The Conservative Heart

by Arthur C. Brooks

Ballooning student loan debt, an impending college bubble, and a return on the bachelor’s degree that is flat or falling: All these things scream out for entrepreneurial solutions. One idea gaining currency is the $10,000 college degree—the so-called 10K-BA—which apparently originated with a challenge to educators from Bill Gates, and which governors in Texas, Florida, and Wisconsin have begun trying to make a reality.36

  Most 10K-BA proposals rethink the costliest part of higher education—the traditional classroom teaching. Predictably, this means a reliance on online and distance learning alternatives. And just as predictably, this has stimulated antibodies to unconventional modes of learning. Critics dismiss it as an invitation to charlatans and diploma mills.

  As an editorialist in the Chronicle of Higher Education put it, “No PowerPoint presentation or elegant online lecture can make up for the surprise, the frisson, the spontaneous give-and-take of a spirited, open-ended dialogue with another person.”37 And what happens when you excise those frissons? In the words of the president of one university faculty association, “You’re going to be awarding degrees that are worthless to people.”38

  I understand the concerns, but I disagree. You see, I happen to possess a 10K-BA of my own. I got it way back in 1994. And getting that unconventional degree was the most important professional move I ever made.

  In earlier chapters I recounted how I bailed out of college to play music, and then parachuted back in during my late twenties, studying by correspondence. At the time, Ester and I had a thin-to-nonexistent bank account and no desire to start our family with a mountain of student loans. Thanks to a virtual education at Thomas Edison State College, I got my whole degree, including the thirdhand books and a sticker for the car, for about $10,000 in today’s dollars. I took the same exams as in-person students, but they were proctored at local libraries. I never met a teacher or sat in a single class.

  Did I earn a “worthless degree”? Hardly. My undergraduate years may have been bereft of “frissons,” but I wound up with a great career. I followed up my 10K-BA with a 5K-MA at a second-tier public university while continuing to work full-time. Finally, it was time to go mainstream, and I earned a standard PhD while working part-time. The final tally for a guy in his thirties helping to support his family: one bachelor’s, one master’s, one PhD, and exactly zero debt.

  My zigzag path cut a few corners, of course. There are plenty of things I missed that I could have gotten at Harvard or Princeton. But if the only option on the table had been traditional universities, I would have had absolutely no shot at higher education. My life would have turned out completely differently.

  Years after finally earning that degree, I wrote about my unconventional educational journey in the New York Times. The president of Edison read the story and called me up, offered me an honorary doctorate, and asked me to speak at the school’s commencement ceremonies in New Jersey. I jumped at the chance. It would be my first physical visit ever to my alma mater.

  I took my middle son, Carlos, along for the trip. He was thirteen at the time. To show their hospitality, the college put me up in Princeton instead of Trenton. Princeton is a wealthier, more picturesque town containing arguably the nation’s finest university.

  The next morning’s commencement ceremony in the Trenton ice hockey arena painted the starkest possible contrast to the night before. The night before, we’d seen elite America; today, hundreds of working-class adults who had worked their tails off to graduate crossed that stage. Half were minorities. Many were active military. A majority were over thirty years old.

  The mood was jubilant. One woman captured it perfectly when she stated her name and exclaimed, “I am so grateful for this day, and I want to thank my five children and the Son of the Living God!”

  These people—my fellow Edison graduates—taught Carlos a more succinct lesson than I could ever hope to. These people, whom I had never met, were the embodiment of the values my wife, Ester, and I have tried to impart. They refused to take their environment as a given. There was no privilege or elitism. There was just hope, hard work, earned success—and fierce dedication to building their own lives in their own way.

  We need to empower many more to share in that success. We need to help more Americans find affordable and meaningful ways to sharpen their talents and build better lives.

  Education reform is just the first battlefield. Once equipped with an education that gives them adequate human capital to earn their success, Americans then deserve a hopeful economic system that makes that earned success possible on the widest imaginable scale.

  Only the free enterprise system fits the bill. Conservatives can and must champion this truth without apology or compromise. For the sake of all people, our end goal must be to make free enterprise as universally accepted and nonpartisan as civil rights are today.

  We have already discussed the hope-crushing barriers to entrepreneurship for those at the bottom of America’s economy. The data for overall entrepreneurship are equally bleak: According to Gallup, in 2008, for the first time in thirty-five years, the death rate for American business was larger than the rate of new business births.39 Until then, new business start-ups had outpaced business failures by about 100,000 per year. For the past seven years, business failures have outpaced new start-ups by about 70,000 a year.

  And it’s not as if ordinary employees are making out all right and it’s only entrepreneurs who are hurting. Working-class people are still in recession, years after its technical end. The bottom 20 percent of U.S. households saw their incomes decline 7 percent, on average, from 2009 to 2013.40

  This helps explain a particularly unsettling trend. As recently as 2007, fully 70 percent of Americans were satisfied with their opportunities to get ahead by working hard; only 29 percent were dissatisfied. Today, that gap has shrunk to 54 percent satisfied and 45 percent dissatisfied.41 In just a few years, we have gone from seeing our economy as a real meritocracy to viewing it as something closer to a coin flip.

