I spent an hour yesterday being interviewed by a reporter from The Spectator, the Columbia University student newspaper. The topic was a recent unsuccessful effort by some student protesters to get Columbia to reduce very slightly its sky high tuition, the highest I believe in the nation. If they ever do a story on the interview I will provide a link to it.
The experience got me thinking yet again about what higher
education in America has become and although I could not walk today – freezing
rain this morning – I did lie in bed for a while having an imaginary
conversation with one of the many experts who claim that the way out of America’s
severe income inequality is to provide expanded first rate tertiary education
to America’s young people. I am going to take a few moments to indicate why I
think this is an illusion. I have talked about this before on this blog and
what I have to say strikes me as self-evident, but then the central claims of
Karl Marx’s economics theory also strike me as self-evident and we know how
popular they are.
I view these remarks as an homage to the old roadrunner
cartoons with their memorable villain, Wile E Coyote. The entire argument that
I shall offer, such as it is, is simply an application of that old familiar
standby of elementary logic courses – The Fallacy of Composition.
There are something like 130 million men and women who are
employed full-time or part-time or self-employed in the United States these
days (rather fewer this year than last of course thanks to the pandemic.) This
is so many people that it is hard to think about the economy as a whole and the
impact on it of higher education, so to simplify things (and here is the
tribute to the roadrunner) let us imagine that the entire American economy
consists of one huge private corporation called the Acme Company. We can
imagine that Acme has an agricultural division, a manufacturing division, a
service division, a medical division, an education dividion, a legal division, a tech division, and so
forth.
Let us suppose that in order to get a job in management or
in one of the better paid positions in one division or another – positions that
offer salaries rather than wages, paid vacations, health benefits, retirement
packages, and other fringe benefits – an applicant has to have a college degree
from one of the better schools (since there are 4000 and more colleges and
universities in the United States offering a four year degree, by “better” I
simply mean a degree from one of the top 2000 or so colleges or university
campuses.) At the present time roughly 1/3 of adult Americans have bachelor’s
degrees, so let us suppose that those with degrees from the “better” schools
constitute perhaps 20% of the workforce. These are, by and large, the fortunate
ones with good jobs.
Everything is going along smoothly at Acme in its wildly
unequal fashion until, thanks to a program enacted by a progressive federal
administration, the number of people coming out of “better” schools with
bachelor’s degrees grows from 20% of the workforce to 30%. The Director of
Personnel in Acme central headquarters makes an appointment to see the CEO and
says to her, “Boss, so many people are applying for jobs with bachelor’s
degrees from good colleges and university campuses that we are going to have to
expand the ranks of our corporate management to accommodate them, and cut back
on workers in the agricultural, manufacturing, office work, and distribution
branches to compensate.”
“What on earth are you talking about?” she replies. “We have
all the managers we need. And we certainly cannot afford huge cutbacks in
agriculture, manufacturing, service and distribution, and so forth. You will have to find some other way to
handle the problem.”
“Well,” the Director of Personnel says, “we cannot in
fairness choose arbitrarily which applicants will get these plum jobs. We must
find some way to rank them that is at least perceived as objective, no matter
how irrelevant it is to the satisfactory performance of their functions. I
know, we will require as a precondition for management jobs an MBA. Nobody can
complain about that!”
And so it is done. After a while, all up and down the line
in Acme, the educational credentials required as prerequisites for jobs at
various levels of compensation are raised, without in any way altering the
steep pyramid of unequal wages and salaries and without noticeably changing the
productivity of the workforce of Acme. Thoughtful critics of this inequality,
concerned about the steepness of the job pyramid, begin to write scholarly
articles explaining that post baccalaureate education, not merely baccalaureate
education, is the key to flattening the pyramid.
When I went off to college 71 years ago, only 5% of adult
Americans had a college degree. Almost ¾ of a century later, that percentage
has been increased almost sevenfold without in any way altering the inequality,
save to make it somewhat worse now than it was then.
As I said when I began this post, this is an example of the
Fallacy of Composition. From the fact that any individual in the society can
significantly improve his or her earning potential by acquiring a tertiary degree,
it does not follow that all the individuals in the society can do so, any more
than it follows from the fact that any one individual can be the first person
to leave a concert that therefore everybody in the audience can be the first
person to leave the concert.
