The Meritocracy Trap

by Daniel Markovits

  Graduate and especially professional degrees yield a still greater income premium. In 1963, the postgraduate income premium, compared to a BA, was effectively zero. Today, by contrast, the postgraduate premium is nearly 30 percent, even for a generic postgraduate degree. The premium for an elite graduate or professional degree is much greater still. Professional school graduates at just the 75th percentile by income enjoy lifetime earnings of about $6.5 million, or nearly five times the median high-school-only graduate. And the very most elite professional schools produce yet greater incomes.

  The enormous lawyers’ incomes reported earlier—millions of dollars for top partners and hundreds of thousands of dollars for top associates—are concentrated in elite firms, which are dominated by graduates of elite schools. Median first-year pay for graduates of top-ten law schools is approaching $200,000; a recent study of Harvard Law School graduates roughly ten years out (which is to say, in their late thirties) reported a median annual income for men of nearly $400,000; and 96 percent of the partners at the most profitable law firm (making over $5 million per year) graduated from a top-ten school. Overall, graduates of top-ten law schools make on average a quarter more than graduates of schools ranked eleven to twenty and a half more than schools ranked twenty-one to one hundred. These outcomes produce massive stratification even within the legal profession. They also drive up the internal rate of return on attending law school to between 15 and 30 percent, depending on how much tuition assistance a law student receives.

  In business schools, graduates of top-five programs make an average salary four years out of $215,000, while the highest-paid recent graduates capture incomes in excess of $1 million, and the top programs produce double to triple the gains of the fiftieth-ranked program. The jobs that top graduates get again explain their incomes. At Harvard Business School—where 1.3 percent of the class of 1941 took finance-sector jobs—fully 28 percent of the class of 2016 went to work on Wall Street and 25 percent joined consulting firms. As with law, top MBAs pay off almost at once: the five-year income gain associated with graduating from the top five business schools—increased salary minus tuition, fees, and forgone wages during the student years—now exceeds $75,000.

  These numbers also emphasize just how narrowly meritocratic inequality frames the superordinate working class—how few truly glossy jobs there are. The generic college degree—which puts someone into the most educated third of U.S. adults—will keep a worker from falling into the bottom of a polarized labor market, but it will no longer carry her anywhere near the top (nor could it, when income growth is concentrated in the top 5, 1, and one-tenth of 1 percent). As the CEO of CareerBuilder.com says, “The B.A. gets you in the door—there’s not much unemployment for people with a college degree—but it doesn’t allow you the wage growth you’d expect.” The non-elite BA, one might say, is being overtaken by technological advances, much as lower qualifications were earlier overtaken by prior advances, including those that once gave the BA its value.

  The thought that a generic BA constitutes a general ticket of admission into the elite is less a symbol of labor market polarization than a holdover from a prepolarized, more democratic view of work—really, a midcentury idea.

  IDLED BUT EXCLUDED FROM LEISURE

  In 1883, Paul Lafargue (who was Karl Marx’s son-in-law) wrote a tract promoting The Right to Be Lazy. In the first decades of the twentieth century, on the heels of early victories in the fight for a forty-hour workweek, some labor unions began to push to reduce work further. Calls for a thirty-hour week became increasingly prominent, and some of the more radical unions sought still shorter hours (the Industrial Workers of the World even went so far as to print T-shirts calling for a “four-day week, four-hour day”). Disinterested observers took these calls to be expressing a serious proposition. No less than John Maynard Keynes, writing around 1930, predicted that technological innovation would effectively eliminate long (or even moderate) human hours and labor effort for the masses, imagining that a three-hour workday might be possible within a century.

  Keynes and others hoped that these developments would usher in something approaching a utopia—a new world in which everyone might enjoy a form of life that, in their world, only elites could afford. These hopes were natural in their time. Work remained drudgery, and leisure still constituted honor. The idea that through industrialization, machine power would relieve the working classes of the yoke of their labor naturally captivated hopeful dreamers.

