Lojas Americanas’s main shareholder, they would have probably tried to do something with him.”

Think getting tough with China will solve our jobs problem?

With unemployment in the stratosphere and the midterm elections weeks away, politicians naturally want to show voters they’re committed to getting jobs back.

So now they’re getting tough on China.

But it’s a dangerous ploy based on wishful thinking.

Treasury Secretary Tim Geithner told the Senate Banking Committee Thursday the Administration is “examining the important question of what mix of tools, those available to the United States and multilateral approaches, might help encourage the Chinese authorities to move more quickly.” Translated: We’re on the verge of threatening them with trade sanctions.

Even this didn’t satisfy the Senators. Charles Schumer (D-New York) charged that trade with China “diminishes America, our standard of living here in America, and America as a world power.” Richard Shelby (R-Ala) demanded to know why “the administration protecting China by refusing to designate it as a currency manipulator” – a designation that could lead to trade sanctions.

On Wednesday the U.S. filed a pair of complaints against China with the World Trade Organization, alleging China was unfairly denying American companies access to its market. Meanwhile, several Democrats facing elections in November are introducing measures that would allow companies to pursue sanctions against China for manipulating its currency.

It’s true China has kept the value of its currency artificially low relative to the dollar. If China allowed its currency to rise, Chinese exports would become more expensive to us and our exports would be relatively cheaper to them. This would help shrink the trade imbalance.

It’s also true China has dragged its feet. In June, the U.S. stopped short of branding China a currency manipulator after China promised to reform its ways. But since then China’s currency has risen just 1 percent relative to the dollar.

America’s trade imbalance with China is growing. In the first half of this year, China exported $119 billion more goods and services to us than we did to them – putting the two nations on course to exceed last year’s $227 billion trade gap.

But it’s naive to assume all we have to do to get Chinese to do what we want is to threaten them with tariffs.

First, they might retaliate. Remember, China is the biggest foreign investor in U.S. Treasury securities, with holdings of more than $843 billion. If China were to start selling off large amounts, America’s borrowing costs would soar – and we’d end up worse off.

Second, it’s already costly to China to keep its currency artificially low – requiring that China buy loads of dollars. So why would anyone suppose that making it more expensive for them would bring China around?

China has been willing to bear this huge cost because its export policy doubles as a social policy, designed to maintain order.

Each year, tens of millions of poor Chinese stream into China’s large cities from the countryside in pursuit of better-paying work. If they don’t find it, China risks riots and other upheaval. Massive disorder is one of the greatest risks facing China’s governing elite. That elite would much rather create jobs than allow its currency to rise substantially and thereby risk job shortages at home.

Third, even if China did allow its currency to rise against the dollar, there’s no reason to think this would automatically generate lots more American jobs.

American exports would become cheaper to Chinese consumers. But Japan, Germany, and other major exporters would also demand a piece of the action. Unemployment is high in all developed nations, and every government is under pressure to create more jobs.

Meanwhile, Chinese manufacturers – whose goods would suddenly become more expensive to American consumers – could simply shift their production to other nations with lower currencies. Indeed, as Chinese wages have begun to rise, Chinese manufacturers have already started to shift production to Vietnam, Indonesia, and other low-wage outposts of Southeast Asia.

What worries me most about all this tough talk about China is it diverts attention from the real problem. American isn’t suffering high unemployment because we’re buying too much from China and not selling them enough. Trade with China is a small portion of the U.S. economy.

Twenty million Americans lack jobs because American consumers – especially America’s vast middle class – can no longer spend what’s necessary to keep nearly everyone employed.

After three decades of stagnant middle-class wages, during which almost all the economic gains have gone to the top, we’ve finally reached a day of reckoning. The middle class can no longer borrow vast sums by using their homes as ATMs. They can’t squeeze more working hours out of two wage earners. And they have to start saving for retirement.

The central challenge we face isn’t to rebalance trade with China. It’s to rebalance the American economy so its benefits are more widely shared.

