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I think that when it really comes down to it, it is about skills. You can have the hook up and be completely incompetent, which will eventually show... or not have any hook ups and have the undeniable professional qualities that will get you wherever you want to go. I think that it does throw a wrench into the fairness of the job search, but like with anything in life nepotism sometimes gives some people an advantage. Is is right or wrong? I think with all things being equal in the job applicants it is not wrong to utilize nepotism.... but it doesn't always work like that.
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