There is of course one way in which a dramatic improvement
in society-wide educational accomplishment could result in a significant shift
in the pattern of compensation and that is if the availability of a large
population of workers with advanced education made it possible for corporations
to adopt alternative techniques of production or delivery of services that by
their nature were compatible with or even compelled a less unequal structure of
compensation. But the history of the last century or so shows us that is simply not the case. As Gabriel Kolko demonstrated half a century ago in his
book Wealth and Power in America and as the work of countless economists since
has confirmed, the patterns of inequality in the American economy have been
remarkably stable for well over a century despite the radical transformations
that have taken place.
I lay there in bed recalling that the father of my first wife ended his career as a vice president of Sears Roebuck Corporation even though he never graduated from high school.
Then I got up and had breakfast.
24 comments:
Your story reminds me of a story I read about on one of the MMT econ sites I read.
That story goes something like this. Somebody has 100 dogs and a large field. Everyday they put out 95 bones in the field and let the dogs out. And everyday at least 5 of the dogs come back not having found a bone. So the owner decides to hire some economist to train the dogs who haven't found a bone to be better at finding bones and to some extent it seems to work for the dogs that got the training but still everyday at least 5 dogs continue to return not having found a bone. And so they keep intensifying the training until eventually the economist concludes that clearly some of the dogs just don't want a bone. And that is pretty much the mainstream economics analysis of how the labor market works.
Well it was a while ago I read that and I probably have not related it entirely accurately. But I still think it is interesting.
This is a really incredible assessment of one of the big inaccuracies proclaimed by higher education. It reminds me of a quote by the great W.C. Fields where he says "I spent half my money on alcohol, women, and gambling. The other half I wasted." If Fields were alive today, the first half of that quote may still be the same, and in all honesty, the second half might be as well. Only he'd have an undergraduate degree to show for it this time around.
As a current undergraduate student myself in the humanities, I can't help but also feel that higher education has lost sight of its abilities to enlighten. If it merely sees itself as a degree factory--and that's all it acts as--what's the point of going when all the same information is available in libraries and online? And in reading your assessment of its economic value, it seems that both sides of the coin it promises are now worthless. Or at the very least, both sides of the coin are not worth their cost.
Jerry Brown, I just love that :-)
Isn’t the situation like the two men (or women, or a man and a woman) who are confronted by a grizzly bear. One says to the other, “We’re going to have to outrun the bear.” The other responds, “I don’t have to outrun the bear. I just have to outrun you.” That is, the necessity of obtaining a degree is not to insure that you will obtain the best job possible, but so that you can stay in the game and not be left behind. In this context, obtaining the degree still has economic value, relative to how it would be if you did not obtain the degree. This perspective does not address Guy Mizrahi’s criticism of the value of an education as a source of knowledge and enlightenment, but one still has to live.
(There, that wasn't so bad, and I did not insult anyone.)
At the risk of being accused of “babbling on,” I offer the following. The issue of income disparity is a function of two separate questions: (1) why is there disparity in income to begin with; (2) how is it determined who are rewarded with the higher incomes/benefits. Income disparity occurs when more employees are kept in the lower paying status, as others are advanced into the higher paying status, and how does one demonstrate entitlement to the higher paying status?
In any company in any industry sector, simply by virtue of organizational dynamics, there are going to be Indians (who may be hourly employees) and Indian chiefs (supervisors). As the adage goes, that there are too many chefs in the kitchen, supervisors are needed in any organization to make the tactical, strategic. Leadership decisions regarding how the organization is going to implement its business interests, i.e., sell its services/products in order to make a profit. The supervisors generally have more responsibility than the non-supervisor employees – they often have to take their work home and work after hours; they have to be available on week-ends; they have to attend meetings, which are often boring; etc. By virtue of these additional duties, they are compensated more – no one would wish to be a supervisor and assume these additional responsibilities without being compensated more – in salary, and/or benefits, and/or perquisites (company car, paid vacation, etc.)