Perhaps America should take its cue from Cuba

In the classic children’s story, “Alice in Wonderland,” a little girl falls down a rabbit hole and finds herself in a strange world where everything is upside down, where all the rules have changed and peculiar people do inexplicable things.

I know how she feels.

According to a Sept. 14 BBC broadcast, Cuban President Raul Castro will lay off at least 500,000 state employees by mid-2011 and boost opportunities in the private sector to help those workers find new jobs. He suggested that as many as one million government workers will be laid off to ease the burden on the Cuban government. Currently, the state employs five million people, 95 percent of the Cuban workforce.

The move is seen as an attempt to stabilize the Cuban economy, which has suffered from economic boycotts and the loss of subsidies from the now-defunct Soviet Union.

Castro’s privatization plan includes allowing more Cubans to run their own businesses, form non-government cooperatives and shift more state land, businesses and infrastructure into private hands through long-term leases.

The Cuban Workers Confederation, the only labor union allowed by the government, supports the move, saying, “Our state cannot and should not continue supporting businesses, production entities and services with inflated payrolls.”

Here in the U.S., we seem to be going in the opposite direction. Government employment is increasing while private-sector employment is decreasing, and while the Cuban government is expanding private enterprise, our government is steadily encroaching on the private sector.

Take government jobs, for instance. The Obama administration says the federal payroll will grow to 2.15 million workers this year. The federal government has added almost 200,000 jobs during the recession while private employers have shed some 8 million net jobs.

And while the Cuban government is easing its grip on private businesses, the U.S. government is broadening its reach into the private sector. Bailouts, financial reform legislation and aggressive federal regulators are all increasing the government’s control of the private sector.

At a minimum, the situation is ironic. At most, it is unfathomable.

While Cuban officials warn of the danger of supporting bloated inefficient businesses, our government borrows billions to prop up companies deemed “too big to fail.”

While the Cuban government vows to promote private-sector opportunities, our new health-reform law and the proposed cap-and-trade legislation threaten to trap private employers in a complex and costly web of mandates, restrictions, fines and penalties, and regulations that will continue to drag our economy down.

Like Alice, we find ourselves in a mystifying world where down is up and up is down.

Cuba, one of the world’s most high-profile communist nations, appears to be recognizing that government control of the economy doesn’t work. Propped up for decades by billions in Soviet subsidies, Cuba is now on its own, and its economy is crumbling. Even the revolution’s old guard acknowledges that things must change, so they are beginning to embrace capitalism and economic freedom as a way to save their country.

Cuba is realizing that stifling federal control of the private sector doesn’t work, period. Castro found out the hard way that individual economic freedom to innovate and be creative is the key to growth, prosperity and just plain making family life better.

I know this sounds bizarre, but perhaps the U.S. should take its cue from Cuba.

Ranks of Women on Wall Street Thin

Women are fading from the U.S. finance industry.

In the past 10 years, 141,000 women, or 2.6% of female workers in finance, left the industry. The ranks of men grew by 389,000 in that period, or 9.6%, according to a review of data provided by the federal Bureau of Labor Statistics.

The shift runs counter to changes in the overall work force. The number of women in the U.S. labor market has grown by 4.1% in the past decade, outpacing a 0.5% increase in male workers.

The difference is pronounced at brokerage firms, investment banks and asset-management companies.

The figures suggest that women bore the brunt of the layoffs in the recent recession. But other forces are at play. Across the economy, computers have replaced junior, back-office workers, jobs that were largely filled by women.

The ranks of women thinned even during the stock and real-estate runup from 2001 to 2006. William Rodgers III, a Rutgers University professor and former chief economist at the Labor Department, said technology likely accounts for some of the shift.

Partly as a result, young women are becoming more rare in the country's banks, brokerage houses and insurance companies. Since 2000, the number of women between the ages of 20 and 35 working in finance has dropped by 315,000, or 16.5%, while the number of men in that age range grew by 93,000, or 7.3%.