  Much of what was predicted has in fact come to pass, although not in the way that was expected, and with results more nearly ruinous than utopian.

  Technological innovation has indeed relieved the working and middle classes of much of the old burden of labor. Childhood and retirement take up larger shares of life than they used to, and participation in the labor force has fallen among adults of prime working age. Jobs themselves also require fewer hours than they used to, at least outside of the elite. The sixty-plus-hour weeks that dominated working-class life in 1900 are therefore almost unheard of today, and even forty-hour weeks are rarer for middle-class workers than they were at midcentury. Moreover, unskilled and even mid-skilled labor has become almost incomparably less physically strenuous and less dangerous than it once was. At the same time, middle- and working-class Americans are wealthier than ever before. Overall, the bottom two-thirds of the economic distribution today expends massively less labor effort than its predecessors did, under less arduous work conditions, even as it enjoys material comforts that they could hardly have imagined. These developments do not perhaps go quite as far as Keynes and others imagined, but they make considerable strides in the utopian direction.

  If utopia remains far out of reach, then, this is because Keynes and others got their predictions about values—about how the future would measure honor—almost totally wrong.

  The utopians all believed (as Keynes made explicit) that shorter workdays would yield not just prosperity but also greater and widely shared leisure—with leisure implicitly understood in the thick sense, associated with the aristocracy, of exploit that confers honor and status. They believed, in other words, that technology would allow the masses to acquire a share in the form of life that in their day constituted the elite. Innovation, according to this view, would relieve the masses of not just the material burdens that working involved, but also of the attendant social disabilities and status degradations. The world ushered in by the technological revolution would be not just beneficent but inclusive. Even if it fell short of full economic equality, the new order would undo gross distinctions of caste or class and sustain the dignity and social participation of all its members. The spread of leisure—again understood not merely as the absence of drudgery but rather as the presence of dignified recreation—would be both the warrant and the measure of the coming equality. This is what made the visions utopian.

  The utopian vision of universal leisure fell at the first hurdle. Technological innovation has not just changed the brute facts about how people spend their hours; it has also, and by the same stroke, remade social meanings. As new technologies revolutionize work to concentrate production in the elite, they simultaneously fuse labor and leisure, so that industry and exploit become one and the same.

  Even as the mass of workers have been released from drudgery, they have also (and by the same mechanism) been excluded from industry. The polarized labor market leaves the middle class with not enough—not nearly enough—to do. Once again, the enforced idleness—including not just unemployment but also involuntary underemployment and withdrawal from the labor market—that meritocratic inequality now imposes on mid-skilled workers roughly equals, in size and scope, the enforced idleness that gender discrimination imposed on women at midcentury.

  Because industry now constitutes honor, this idleness no longer sustains status-conferring leisure but rather imposes its opposite—listless indolence and its attendant degradations. And even when middle-class
workers do find work, their increasingly gloomy jobs—subject to intrusive, nerve-racking, and degrading surveillance and control—cannot give them the dignity and social standing that superordinate workers get. Amazon warehouse workers have their movements tracked and regulated to the footstep, and the company has patented a wristband that provides haptic feedback to steer workers’ hands as they fill boxes and can identify when workers use the bathroom or just scratch themselves or fidget. Uber drivers must accept ride requests, to unknown destinations, within twenty seconds of receiving them.

  Idleness under meritocracy produces almost precisely the social effect that toil produced under aristocracy (and the opposite of the effect that leisure once produced): just as toil was the antithesis of dignity in an aristocratic world that worshiped leisure, so idleness has become the antithesis of dignity today in a meritocratic world that worships industry. Gloomy jobs beget gloomy lives, and the bitter despair and resentment that the meritocracy trap imposes on the middle class draw from roots embedded deep in meritocratic inequality’s economic and social logics.