So, income disparity is built into the organizational dynamics. The question Prof. Wolff raises is why does this disparity not narrow when more people are obtaining baccalaureate and post-graduate degrees? It seems to me that the disparity remains the same, or gets worse, because as the company hires more employees, it does not increase the number of supervisors it appoints to keep pace with the increase number of employees. If more supervisors were appointed, earning the higher salaries, etc., then the disparity between the hourly employees and the salaried supervisory employees would necessarily lessen. The reason fewer supervisors are being appointed is due to the business philosophy of doing more with less.
In addition, if the income of the hourly employees does not keep pace with the increased salary of the supervisors, the income disparity will just get worse. The latter disparity is a function of organizational strength, i.e., unions. With the decline of unions and union power (starting with Reagan’s termination of the air traffic controller), blue color wages have not kept pace with inflation, or with the increased income of supervisors.
The question of who gets appointed to the supervisory positions and on what basis – on merit, and how it is measured, or, as some have suggested in previous comments, based on being a toady to the boss - is a separate question from why the disparity exists to begin with. (Another public opinion fraud perpetrated by Trump was his persona in The Apprentice, in which competitors were advanced and not fired, as a business man making decisions based on merit, as demonstrated by the performance of various business challenges. As President, he did not make decisions based on merit; they were based on toadyism – which was probably the way he actually ran his businesses, aside from the TV show.) With more students graduating college, additional requirements have been superimposed as the basis for making the advancement decision. Whether these additional requirements are rationally related to what constitutes a good supervisor will vary from company to company. Still, the decision as to who shall advance does not affect income disparity, the causes of which are discussed above.
Well Marc or MS or Samuel Chase or whatever, you have just entirely missed the point of my post, I mean entirely. It was not really that hard to understand.
From a recent report by P. Solman on PBS NewsHour, the median (or possibly he meant the average, not the median, whatever) annual income of skilled tradespeople such as plumbers and electricians in the U.S. is very close to the average income of people with four-year college degrees. Yet there are more openings for such skilled tradespeople than there are applicants for the apprenticeships and/or the trade schools and/or the vocational courses that are the routes into these trades. If I were a young person and mechanically inclined to some extent, I think I might rather be a tradesperson than, say, a corporate drone sitting in front of a computer writing memos about marketing strategy or whatever. But as Solman noted, these trades are still looked down on and stigmatized by some, though that is perhaps starting to change.
P.s. The above is not directly related to the orig post except insofar as it bears on the continuing and somewhat misplaced emphasis on a four-year college degree as a supposedly necessary ticket to "getting ahead."
RPW: I think in some sense my only real goal in my business ethics classes (taught in a philosophy department) is to get my students to see this kind of thing as a fallacy of composition. I'm not sure that I've ever succeeded. I always get some version of the Samuel Chase response, over and over and over again. The fact that neither your example nor Jerry Brown's (which is beautiful, and which I will try out on my students in the coming weeks) seems to work does not give me hope. But, like you, I'll keep trying.
Not related to the current blog post, but perhaps related to recent discussions:
Cornel West is considering leaving Harvard because, as he describes it, the university apparently feels he is too controversial a figure to be granted tenure. West tweeted:
"Is Harvard a place for a free Black man like myself whose Christian faith & witness put equal value on Palestinian & Jewish babies- like all babies- & reject all occupations as immoral?
After being tenured at Yale, Harvard, Princeton & Union Theological Seminary, the recent Harvard denial of a tenure process strikes me as a political decision I reject. Nothing stands in the way of my profound love for & solidarity with oppressed peoples wherever they are!!"
He included with the tweet a link to a Boston Globe article for which he was interviewed.
Since Eric brought this (Cornel West) up, I can't resist jumping in here. Frankly I would rather participate in the comment thread on this matter going on at the Daily Nous (DN) blog, but that site is having technical problems that are affecting my ability to connect and post comments there (though I did manage to post one short one).
First, I haven't read the Boston Globe article, but acc to the Daily Nous summary of it, Harvard is offering West a 10-year contract w pay raise plus some sort of endowed (but non-tenured) chair. His current position there is a "professor of the practice."
Second, I have no idea why Harvard is not giving him a tenure process. The reasons could conceivably be political, as West's tweet quoted by Eric suggests, but I tend to doubt it.
