The Meritocracy Trap

by Daniel Markovits

  The pattern holds in academia also: in one study analyzing business, computer science, and history departments, just a quarter of all universities accounted for the production of as much as 86 percent of tenure-track faculty; in some subjects, fewer than ten departments produce over half of all ladder faculty. See Joel Warner and Aaron Clauset, “The Academy’s Dirty Secret: An Astonishingly Small Number of Elite Universities Produce an Overwhelming Number of America’s Professors,” Slate, February 23, 2015, accessed November 18, 2018, www.slate.com/articles/life/education/2015/02/university_hiring_if_you_didn_t_get_your_ph_d_at_an_elite_university_good.html, citing Aaron Clauset et al., “Systematic Inequality and Hierarchy in Faculty Hiring Networks,” Science Advances 1, no. 1 (2015), http://advances.sciencemag.org/content/1/1/e1400005/tab-pdf. See also Robert L. Oprisko, “Superpowers: The American Academic Elite,” Georgetown Policy Review, December 3, 2012, gppreview.com/2012/12/03/superpowers-the-american-academic-elite/.

  was effectively zero: In 1965, even the Cravath firm, long the market leader in lawyer salaries, paid first-year associates just $7,500 (or roughly $55,000 in 2015 dollars). See Tamar Lewin, “At Cravath, $65,000 to Start,” New York Times, April 18, 1986, accessed November 18, 2018, www.nytimes.com/1986/04/18/business/at-cravath-65000-to-start.html (“Setting the pace in compensation is a tradition at Cravath. In 1968, when Cravath nearly doubled its starting salary, to $15,000, it began a pay spiral that has raised the going rate at the fanciest Wall Street firms to more than $50,000.”). Similarly, the median first-year salary for Harvard Business School graduates today is 50 percent more in real terms than the 1977 median. See Harvard Business School, “Recruiting: Data & Statistics,” accessed October 13, 2018, www.hbs.edu/recruiting/data/pages/detailed-charts.aspx. And as recently as 1991, the average salary four years out from an elite MBA was just $63,000 (roughly $110,000 in 2015 dollars), while a study of MBA incomes discarded a salary of $450,000 (or about $800,000 in 2015 dollars) as an outlier so far from the pack that its inclusion would misleadingly skew averages. See Charles A. O’Reilly III and Jennifer A. Chatman, “Working Smarter and Harder: A Longitudinal Study of Managerial Success,” Administrative Science Quarterly 39, no. 4 (December 1994): 614.

  For a more general report on the professional school premium at midcentury’s close, see Michael Simkovic, “The Knowledge Tax,” University of Chicago Law Review 82 (2015). Hereafter cited as Simkovic, “The Knowledge Tax.”

  is much greater still: The postgraduate income premium relative to a high school education only is greater still and is now 70 percent higher for men and 90 percent higher for women than it was as recently as 1970. See Simkovic, “The Knowledge Tax,” 2036–37, Tables 1 and 2. Simkovic used data from the Minnesota Population Center. Integrated Public Use Microdata Series, Current Population Survey, “Current Population Survey Data for Social, Economic and Health Research,” https://cps.ipums.org/cps/.

  Much of this increase has come since 2000. See “Wealth by Degrees,” The Economist, June 28, 2014, www.economist.com/finance-and-economics/2014/06/28/wealth-by-degrees; David H. Autor, “Skills, Education, and the Rise of Earnings Inequality Among the ‘Other 99 Percent,’” Science 344, no. 6186 (May 2014): 843–51, 849, Figure 6A. See also David H. Autor, Lawrence F. Katz, and Melissa Schettini Kearney, “Trends in U.S. Wage Inequality: Revising the Revisionists,” Review of Economics and Statistics 90, no. 2 (May 2008): 305, Table 1. Hereafter cited as Autor, Katz, and Kearney, “Trends in U.S. Wage Inequality.”

  five times the median high-school-only graduate: Carnevale, Rose, and Cheah, “The College Payoff,” 3, 7. These are 2009 dollars. Similarly, by 2010, the average male worker with a graduate or professional degree earned $86,700 more annually than the average man with a high school education only, and the average woman earned $50,600 more. See Simkovic, “The Knowledge Tax,” 2036–37, Tables 1 and 2.

  approaching $200,000: Forty to 60 percent of the graduates of top-tier law schools take jobs as associates at large, prestigious firms. “The Top 50 Go-To Law Schools,” National Law Journal, March 6, 2017, accessed November 18, 2018, www.nationallawjournal.com/id=1202780534815?slreturn=20170312154418. These firms paid first-year associates $180,000 in 2017, and several have increased this to $190,000 in 2018. Year-end bonuses raise incomes higher still.