The losses are steepest for the youngest women, including those just out of college. The number of women entering finance-industry jobs at age 20 to 24 fell 21.8% over the past decade. For jobs across all industries, the overall number of women in the work force was unchanged over the same period.

That suggests young women are either not as attracted to entry-level finance-industry jobs or aren't being hired for the posts that are available.

Given recent volatile markets and much scrutiny on compensation, there are fewer incentives to stay in the business for those women who have already chosen finance-industry careers, said Grace Tsiang, an economics professor at the University of Chicago.

Ms. Tsiang theorized that these women are having and raising children rather than staying on the job.

"Women have this higher alternative value of how to spend their time," Ms. Tsiang said. "They're always perched on this edge, and if the value of staying in a high-pressure job goes down just a bit, then that might make a big difference in the number that jump."

The picture is quite different for older women who joined the industry in the 1970s and early 1980s. The number of women in the business over 55 years old has grown by 366,000, or 56%, since 1999, outpacing a 234,000 increase, or 34%, in similar-aged men.

But that longevity doesn't necessarily equate to advancement. Senior executives such as Sallie Krawcheck, head of global wealth and investment management at Bank of America Corp., and Heidi Miller, head of international operations at J.P. Morgan Chase & Co., are still a statistical anomaly.

In U.S. financial companies, only 16.8% of executive officers and only 2.5% of chief executive officers are female, according to a 2010 study by Catalyst Inc., a nonprofit focused on workplace diversity.

Wall Street isn't keen to talk about these gender shifts. A number of firms, including J.P. Morgan Chase and Lazard Ltd., declined to answer questions for this article, and some of those that responded declined to detail the male-to-female ratios of their staffs.

One that did: At Bank of America, which has almost 6,000 retail banks, 61% of the workers are women.

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The number of women on Wall Street is falling, especially younger ones. Those entering finance jobs ages 20 to 24 fell 21.8% in the past decade.

Some women who left the finance industry give this reason for their thinning ranks: The career, saddled with stress and scandal, has lost much of its allure.

Janet Hanson, founder of 85 Broads, a networking group that tries to attract women to finance, said that women are finding "their entrepreneurial groove."

"It's not because Wall Street is not a fascinating place to be, it's just that there are other places that are more fascinating," she said.

Meghan Muntean joined Lehman Brothers Holdings straight out of Princeton University in 2006, when "the markets were hot, and everyone who was anyone was going off to Wall Street." She stayed on through the firm's bankruptcy and left to start ChickRx LLC, a website for female health advice and products.

Ms. Muntean said many of her female co-workers got smaller bonuses because they didn't golf or pal around with male managing directors.

"There were a couple that tried to be buddy-buddy with the guys, but it never really worked," she said. "It wasn't like the 1960s, getting slapped on the butt all the time. It was very subtle."

Monica Murphy also became an entrepreneur, leaving Goldman Sachs Group Inc. in early 2008 to start SoleMates LLC, which makes protective covers for high-heel shoes.

Ms. Murphy said her female co-workers were more open to a broader definition of success than her male contemporaries.

"I think it's because there's pressure on women to have more than just a career," Ms. Murphy said. "The whole work-life balance thing—for men, that's not always a big deal, but for women, it's always an issue."

Many women report that sexism is still rife on Wall Street, albeit less overt. Sexual-discrimination charges by women at finance companies dropped 28% from 2000 to 2009, according to data from the Equal Employment Opportunity Commission. But the number of charges per woman in the industry climbed during the recession in 2008 and 2009.

A lawsuit filed Wednesday by three former employees of Goldman Sachs charges the firm with employing a "pattern and practice" of discrimination. It also alleges that women fill only 29% of the firm's vice-president offices, 17% of managing-director roles and 14% of partner positions. Goldman Sachs has said the case is without merit.