So what could be the reasons? They could be financial, odd as that sounds, as one commenter at DN suggested. Or they could relate to the notion, raised by another DN commenter, that the Harvard admin is afraid he wouldn't pass an ad-hoc committee review since he doesn't produce what one might label "traditional scholarship" (recall that that issue was tied up w his earlier "dispute" with Summers which led to his departure).
But I'll briefly say here what I said, in a more roundabout way, in a DN comment that apparently hasn't gone through b.c of the technical problems:
If Harvard can't find a way to make an occasional exception to the standard tenure rules and criteria when it wants to, what's the point of being Harvard? Might as well be any old struggling, small, obscure, regional university. (I'm sorry if that sounds elitist -- so be it.) The bottom line is, I don't think Harvard's reputation, whatever it currently is, wd suffer if they gave West a tenure process, whereas having West tweet about how Harvard doesn't like his equal valuation of the lives of "Palestinian and Jewish babies" is not something the Harvard admin should be happy about.
P.s. Turns out my comment did go through at DN, and someone replied to me, making reasonable points about why carving out case-specific exceptions to established tenure criteria has downsides. (That's not an elegant sentence, but I'm tired, so whatever...)
A propos of RPW's original post, here is an extract from my critique of a proposed 'Code of Social Responsibility' developed by the the neo-Liberal National Government in 1990s New Zealand. Luckily it was not implemented.
3. Fallacious Thinking
There is a fallacy behind a number of the proposals. (See Issues 8, 9 and 10) The government rightly believes that even under conditions of high unemployment, the people most likely to get jobs are the go-getters (where ‘go-getters’ is a shorthand for those who seek qualifications and have managed to maintain a positive attitude). So the government concludes that the way to deal with unemployment is to bully the unemployed (and some other beneficiaries) into becoming go-getters. Since go-getters get jobs, if everyone were a go-getter everyone would have a job. (I don’t say that this fallacious argument is in the minds of the ministers, only that if they had thoughts at all they would have to be thinking something along these lines.) There are two things wrong with this idea.
1. You can’t bully people into having a positive attitude. Encouragement has to be encouragement - and this does not mean the threat of withheld benefits. On the whole people respond better to positive than to negative incentives. This is generally acknowledged as regards the rich (who are encouraged to be go-getters by allowing hem to keep more of the proceeds of their go-getting). But when it comes to poor people a reverse psychology is applied, and sticks are preferred to carrots. Profane scoffers might suggest that this reflects class bias on the part of the government. Perish the thought.
2. But even if the unemployed could be bullied into go-getting the fallacy in the government’s thinking should be evident to every economically literate person. Go-getters get jobs because (from the employer’s point of view) they are better than other people, because the stand out. Does this imply that if unemployed people became go-getters, they would all get jobs? No. Because if everyone were a go-getter, go-getters would not stand out. Thus the qualities of go-getting would be subject to inflationary effects. Once they became common they would cease to be valued. Employers, anxious to pick the best employee would spurn the ordinary go-getters (who by now would be ten-a-penny) and hang out for the super-go-getters. Unemployment could be just as bad as before.
Thus the effect of the policy would be to cause the unemployed a lot of grief, to cost the taxpayer a lot of money (it will cost a fortune to pay for the bullies to enforce the go-getting) but to do no good, since even if the bullying succeeds the problem of unemployment won’t be solved.
Why does the government fall for this simple-minded fallacy? I can only speculate. But I suspect it is because they prefer to believe that unemployment is due to a moral failing on this part of the unemployed than to political failings on the part of the government. If unemployment is due to a lack of go-getting grit then it is not the government’s fault. Since this is much the most comfortable hypothesis it is what they prefer to believe and the unemployed have to suffer in consequence. Disgusting isn’t it?
Perfect, Prof.Pigden, and rather better expressed too!
The question I have to ask is: Does my BA in Philosophy from UMass Amherst qualify as a degree from one of the 'better schools'?
@ Anonymous
sure, assuming your question is not tongue-in-cheek.
(Though a BA in philosophy from anywhere may be a bit hard to immediately translate into a job, wd be my guess... doesn't mean it's not worth having.)
p.s. also of course I have no idea of your age, I just assumed you're a recent grad. You could be 75 for all I know...