  These numbers understate the size of the long-term flow from elite law schools to elite firms, as many graduates of the most prestigious schools spend their first year or two after graduation in expressly short-term judicial clerkships and are thus reported in the data working outside of large firms. The clerkships, however, are widely understood as preliminary to large-firm employment; indeed, large signing bonuses for former law clerks mean that the clerks are even—indirectly—paid by the firms.

  nearly $400,000: See David Wilkins, Bryon Fong, and Ronit Dinovitzer, The Women and Men of Harvard Law School: Preliminary Results from the HLS Career Study (Cambridge, MA: Harvard Law School Center on the Legal Profession, 2015). The median was $370,000 in 2007 dollars. Female graduates had median incomes of $140,000, and their spouses had median incomes of $200,000, yielding a combined household income, at $340,000, just outside the top 1 percent. (Note that the study also surveyed graduates from decades earlier and later, who had lower median incomes. This is not surprising, as the earlier classes would have preceded the greatest rise in top incomes, and the later classes would still hold more junior jobs.)

  graduated from a top-ten school: “Attorney Search,” Wachtell, Lipton, Rosen & Katz, accessed July 25, 2018, www.wlrk.com/Attorneys/List.aspx?LastName= [inactive].

  schools ranked twenty-one to one hundred: For the claim about starting salaries for top-ten law school graduates, see Susan Adams, “Law Schools Whose Grads Make the Highest Starting Salaries,” Forbes, March 28, 2014, accessed November 18, 2018, www.forbes.com/sites/susanadams/2014/03/28/law-schools-whose-grads-make-the-highest-starting-salaries/#73a6c3389ec7, and Staci Zaretsky, “Salary Wars Scorecard: Which Firms Have Announced Raises?,” Above the Law, June 13, 2016, accessed November 18, 2018, http://abovethelaw.com/2016/06/salary-wars-scorecard-which-firms-have-announced-raises/. (The figure does not reflect salaries at judicial clerkships, which are treated as nonpermanent jobs.) For the comparison between early career (second- and seventh-year) salaries for graduates of schools ranked in the top ten, eleven through twenty, and twenty-one through one hundred, see Paul Oyer and Scott Schaefer, “Welcome to the Club: The Returns to an Elite Degree for American Lawyers,” Stanford GBS Working Paper no. 3044 (December 11, 2012). Hereafter cited as Oyer and Schaefer, “Welcome to the Club.”

  These income differences follow directly from differences in the kinds of jobs that graduates of super-elite and less elite law schools get. Graduates of top-ten law schools join the nation’s largest and most lucrative law firms at nearly twice the rate of graduates of schools ranked eleven through twenty (46 percent versus 27 percent), and they eventually make partner at roughly one and a half times the rate of graduates of those schools and at quadruple the rate of graduates of schools ranked twenty-one through one hundred (as of the summer of 2007, for graduates between 1970 and 2005, 13.4 percent of graduates from schools in the top ten, 8.9 percent of graduates from schools ranked eleven to twenty, and 3.5 percent of graduates from schools ranked twenty-one to one hundred were partners at one of 285 of the 300 largest law firms in the United States). See Oyer and Schaefer, “Welcome to the Club,” 9, 19.

  how much tuition assistance a law student receives: The internal rate of return ranges between roughly 13.5 percent for those who pay tuition of $60,000 per year, to roughly 19 percent for those who pay $30,000 per year, to roughly 32 percent for those who attend law school on full scholarship. See Michael Simkovic and Frank McIntyre, “The Economic Value of a Law Degree,” HLS Program on the Legal Profession Research Paper No. 2013-6 (last modified November 26, 2014), Table 10, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2250585. Simkovic and McIntyr
e separate out the data by gender, and these rates of return reflect a rough average of the rates for the two genders. The rates of return reflect not just tuition but also other costs of attending law school, including forgone earnings. This is why the rate of return for those who pay no tuition is “only” about 30 percent.

  in excess of $1 million: See “The Best Business Schools,” Forbes, accessed October 13, 2018, www.forbes.com/business-schools/list/; Louis Lavelle, “MBA Pay: The Devil’s in the Details,” Bloomberg, November 19, 2012, www.bloomberg.com/news/articles/2012-11-19/mba-pay-the-devils-in-the-details. See also Jonathan Rodkin and Francesca Levy, “Best Business Schools 2015,” Bloomberg, accessed November 18, 2018, www.bloomberg.com/features/2015-best-business-schools.