  Faced with all these terrible statistics, some politicians shove aside free enterprise solutions and reach instead for an old favorite to increase incomes—raising the minimum wage. California, New Jersey, and eleven other states recently raised their state minimum wages. The Council of the District of Columbia recently approved a massive increase from $8.25 to $11.50 that will be phased in by 2016. And in 2014, President Obama signed an executive order to raise the minimum wage to $10.10 for the individuals working on new federal service contracts, and called on Congress to raise the national minimum wage from $7.25 to $10.10 an hour. As the president put it in his 2014 State of the Union address, it’s time to “give America a raise.”

  Obviously the president’s intent is not to kill half a million jobs, but that is what the Congressional Budget Office says the proposed minimum wage hike would do. And the jobs killed would be precisely those held by the poorest and most marginalized workers with the most tenuous grip on their employment.

  Researchers at the University of California, San Diego,42 studied the effects of a series of recent hikes in the federal minimum wage that raised it from $5.15 in July 2007 to $7.25 in July 2009. Here is what they found:

  [M]inimum wage increases reduced the employment, average income, and income growth of low-skilled workers over short and medium-run time horizons . . . [and] significantly reduced the likelihood that low-skilled workers rose to what we characterize as lower middle class earnings. . . . The reduction was particularly large for low-skilled workers with relatively little education. . . . This period’s minimum wage increases may thus have made the first rung on the earnings ladder more difficult for low-skilled workers to reach.

  The simple fact is that, like most policies, minimum wage increases create winners and losers. The winners tend to be those who don’t need the help, including many second earners in middle- and upper-income households. Think of a minimum wage hike as a raise for my teenage kids. Only about 11 percent of the workers who would gain from a minimum wa
ge hike live in poor households. More than 40 percent live in households with incomes at least three times the poverty threshold.43

  Meanwhile, the losers are those who have the hardest time finding and keeping jobs: the very poor, the disabled, those who are inexperienced, and those with little education. One poignant story from Bloomberg News profiled disabled adults who loved their jobs with nonprofit contractors who perform services for the federal government.44 President Obama’s decision to raise the minimum wage for federal workers is forcing some of these marginalized men and women out of the work they treasured. For them and for untold others, minimum wage increases make the already slippery bottom rung of the labor market ladder even harder to grasp.

  As I write this, the African American teenage unemployment rate is about 33.2 percent. One in three of the black teenagers ages 16–19 who are trying to find jobs cannot find them.45 Now, imagine that someone put forward a public policy proposal that would reduce opportunity among urban minority youth even further, in order to provide pay raises for middle-class teenage children. Would you support that? Of course you wouldn’t. But that is precisely what a minimum wage increase would do.

  Some readers may object: Why would anyone propose a policy they know would kill jobs and opportunity for the poorest Americans? That doesn’t make sense. The answer is that the proponents little worry about destroying those jobs. This is partially due to disagreement on the economics, and partially because they view the safety net as a more than ample substitute for these “dead-end” jobs. Some will get welfare, others will get higher wages—everybody wins!

  But conservatives insist this is a terrible defeat for the poor. Pushing people out of work and onto the public dole is never a victory—not for our country, and certainly not for the people themselves. It is unethical to reduce entry-level job opportunities for the poorest Americans just to give a raise to those who are already slightly above them on the economic ladder. It is never right to deny people at the bottom the opportunity to gain the initial work experience they need to become attractive to employers, transition into higher-paying jobs, and build a better future for their families.

  I’m going to go out on a limb and guess that many of the people reading this book, like me and my wife, have worked a minimum wage job at some point. What did we get from it? We learned how to show up for work on time, give it our best, get along with others, take directions, and create value with our time and effort. If those lessons were good enough for us, why would we deny them to the poor?

  Many years ago, I was sitting on an airplane when a fellow traveler started a conversation. As an economist, I am really interested in what people do all day in their jobs, so I asked him how he made a living. He was the chief financial officer for a company that owns hundreds of fast-food restaurants. I didn’t know anything about fast food, so I began asking him all sorts of questions about supply chain management and other things that would only interest an economist like me.

  But then I made a big mistake. Offhandedly, I asked him, “Do you ever feel bad creating a lot of dead-end jobs?” His face turned a little red and I realized I had screwed up, so I immediately apologized. His response was something I will never forget.

  “Let me explain something,” he began. “If you work at one of our restaurants and you show up to work and you don’t get in a fight or come to work high on drugs, you will probably be promoted within a year to assistant manager. You’ll be able to support your family. If you work here for four years, and you do a good job, you will be a store manager making a comfortable salary. And if you work hard enough and you get a little lucky and you stick with it, you might even be like me—because I started out flipping burgers on the line.”

  There are no dead-end jobs in this country. There is dead-end government, perhaps. There is dead-end culture a lot of the time. But there are no dead-end jobs. Remember, conservatives believe that all work is a blessing, whether it makes you rich or not. That is why we recoil at the idea of destroying jobs, moving people onto public assistance, and calling that a victory.