I think I may answer the question posed by anonymous with authority. Yes, a BA in philosophy from the University of Massachusetts counts as a degree from one of the better schools.
You are correct, Prof. Wolff, the point you were making was not really hard to understand. And I understood it perfectly.
You wrote that the belief the solution to reducing income inequality was to increase the number of individuals who have baccalaureate and post-graduate degrees “is an example of the Fallacy of Composition. From the fact that any individual in the society can significantly improve his or her earning potential by acquiring a tertiary degree, it does not follow that ALL THE INDIVIDUALS IN THE SOCIETY CAN DO SO, any more than it follows from the fact that any ONE INDIVIDUAL CAN BE THE FIRST PERSON TO LEAVE A CONCERT THAT THEREFORE EVERYBODY IN THE AUDIENCE CAN BE THE FIRST PERSON TO LEAVE THE CONCERT.” Another example: if one person in the audience stands up and does not block the view of everyone else in the audience, it does not follow that if more stand up, they will not block the view of more attendees at the concert. However, if only 10% of the attendees stand up, it will not necessarily block the view of everyone in the audience, depending on the percentage who stand up and where they are situated. If only 10% stand up, those seated behind them can still see by titling their heads to the side. It is likewise a fallacy to maintain increasing the percentage of those who possess the characteristic in question will necessarily have the same effect as having 100% of the individuals having the characteristic.
To reduce income inequality, it is neither necessary nor feasible to require that ALL OF THE INDIVIDUALS WHO OBTAIN BACCALEURATE OR POST-GRADUATE DEGREES BE GIVEN HIGHER POSITIONS IN MANAGEMENT. Per my comment, income disparity can be reduced by increasing the number of supervisors who are paid the higher incomes, in comparison to the percentage of employees who remain as non-managerial. I stated: “It seems to me that the disparity remans the same, or gets worse, because as the company hires more employees, it does not increase the number of supervisors it appoints to keep pace with the increase[d] number of employees. If more supervisors ‘[NOT 100%] were appointed earning the higher salaries, then the disparity between the hourly employees and the salaried supervisory employees would necessarily lessen.” The problem is most corporations, rather than spending additional money for more supervisors, instead take the money and give it to their highest management – the President, the Vice President, the CEO – for higher salaries they cannot justify by having increased the company’s productivity or efficiency.
In your example, the CEO of Acme rejects the proposal to increase the number of managers. Does the Director of Personnel heed her? He does not. He in fact does hire more managers, but in order to justify who gets appointed manager he superimposes an additional education requirement. The reason this strategy does not reduce income inequality is not that he imposes this additional requirement as a criterion for who deserves to be appointed manager, but that he does not increase the ratio of mangers to non-managers and fails to give the non-managers a higher income as well, thereby either keeping the level of income disparity the same, or making it worse. The problem is not superimposing the additional education requirement. The problem is failing to increase the ranks of managers relative to the number of additional employees. Arguably, if there were more managers, with the increased number of employees, the company would be more efficiently run, which would increase production. Instead, most corporations try to do more with less, and give the money they could have used to appoint more supervisors to giving extravagant bonuses to their highest management personnel, which increases income disparity. Income disparity has also increased because wages of hourly workers have not kept pace with inflation or the increased income of managers, due to the decline in both the number and power of unions.
So, no, I did not miss the point of your post. I was making an additional – and relevant - point.
I reply to Guy Mizrahi:
An educator, who didn’t realise that one of the things she was doing was providing entry tickets into the lower reaches of the elite, would be too naïve to be a teacher (which means of course that many educators in seats of higher learning are too naïve to be teachers.) Not being that naïve, I am well aware that *part* of what I’m doing is certifying that my successful charges have got what it takes to do a decent job in the elite and semi-elite occupations to which they aspire. But that does not mean that that is *all* I think I am doing. I am trying to turn out critical thinkers, with an awareness of ideas and issues that I think important, living vessels of culture (including scientific culture) who are capable, if they so wish, all making an enhanced contribution to a democratic society. And I suspect that such ambitions are widely shared among academics. So unless you are studying at any peculiarly benighted degree-mill, I would suggest that there is a lot to be gained from a university education besides a golden ticket into the middle or upper middle classes. Could you get the same level of intellectual or cultural enrichment from private study? Perhaps, if you are especially gifted and self-disciplined. But arrogant as I am, and good, as I take myself to be, at finding things out for myself, even I have to admit that there are some things well worth understanding that I could not have understood without the aid of competent teachers. For example I am now reasonably literate in formal logic, which I probably would not have been without the classes in that subject that I attended at Cambridge forty years ago. So I would suggest that a degree in the humanities can be a very valuable thing apart from the career opportunities that it provides. Whether it is sufficiently valuable to be worth the often exorbitant cost is another matter.