  the fiftieth-ranked program: According to 2013 data gathered by PayScale, the twenty-year returns at Harvard were double the twenty-year returns at Texas A&M. See Anne VanderMey, “MBA Pay: Riches for Some, Not All,” Bloomberg, September 28, 2009, accessed November 18, 2018, www.bloomberg.com/news/articles/2009-09-28/mba-pay-riches-for-some-not-all. And the Forbes data show that Stanford’s five-year gains are triple the five-year gains produced by the fiftieth-ranked program. See “The Best Business Schools,” Forbes, accessed October 13, 2018, www.forbes.com/business-schools/list/. The pay drop-off begins long before rank fifty, with Harvard’s $250,000 incomes nearly 66 percent higher than number-ten-ranked Cornell’s incomes of $150,000.

  25 percent joined consulting firms: “Recruiting: MBA Students, Career Industry Statistics, Class of 2016,” Harvard Business School, accessed October 13, 2018, www.hbs.edu/recruiting/data/Pages/industry.aspx?tab=career&year=2016.

  now exceeds $75,000: See “The Best Business Schools,” Forbes, accessed October 13, 2018, www.forbes.com/business-schools/list/. See also Peter Arcidiacono, Jane Cooley, and Andrew Hussey, “The Economic Returns to an MBA,” International Economic Review 49, no. 3 (2008): 873–99. See also Jonathan P. O’Brien et al., “Does Business School Research Add Economic Value for Students?,” Academy of Management, Learning, and Education 9, no. 4 (2010): 638–51.

  “The B.A. gets you in the door”: Quoted in Nelson D. Schwartz, “Gap Widening as Top Workers Reap the Raises,” New York Times, July 24, 2015, accessed November 18, 2018, www.nytimes.com/2015/07/25/business/economy/salary-gap-widens-as-top-workers-in-specialized-fields-reap-rewards.html.

  The Right to Be Lazy: Paul Lafargue, The Right to Be Lazy, and Other Studies, trans. Charles H. Kerr (Chicago: C. H. Kerr & Company, 1907).

  Calls for a thirty-hour week: The Black-Connery bill nearly wrote a thirty-hour workweek into law. The bill, proposed in 1932 by then-senator Hugo Black, received support from both the AFL and the incoming Roosevelt administration and passed the Senate in early 1933, by a vote of 53–30, and Frances Perkins, the new secretary of labor, testified in favor of the bill before the House. Rising opposition from industry, and a change of heart at the AFL, caused President Roosevelt to pursue other New Deal programs rather than the bill, and it was eventually replaced by the Fair Labor Standards Act, which essentially enshrined the forty-hour week into federal law. See Benjamin Hunnicut, Free Time: The Forgotten American Dream (Philadelphia: Temple University Press, 2013), 117–19.

  “four-day week, four-hour day”: See Nathan Schneider, “Who Stole the Four-Hour Workday,” Vice News, December 30, 2014, accessed November 18, 2018, www.vice.com/read/who-stole-the-four-hour-workday-0000406-v21n8. See also Jon Bekken, “Arguments for a Four-Hour Day,” Libertarian Labor Review 1 (1986).

  might be possible within a century: See John Maynard Keynes, “Economic Possibilities for Our Grandchildren” (1930), in Essays in Persuasion (New York: W. W. Norton, 1963). Keynes believed that technological progress, combined with the rapid growth produced by compound interest, entailed that “the economic problem may be solved, or at least within sight of solution, within a hundred years.” It is worth nothing that Keynes’s thought on this question was not simply utopian: he worried that mankind possesses an innate drive to work and that a “dread” would set in among people confronting a surfeit of leisure. Keynes couched these thoughts in terms of human nature, but they quite possibly reflect an early internalization of the end of Veblen’s social world and the coming merger of status and extravagant industry. An excellent account of the essay appears in Elizabeth Kolbert, “No Time: How Did We Get So Busy,” New Yorker, May 26, 2014, accessed November 18, 2018, www.newyorker.com/magazine/2014/05/26/no-time. A broader philosophical reflection on the perils of acquisitiveness appears in Skidelsky and Skidelsky, How Much Is Enough?

  captivated hopeful dreamers: For an appealing introduction to this line of thought, see Thomas Frank, “David Graber: ‘Spotlight on the Financial Sector Did Make Apparent Just How Bizarrely Skewed Our Economy Is in Terms Who Gets Rewarded,’” Salon, June 1, 2014, accessed November 18, 2018, www.salon.com/2014/06/01/help_us_thomas_piketty_the_1s_sick_and_twisted_new_scheme/.

