The argument that the poor should return to school comes from those
who believe that America should be more of a meritocracy. Let's look at
schools first, and meritocracies next.
First, it usually takes tens of thousands of dollars to go to college (or start a business, the other method of "bootstrapping"), so there is something disingenuous in recommending this option to the poor. Student grants and loans are designed to overcome this obstacle, but they are not enough. In the 1993-94 school year, it cost a resident an average of $8,562 to attend a public university, and $17,846 to attend a private one.1 (This includes just the basics: tuition, fees, room, board, books and transportation.) Here are the average payments of the major student assistance programs:2
Pell Grant $1,418 SEO Grant 730 Perkins Loan 1,261 Work-Study 1,000 Stafford Loan 2,959 Total 7,368
So even full participation in these programs does not cover the
cost of college. And college crowds out the time that most people normally
reserve for work. Not surprisingly, most students tend to be starving students;
having money increases the likelihood of surviving to graduation. Unfortunately,
this means that the poor have much weaker bootstraps to pull themselves
But more importantly, the job market can bear only a limited share of knowledge-workers and professionals. As ideal as it would be to send everyone to college and then on to higher paying careers, this is utterly impossible: the job market can use only so many doctors, astronomers and marine biologists; it will always demand mechanics, farmers and waitresses. In fact, so many Americans have tried to get ahead by returning to school that there is a glut of college graduates in most fields. One third of all 1991 and 1992 college graduates hold jobs that do not require a college degree.3 As a result, competition to enter graduate school has reached a fever pitch.
The percentage of managerial and professional jobs can grow in the long run, of course, but this growth is extremely slow. The 80s were a period of tremendous turbulence in the job market, with entire industries rising and falling. But between 1983 and 1993, managerial and professional jobs rose only slightly, from 23.4 to 27.1 percent of the job market.4
This means that the job market is dominated by the mathematics of displacement. More than 99 percent of the time, a person who lands a managerial or professional job displaces someone else. Could better jobs come from just job growth alone? Unfortunately, no; between 1970 and 1989, job growth averaged only 2.5 percent a year, and besides, each professional job sees three non-professional ones created also.5 This is hardly a solution to increasing the percentage of better paying jobs.
The mathematics of displacement also refute the argument that everyone can get ahead by starting his or her own business. Once the market has reached its saturation point of construction companies, for example, any new entries are bound to fail. So if individuals are to get ahead in a job market based on displacement, they must compete and progress on their merit. Which raises the subject of meritocracies.
One of the oldest debates in society is that of equality vs. merit. Many believe that there is a trade-off between these two considerations. When a society rewards merit, competition becomes supreme, the fittest survive, and people get what they deserve. When society makes people more equal, they may become more civilized to one another, but they also lose their individual initiative and desire to excel, since it doesn't achieve as much. Most societies try to strike a balance between these two considerations.
Meritocracies come in two forms: unrestricted and moderated. The natural tendency of an unrestricted meritocracy is for power to concentrate in the hands of an ever smaller group. We have several adages that describe this principle: "Nothing succeeds like success," "It takes money to make money," "The rich get richer and the poor get poorer." Ross Perot described the dynamics of this process well. To paraphrase: "When you first start a business, you should turn whatever profits you make back into the business. And if you keep doing that, soon your money starts making money for you. I call this a money-making machine."6 Unfortunately, it is that machine -- and not the person -- which makes most of the money in the latter stages of fortune-building.
In an unrestricted meritocracy, slight differences in talent between two people will result in enormous differences of power and wealth over time. A good analogy is that of two boxers fighting for the world heavyweight title. Although almost evenly matched, the final result -- one getting knocked out, the other left standing -- bears no resemblance to their original talent. Obviously, there is not a one-on-one relationship between talent and reward here. In one sense, the victor did indeed earn the knock-out, but in another sense, the final result does not do justice to the defeated boxer's talents. While we might find this sort of meritocracy acceptable in games and sports, there is a real objection to applying this sort of destructive contest to an interdependent economy or society.
In a moderated meritocracy, those with the most merit advance to the highest positions, but the system redistributes a percentage of their money or power back to the lower classes. The advantages of this system is that it still provides individuals with an incentive to achieve, but also keeps the rest of society in the game. This is important because the talent pool from which merit is drawn should be kept as large and healthy as possible; it's the only way to ensure the maximum use of maximum talent. The alternative is serfdom, where 99 percent of the population barely survive, their labor going to enrich an educated and affluent 1 percent. It is not difficult to see that serfdom does not unlock the full potential of a society, and that the wealthy 1 percent might be even richer if they allowed the entire economy to thrive.
The history of empires bears out this point. When the empires of Spain, Holland and Britain reached their zenith, they had broad and thriving middle classes. In fact, scholars consider the shrinking of the middle class to be one of the historical symptoms of an empire in decline.7
Since 1980, conservatives have been increasingly advocating an unrestricted meritocracy. Observations that the richest 1 percent own 40 percent of America's wealth are met with one common response: "Well, they earned it." There are several rejoinders to this mindset, in addition to the ones outlined above. They are:
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1 The College Board, New York, NY, Annual Survey of Colleges, 1993.
2 U.S. Department of Education, Office of Postsecondary Education, unpublished data. Figures are estimates for 1993.
3 Michigan State University's Collegiate Employment Research Institute, 1993.
4 U.S. Bureau of Labor Statistics, Employment and Earnings, January issues, 1983 and 1993.
5 Calculated from a 1970 civilian labor force of 82.771 million and a 1989 force of 123.869 million. Source: U.S. Bureau of Labor Statistics, Bulletin 2307.
6 Personal recollection of a Ross Perot promotional video explaining his secrets for excelling in business.
7 A superb history and explanation of this point can be found in Kevin Phillips' Boiling Point, (New York: Random House, 1993), pp. 193-222.
8 For the harm caused to airlines and other industries by deregulation, see Donald Barlett and James Steele, America: What Went Wrong? (Kansas City: Andrews and McMeel, 1992), pp. 105-123.