But from a careerist point of view there is this to be said. Having a college degree may not confer a very large advantage as compared with your competitors who *also* have college degrees. But if you *didn’t* have that degree you would probably be severely DISadvantaged. If only ten percent of the applicants for a given job have degrees then those degrees confer a massive advantage. If 60% have a degree then the advantage is much less. However the DISadvantage of NOT having degrees a great deal more. An employer is likely to consign those without degrees to the waste paper basket without further ado, unless they have some spectacular feature which makes them very obviously employable. Employers are likely to prefer people with degrees even for positions for which the relevant degrees on not strictly necessary. The fact that the job market is characterised by qualification-inflation, does not mean that you don’t need the relevant qualification. It means on the contrary, that to maximise your chances of getting ahead, you need not only a BA, but an MA or an MBA into the bargain.
The point that RPW and I have been trying to labour is that there is a divorce between what is individually rational – ‘Get that degree!’– and what is socially or politically rational – ‘Create a system in which almost everyone has a degree!’. Because ‘Get that degree!’ is good advice for any reasonably capable individual who wants to solve their *personal* problem of unemployment, it does follow that ‘Get everyone a degree’! add is good advice for a government seeking to solve the *general* problem of unemployment.
Charles Pigden,
I agree with what you have written regarding a humanities degree in both respects, that (1) it is important to be educated, and education by professors who are effective teachers can provide a better education than one can obtain on one’s own by searching through a library (unfortunately, in this regard, I have heard complaints by students who are majoring in the sciences and mathematics, primarily, that the classes are taught by teaching fellows from non-English speaking countries whose ability to speak English is so limited that it is very difficult to understand what they are trying to teach; this is not a xenophobic comment, but simply reporting what I have been told); (2) that not obtaining an undergraduate, and now a post-graduate degree, puts own at a severe competitive disadvantage, per my outrunning the bear comment above.
However, there is one discipline, at least in the United States, regarding which there has been serious and well-founded criticism regarding what the colleges which offer degrees in that discipline are doing, and suggesting that they only continue to do so in order keep the college in that discipline alive, and their administrators and the professors whom they employ to teach that discipline, employed. And that discipline – an opinion with which many who read this blog will concur – is law. The United States currently has a super overabundance of lawyers, who, once they graduate, are unable to find work. (I do not know what the situation is in New Zealand.) And the laws schools know this, yet they continue to admit students, paying high tuition, in high numbers. Now, while I believe that an education in law is a superb way to improve one’s analytical skills (many who read this blog would vehemently disagree), it does not have the inherent worth that an education in the humanities, for example, has. The primary reason that students apply to law school is for (1) the expectation of obtaining a high paying job at a prominent (usually defense) law firm upon graduation; (2) the prestige of being a lawyer; and (3) they don’t have the science background or the grades in science classes to get admitted to medical school. Although some attend law school with the intention of using their legal acumen to help others or to use the law to fight global warming, this is atypical. And they all believe that they will not be the one who gets left behind without a job offer and will be eaten by the bear, or will have to accept a low paying job as a legal assistant, rather than as a lawyer. The United States is literally clogged with lawyers. Again, all the laws schools know this, yet they continue to encourage college students to apply to their schools. Which does, I believe, raise a legitimate question regarding their ethics.
Charles Pigden,
Sorry, my error. Australia, not New Zealand.
After teaching for many years at several universities, this is the advice that more than 80% of the students currently attending college should follow (a well done report by PBS Newshour): https://youtu.be/c4s-4fK5r0w
Anonymous,
An excellent video on the alternatives to going to college.
Thank you for posting it.
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