  But while minimum wage jobs may have plenty of dignity, it remains true that they sometimes don’t pay enough for someone to support a family. This is a real problem in many cases, and we shouldn’t pretend it isn’t. Conservatives need a solution to that problem that works with markets and for vulnerable people.

  Here’s one idea: Conservatives can champion an expansion of the Earned Income Tax Credit (EITC). The EITC is a wage subsidy administered through the tax system that has lifted millions of people out of poverty. It rewards work and helps ensure that those at the bottom can take care of their families without living in poverty. Following the eternal principle of free enterprise, people make more when they work more.

  The same University of California study that showed how minimum wage hikes reduce employment and income growth at the bottom also found that the EITC had the opposite effect. “[A]nalyses of the EITC,” the scholars wrote, “have found it to increase both the employment of low-skilled adults and the incomes available to their families.”

  The EITC is the most powerful pro-work, antipoverty measure currently in America’s economic policy arsenal. But today, the EITC is far more generous to households with children than those without. A childless worker could get about $500 from the EITC in 2014, while a worker with three or more children could get more than $6,000. If we want to create hope for younger workers without children, and help them gain experience to put them on the path to self-reliance, we should expand the EITC to benefit them as well.

  We cannot stop there, of course. We must also help create hope for the million-plus Americans facing long-term unemployment. These Americans, who are the worst victims of the Great Recession, are caught in a vicious cycle. The longer they remain unemployed, the harder it is for them to find a job, as their increasingly lengthy jobless spells make them increasingly unattractive to employers.

  One reason for chronic unemployment is the mismatch between employees and available jobs. Employers in some places like North Dakota (where unemployment currently sits beneath 3 percent) are desperate for workers, while workers are languishing in places like Atlantic City, New Jersey (11.3 percent unemployment), or Fresno, California (11 percent).46

  My AEI colleague Michael Strain has suggested creating relocation vouchers for these long-term unemployed. The government could help cover costs for chronically unemployed Americans to move to areas with more plentiful opportunities. Once again, this is an example of government working with labor markets, not against them.

  Obviously, not everyone will pick up and move, however generous the subsidy. But at a time when economic conditions vary wildly between regions, the opportunity is a powerful one. Relocation assistance might well offer some the spark they need to begin rebuilding their résumés—and their lives. Further, there is nothing more uniquely American than migration in search of opportunity.

  We started out the chapter with the story of Jestina Clayton. Unfortunately, that is not the entrepreneurship story we ordinarily hear from conservative leaders today.

  When you listen to conservative politicians on the campaign trail, you’ll hear them extolling the virtues of entrepreneurs. But it too often goes something like this: “I met a guy who started off with kind of a rough life in a bad part of town. He didn’t have any money; he dropped out of school. But he decided he wanted to open a muffler shop. So he borrowed a little bit of money and the most important thing is he worked hard and day after day, month after month he stuck at it. And now he owns hundreds of muffler shops.

  “Heck, he’s a billionaire!”

  That’s great. Good for the muffler billionaire. But that’s not the primary story we should be telling. Our movement should be focusing not on the people who make it to great wealth, but rather about those who never get rich—but thrive by lifting themselves up out of poverty, building their lives, supporting their families, and understanding their true purpose. That’s the essence of American en
trepreneurship. Real entrepreneurship is following in the footsteps of Jestina Clayton and approaching your own life as an exciting project, whether you get rich or not.

  That is the hope that brought our ancestors to this country. Most immigrants didn’t come here with dreams of becoming billionaires. They came here because they did not want to be held down because of where they were born, or their last name, or their religion, or the color of their skin. They wanted to be judged by what they could do with their hard work and merit. They wanted fairness—not redistributive equality, but real fairness. Not equality of income, but abundance of opportunity. They just wanted a little conservative social justice.

  Conservatives need to be warriors for real fairness, which means we have to fight for real entrepreneurship. We need to fight for the policies and culture that will reverse troubling mobility trends. We need schools that serve children’s lives instead of adults’ job security. We need to create hope by encouraging job creation for the most marginalized, and declare war on barriers to entrepreneurship at all levels. And we need to revive our moral appreciation for the cultural elements of earned success.

  A HAPPY FIGHT FOR SOCIAL JUSTICE

  Our nation has a great deal of need that goes unmet. This is only exacerbated by years of misguided policies and a materialistic culture. The social justice agenda outlined above can restart us on a path toward our best selves and toward our privilege to help the vulnerable.

  It is an agenda that promotes values, help, and hope. It means defending a culture of faith, family, community, and work; increasing our charity and protecting the safety net for the truly needy; and fighting for education reform, job creation, and free enterprise as profound moral imperatives. It is an agenda built on a fundamental belief that the best welfare program is a stable family life and a real job.

  This agenda will do the most good for the most people—and it will revive the conservative movement. It will allow us to transform the right from a minority that fights against things into a majoritarian social movement that fights for people and champions true social justice with authentically conservative policies.