Sunday, February 17, 2013

The Stiglitz Plan for Engineering Mobility

Joseph E. Stiglitz
In the review section of the Sunday New York Times, the economist and Nobel Laureate Joseph E.Stiglitz remarks that “study after study has exposed the myth that America is a land of opportunity.” We do not have equal opportunity in this country, he argues, because the probabilities for upward mobility vary among individuals starting life in different socioeconomic levels. He points out that only (his word choice) 58 percent of Americans born into the bottom fifth of income earners move out of that category and just 6 percent move from the bottom fifth to the top. This is less mobility than is found in most of Europe (without giving specific examples) and all of Scandinavia. This state of affairs can be reversed by federal intervention. Washington should make sure that all mothers are not exposed to health hazards and that they get prenatal care. The government should put more money into preschool, and provide all children with adequate health care.  On this last, the federal government should not only provide resources to parents, it should “incentivize parents, by coaching or training them, or even rewarding them for being good caregivers.”  It should give more money to poor schools and offer summer and extracurricular programs to poor students.  Finally, the federal government should make higher education more affordable, perhaps by an income-contingent loan program like Australia’s or perhaps by providing the free universal higher education Stiglitz identifies as the European system.
As one considers this argument, the first point to recognize is that the phrase “land of opportunity” can mean at least two different things. Historically, it has meant that there are no laws or official barriers preventing individuals from pursuing their own goals, whatever those goals may be. If one accepts this definition, then it would be entirely reasonable to respond that there is no “myth” at all.  The second meaning would be the one that Stiglitz accepts, apparently with less reflection than one would expect of a Nobel Laureate. This is that opportunity should be measured by statistical outcomes. Even if one accepts this definition, though, one might conclude that Stiglitz is engaging in hyperbole. He says, for example, that only 58 percent of those born in the bottom fifth move up. This means that a clear majority of those born at the bottom of our socioeconomic scale do achieve significant upward mobility. Moreover, by his estimates, one of every sixteen people born in the bottom quintile ends up in the top.  While that is certainly far from complete fluidity, it would seem to me to suggest that there is not just “some” upward mobility, but a pretty fair amount.
Since he doesn’t cite figures for Europe or say whether he is comparing us to Europe as a whole (including Southern Europe) or across specific countries, it is hard to know exactly what his basis of comparison is. It certainly does not make sense to compare a society as large and varied as the United States to the relatively small and still mostly demographically homogenous Scandinavian nations.
I do think it is probably the case that there is less mobility in the United States today than there was in the decades immediately following World War II.  Mobility in the post-war period, though, was a consequence of structural change in our economy driven by worldwide demand for American industrial products and an accompanying expansion of managerial and professional jobs. There were more places at the top for people to move into. Without that kind of massive structural mobility, a lot of people can move up only if a lot of people move down. Given that most families in the top fifth of earners sensibly and justifiably dedicate their efforts to ensuring that their own children do not experience downward mobility, I think it is impressive that one out of every sixteen individual born in the bottom layer is able to move to the top.
Early childhood education may be a good idea. Healthy neighborhoods are definitely good. But we should think very carefully about whether these are matters that citizens should resolve through their local administrations and associations or whether it would be a good idea to let the central government decide these matters for us through regulation.  On the issue of pre-school, we might want to reflect that the benefits of Project Head Start, a federal pre-K program that has now existed for almost fifty years, have been highly dubious and that it does not appear to have had much of an impact on the mobility statistics.
The suggestion that the federal government start “coaching or training” parents is more than a little creepy.  The anthropologist Lionel Tiger (a great name, but a real one) coined the term “bureaugamy” to describe the state of affairs in which government bureaucracy had essentially become the equivalent of a bread-winning spouse in low-income families.  Stiglitz’s suggestion would complete this process by making government a full-fledged and even dominant partner in the rearing of children.  This could make low-income children ultimately even more dependent on the government-parent and actually end up decreasing statistical upward mobility. Regardless of the outcome, though, we should ask ourselves whether we want the nationalization of children.
I certainly agree that higher education should not be as absurdly expensive as it is in the United States today. Arguably, though, demand-side subsidies for higher education have been one of the forces driving tuition costs up.  Stiglitz’s reference to “the near-free higher education system in Europe” struck me as extremely odd. The European Union has achieved uniformity on a few things, but higher education is not one of them. Each European country has its own system. Some of them that do provide near-free tertiary schooling, moreover, don’t do so for everyone who wants to study anything, but have highly tracked designs that direct people into industrial trades or university studies. This approach may have its positive side, but it certainly is not a prescription for social mobility.

Thursday, February 7, 2013

Another Affirmative Action Case for the Supreme Court

Michigan Attorney General Bill Schuette
The Chronicle of Higher Education notes that the U.S. Supreme Court is being urged to take up Michigan Attorney General Bill Schuette’s appeal of a Sixth Circuit Court of Appeals decision that ruled a voter-supported state constitutional ban on racial preferences in higher education unconstitutional last November. Affirmative action advocates also want the Supreme Court to take up the decision, hoping it will produce a ruling against all propositions to end affirmative action across the nation.
The narrow 8-7 Sixth Circuit decision was based on the idea that there are many sorts of preferences in college admissions.  Universities may choose to show preference for students who will contribute to athletic programs, to children of alumni, or to dependents of faculty. In singling out racial preferences, the mandate placed a burden on those who received preferences because of race. The mandate did not ban legacy admissions or special consideration of athletes. While legacy and other applicants could simply lobby an admissions office to favor children of alumni, minority applicants seeking racial preferences would need to mount a campaign to change the state constitution.Therefore, according to the federal court, the ban places a heavier legal burden on one form of preference among many, and thereby treats the beneficiaries of race-based policies differently from the beneficiaries of legacies. The Sixth Circuit ruled that this differential treatment was a violation of the Equal Protection Clause of the Fourteenth Amendment.
One big problem with this reasoning is that the Supreme Court has consistently indicated that racial preferences do not constitute one preference among many. In the majority opinion for the 2003 Grutter v. Bollinger decision, Justice O’Connor approvingly quoted the 1984 Palmore v. Sidoti decision when she wrote “we are mindful, however that ‘[a] core purpose of the Fourteenth Amendment was to do away with all governmentally imposed discrimination based on race.’” I do not think that anyone has ever suggested that the Fourteenth Amendment contemplating eliminating legacies or athletic admissions. Justice O’Connor wrote further that “racial classifications, however compelling, are potentially so dangerous that they may be employed no more broadly than the interest demands.”
Given what seems to be a glaring contradiction between the Sixth Circuit view of racial preferences as one kind of preference among many and the Supreme Court view of racial preferences as an especially dangerous practice and as a fundamental target of the Fourteenth Amendment, I speculate that if the Court takes this up, it will strike down the Sixth Circuit decision.