  This is why declining middle-class labor produces the polar opposite of the flourishing that Keynes and others so eagerly hoped for—why Americans today rightly understand middle-class idleness as a grave social malaise rather than a happy expansion of privilege, as more nearly heralding a coming hell than heaven. Even technological fantasies tend now toward not utopia but rather its opposite.

  Meritocratic inequality prosecutes a pervasive, two-pronged attack on the middle class, as new economic facts deprive the middle class of industry and new norms deprive it of honor. Meritocracy’s essential logic concentrates advantage and then frames disadvantage in terms of individual defects of skill and effort, as a failure to measure up. This explains the otherwise mysterious anger and contempt that increasingly overwhelm society: the populism that engulfs politics, even during an economic expansion, and the self-inflicted deaths (from addiction, overdose, and suicide) that increase overall mortality, even without plague or war. Both upheavals are concentrated in people with middle-class incomes but without college degrees—precisely the group that meritocratic inequality condemns as redundant.

  Gloomy jobs cast a pall over those who must endure them. And meritocracy makes skill into a fetish—an object of desire, invested with almost magical powers, that frustrates those who cannot attain it.

  OVERWHELMED BY INDUSTRY

  The work arrangement that once built the American middle class—lifetime employment in respectable mid-skilled work, rising up a smooth hierarchy of small but steady promotions—is simply no longer on the table. Loan officers and stockbrokers, middle managers, independent merchants, and skilled tradesmen are all disappearing. The hollow middle creates a “nonlinear relationship between earnings and hours,” and more generally between eliteness and industry, so that “a flexible schedule often comes at a high price.” The only real alternative to the exploitative intensity of superordinate work is subordinate work, and elites who rebel against glossy jobs consign themselves to gloomy ones. A “winner take all” society therefore arises, in which the distribution of income and status comes to resemble not a slope but a cliff.

  At midcentury, bottom-heavy income growth pushed each rung of the income ladder nearer to the rung above it. By 1970 the consequences of rising from the 50th to the 75th percentile of the income distribution, or from the 75th to the 99th, and especially from the 99th to the 99.9th, had become so small that Americans from the middle class through the elite were all secure, with little to lose from falling down a rung and less to gain from clawing up one.

  Since then, meritocratic inequality’s top-heavy income growth has pulled the rungs of the income ladder ever farther apart, with the biggest gaps coming at the very top rungs. This makes the competition to climb the ladder most intense at the very top, where rising from the 90th to the 99th percentile, or from the 99th to the 99.9th (or for that matter the 99.9th to the 99.99th) makes the difference between economic stagnation and skyrocketing wealth, between the struggling middle class and the modern-day aristocracy. A meritocrat cannot truly succeed simply by beating ninety-nine out of every hundred competitors; she must beat ninety-nine out of the hundred who have already beaten ninety-nine out of a hundred. The most successful meritocrats therefore become the most insecure. The pressure inside meritocracy’s shrinking cage rises inexorably.

  In a labor market with this distribution of jobs, work/life balance is not on the menu. To recover leisure a person must altogether abandon superordinate work, and the income and status constituted by such work, and exit the elite. Moreover, the immense cost of elite education means that this choice will cascade down through the generations. A superordinate worker who rejects self-exploitation brings his whole world crashing down—on his children. The abrupt cutoff at the cliff’s edge therefore puts intense pressure on those whose first choice would be to live halfway up a hill but who would rather scratch and claw to hang on to a cliff than be pushed off.

  The mechanics of meritocratic production put additional upward pressure on elite industry, driving superordinate workers to yield ever more intense effort and ever-longer hours—more than anyone actually wants—in what economists call a rat-race equilibrium. Competitive rowers illustrate the effect in action. Victorious single scull rowers typically celebrate extravagantly when they cross the finish line; rowers in victorious eight-person boats, by contrast, slump immediately after the finish in displays of conspicuous exhaustion. The single scull rowers show, in the spirit of Veblen, that they did not exhaust their full capacities to achieve victory but rather won at their leisure, as one might say. But the eight-oared shell—an averaging device—disguises each rower’s individual contribution to the boat’s speed. Conspicuous exhaustion signals productivity where productivity cannot be measured directly.