  among adults of prime working age: In 2012, 11 percent of prime-aged men and 26 percent of prime-aged women were not even seeking work. In 1992, these shares were 7 percent of men and 26 percent of women. In 1970, the shares were 4 percent of men and 50 percent of women. The Bureau of Labor Statistics predicts that both falling trends will continue. See Bureau of Labor Statistics, “Labor Force Projections to 2022: The Labor Force Participation Rate Continues to Fall,” Monthly Labor Review (December 2013), www.bls.gov/opub/mlr/2013/article/labor-force-projections-to-2022-the-labor-force-participation-rate-continues-to-fall.htm. Melinda Pitts, John Robertson, and Ellyn Terry, “Reasons for the Decline in Prime-Age Labor Force Participation,” Federal Reserve Bank of Atlanta Macroblog, April 10, 2014, http://macroblog.typepad.com/macroblog/2014/04/reasons-for-the-decline-in-prime-age-labor-force-participation-.html. See also Martin Wolf, “America’s Labor Market Is Not Working,” Financial Times, November 3, 2015. The share of U.S. prime-aged adults to have left the labor force is large, compared to advanced economies. For men, the analogous shares today are 8 percent in the United Kingdom, 7 percent in Germany and France, and 4 percent in Japan; for women, only Italy has a lower labor force participation rate among the G-7. Finally, U.S. labor force participation rates are projected to continue to decline.

  less dangerous than it once was: The Occupational Safety and Health Administration (OSHA) sets guidelines for heavy lifting and offers extensive guides detailing the proper way to lift heavy weights without leading to workplace injuries. “Materials Handling: Heavy Lifting,” Occupational Safety and Health Administration, accessed October 13, 2018, www.osha.gov/SLTC/etools/electricalcontractors/materials/heavy.html. Meanwhile, in fiscal year 2016, the Bureau of Labor Statistics documented 5,090 workplace fatalities, while in 1913 it documented approximately 23,000 industrial deaths alone. See “Number of Fatal Work Injuries by Employee Status,” Bureau of Labor Statistics, accessed October 13, 2018, www.bls.gov/charts/census-of-fatal-occupational-injuries/number-of-fatal-work-injuries-by-employee-status-self-employed-wage-salary.htm, and Centers for Disease Control and Prevention, “Achievements in Public Health, 1900–1999,” Morbidity and Mortality Weekly Report 48, no. 22 (1999): 1.

  wealthier than ever before: Median wages have stagnated, to be sure, but they have not fallen, and median consumption continues to rise. Carmen DeNavas-Walt, Bernadette Proctor, and Jessica C. Smith, Income, Poverty, and Health Insurance Coverage in the United States: 2012, U.S. Census Bureau, Current Population Reports no. P60-245 (September 2013), 5, www.census.gov/prod/2013pubs/p60-245.pdf. Meanwhile, wages at the bottom of the labor market have in fact risen slightly in recent decades, and the social safety net (inadequate as it is) continues to meet basic material needs and to protect most households from the severest absolute deprivations. Autor, Katz, and Kearney, “Trends in U.S. Wage Inequality,” 319. Once again, poverty today is between a quarter and a tenth as prevalent as it was in 1930 and between a half and a quarter as prevalent as it was in 1960. See Chapter 4.

 
imposed on women at midcentury: For prime-aged men, the labor force participation rate has fallen substantially, from roughly 96 percent in 1970 to roughly 88 percent today (the second-lowest rate of any advanced industrialized country, ahead only of Italy). See Melinda Pitts, John Robertson, and Ellyn Terry, “Reasons for the Decline in Prime-Age Labor Force Participation,” Federal Reserve Bank of Atlanta Macroblog, April 10, 2014, http://macroblog.typepad.com/macroblog/2014/04/reasons-for-the-decline-in-prime-age-labor-force-participation-.html; Nicholas Eberstadt, “Where Did All the Men Go?,” Milken Institute Review, April 28, 2017, www.milkenreview.org/articles/where-did-all-the-men-go. Hereafter cited as Eberstadt, “Where Did All the Men Go?” For prime-aged women, by contrast, the labor force participation rate rose by an almost equal amount (although from a lower baseline) between 1970 and 2000, and has fallen slightly since. See Melinda Pitts, John Robertson, and Ellyn Terry, “Reasons for the Decline in Prime-Age Labor Force Participation,” Federal Reserve Bank of Atlanta Macroblog, April 10, 2014, http://macroblog.typepad.com/macroblog/2014/04/reasons-for-the-decline-in-prime-age-labor-force-participation-.html.