Wednesday, September 12, 2012

Upward Mobility in America? Maybe Not.

Inspired by old Horatio Alger tales, Americans tell themselves that anyone can work hard and succeed here. But is that true? 

One of the most important policy questions for the United States is whether young people from less-privileged backgrounds have the opportunity to go to college. All they need is pluck and determination. But is that true? 

Looking globally, Americans also think that upward mobility is more common here than in old Europe, which traps people in dependency on government welfare states. Americans tend to think that the European countries have static class systems that keep people in their place, while we have an open system that allows people to rise or fall based on individual accomplishments. But is that true?

Maybe not. A recent report on education from the Organization for Economic Cooperation and Development (OECD), which is basically an international club of rich country governments, suggests that the United States lags behind other wealthy countries in educational opportunities for mobility. 

Consider the following striking chart from the OECD education report (on page 102 in the original PDF).

This is a complex graphic, so here's the official OECD explanation for how to read it:
The chart shows the odds of someone from a low educational background attending higher education. The odds ratio is calculated by comparing the proportion of parents with low levels of education in the total parent population to the proportion of students in higher education whose parents have low levels of education. Taking the results for the United Kingdom as an example: 25% of all students in tertiary education have parents with low levels of education (light blue bar), while 42% of the parent population have a low levels of education (dark blue bar). This results in an odds ratio of 0.61 (dark triangle). If young people from a low educational background in the United Kingdom were as likely to attend higher education as those from more educated families, 42% of the student population would come from low educational backgrounds, giving an odds ratio equal to 1  (p. 102).
Now let's look at the United States (on the far right hand side of the chart). Roughly 18% of the population of parents in the United States has a low level of education (defined as not completing high school). But only a tiny percentage of this group's kids--kids who are now between the ages of 25 and 34--have gone on to participate in higher education. Now, in fairness, the report adds a note that Australia, Canada, New Zealand, and the US may be under-reporting their numbers, so they could be skewed low. We should also look at historical trends.

But the larger point remains, and the numbers reinforce common sense: in the United States, if your parents dropped out of high school, it is highly unlikely that you'll go on to college. 

And we're not even talking about completion of a degree program (whether a two-year associate's or  bachelor's). Even if a child of high school dropouts starts college, it is unlikely that he or she will finish. Across the whole OECD, an average of only 20% of the kids of high school dropouts ever get a post-secondary degree, and the US, Italy, Portugal, and Turkey fall well below this average. In fact, according to the report, over forty percent of the current batch of children of high school dropouts (currently aged 25-34), in both the US and those other three countries, haven't even completed high school themselves!

From firsthand experience at universities like my own, faculty and staff know that many "first-generation college students" (which includes children parents who have finished high school and/or completed some college classes) struggle to figure out how to navigate the system and graduate within six years. 

Responding to these concerns, the Gates Foundation recently funded a website that focuses on college completion. The idea is to figure out who is doing well and who is doing poorly at getting their students to finish with a degree. If completion is the goal, why not focus on measuring it?

Imagine yourself as a poor American kid from the country or from the city whose parents dropped out of high school. You hear people telling you to work hard. But you're in a school system that lacks resources or in a family that is struggling to get by. You can succeed, but only against a host of sociocultural forces working against you. You don't Horatio Alger tales; you need major support.

The contentious debate over "education reform" is driven partly by a desire to help kids like this, partly by a desire to promote justice and equal opportunity, and partly by a desire to gain economic competitiveness in an age of fierce competition and globalization. 

No matter the motivation, Americans have a lot of work to do in making the rhetoric of upward mobility a reality. 

Tuesday, September 4, 2012

The Outsourcing of Labor and Dis-Integration of Production

Yesterday was Labor Day--a great time to pause and think about how work has changed from the good old days of unions and posh benefits. Outsourcing and global production have undermined corporations and workers alike. But they empower those who can take advantage of the new game.

The extreme edge of this new game can be understood in a provocative thought experiment posed by professor Gerald Davis of the University of Michigan Business School in a recent conference paper (thanks to this New York Times blog for first alerting me to the paper). Professor Davis imagined how you could create a killer new iPhone app called "Remote Drone Assassin" along with actual drones that you could sell to mercenary companies, "without leaving your couch."

First, he wrote, you could go to the Plug and Play Tech Center and rent a  desk and fancy mailing address. (Why bother with a real corporate HQ?)

Second, you could "incorporate online in Liberia for $713.50" through the Liberian Registry site. (Who needs lawyers in Delaware?)

Third, you could fund your idea through the crowdsourcing site Kickstarter. (Who needs venture capital anymore?)

Fourth, you could hire programmers to actually design your software app through ODesk, "the world's largest and fastest-growing online workplace." (Who needs to hire people you even know?)

Next, you could hire a low-cost Chinese manufacturer to make your drones through (Who needs to make it at home?)

If you don't want to sell through the Apple Store or Amazon, you could arrange payment through Square, which allows you to charge credit cards through your iPhone or iPad. (Who needs to work directly with the credit card companies?)

Finally, when it comes time to ship the goods to the mercenary company, you could use Shipwire. (Why bother with the biggies like UPS or FedEx?)

You never left your couch, and you managed to employ a bunch of subcontractors to bring your drone and its app to market. Still, what have you actually contributed to the US or world economy? Did you actually work? You never left your couch.

An extreme scenario, perhaps, but it illustrates the loss of the ideal of craftsmanship--the satisfaction of being involved in the whole of a process, from beginning to end (a key theme in chapter 5 of my book). Professor Davis' scenario also helps us understand the puzzle of the jobless recovery. Profits and economic growth occur all along the way, but no U.S. workers are employed. Except for maybe one couch potato.

Thankfully, this is an absurd extreme, but it does suggest that if we are not careful we may outsource ourselves to death.