  Superordinate workers, doing sophisticated, fluid tasks, face the same problem. When individual effort influences group production but employers cannot measure individual productivity directly, they use long hours as a proxy and may even eliminate short-hours jobs entirely to screen out less effortful or productive workers. The rat-race effect is so powerful that when one elite firm, concerned that its employees were working too hard, granted unlimited vacation time, this triggered a reduction in vacation actually taken.

  Together, these mechanisms drive up elite work hours. Cross-country comparisons show that work hours, especially for elites, are higher in countries with greater economic inequality. The cross-country effect is substantial: for example, according to one estimate, the difference between inequality in the United States and Sweden accounts for nearly 60 percent of the longer work hours in the United States. A similar effect exists within the United States but across industries: increases in long work hours correlate to increases in within-industry income inequality. Moreover, rat-race effects have been demonstrated empirically, for example, in connection with the hours that elite law firms require associates to bill in order to make partner. One prominent study estimated that nearly half of the associates it considered worked too many hours as a result of these perverse incentives.

  The rich as a class do not benefit from any of this, as each person’s increase imposes status losses on all others even as it confers status on himself. Competitive industry establishes a prisoner’s dilemma, in which the elite earns and consumes collectively too much and must work collectively too hard in order to finance the excess. The stories of obviously self-destructive elite overwork recounted earlier may be multiplied so readily—effectively without end—that they have become a familiar trope among meritocrats. Managing directors, CEOs, and professional firm partners tell of owning extravagant apartments filled with just a mattress and sleeping bag, because they lack time to take delivery of furniture. The empty apartments capture the imagination because they symbolize lives devoid of everything but work.

  Indeed, elite workers today are almost expected not to have personal
lives. David Solomon, co-head of investment banking at Goldman Sachs, observes that while bankers worked long hours even in the 1980s, it was acceptable to leave the office in the evening and pick up voicemail in the morning. Now “if someone sends you a message and you don’t respond in an hour they start to wonder if you’ve been hit by a car.” Virtually no part of the meritocratic elite’s personal life is proof against the encroachments of work. A prominent report of the American Bar Association observes that “stories of lawyers closing deals or drafting documents in hospital delivery rooms are disturbingly common,” as are stories of missing children’s performances and siblings’ weddings on account of deadlines, and of shifting family funerals to make meetings.

  These and other similar burdens cumulate. An ethnography of Wall Street reports a representative story of a “happy guy in college” who joined Morgan Stanley, gained thirty pounds, and became “a snappy . . . really uncomfortable guy to be around . . . [who] never smiled.” And in one study of elite bankers, “eager and energetic” newly hired college graduates became, by their fourth year on the job, “a mess,” suffering from “allergies and substance addictions” and even “long-term health conditions such as Crohn’s disease, psoriasis, rheumatoid arthritis, and thyroid disorders.”

  Stress-related workers’ compensation claims—especially brought by elite workers—have exploded, tripling in just the first half of the 1980s. The Palo Alto Medical Foundation, which sends a mobile doctor’s office around the campuses of many of Silicon Valley’s largest employers, has seen an epidemic of stress- and anxiety-related conditions among elite workers and commonly diagnoses vitamin D deficiency—in a climate that provides 260 annual days of sunshine.

  Even efforts to combat elite overwork only emphasize the extent of the problem. The financial services firm UBS has resorted to asking junior bankers to take two hours off each week to attend to “personal matters.” Goldman Sachs now instructs summer interns not to work through the night and has required analysts to take Saturdays off. And Morgan Stanley has rebranded vacations as four-week paid “sabbaticals” in the hope that vice presidents will take them and has committed to monitoring the scheme so that employees are not perceived as “weak” for taking time off.