The Meritocracy Trap

by Daniel Markovits

  India, Morocco, Indonesia, Iran, Ukraine, and Vietnam: Recent Gini Index figures for these countries are: the United States, 41.5 (2016); India, 35.1 (2011); Morocco, 39.2 (2006); Indonesia, 39.5 (2013); Iran, 38.8 (2014); Ukraine, 25.0 (2016); Vietnam, 34.8 (2014). See World Bank, Development Research Group, “GINI index (World Bank estimate),” World Bank Group, 2018, accessed June 13, 2018, http://databank.worldbank.org/data/reports.aspx?source=2&series=SI.POV.GINI&country=, and http://data.worldbank.org/indicator/SI.POV.GINI.

  Bangkok, Thailand: The U.S. Census Bureau’s American Community Survey estimates that Fairfield County had a Gini coefficient of 53.52 in 2011. Bangkok’s Gini coefficient that year, as reported by the UN, was 40.0. See U.S. Census Bureau, “2007–2011 American Community Survey,” accessed June 13, 2018, https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml, and United Nations Human Settlements Programme, Urbanization and Development: Emerging Futures, World Cities Report 2016 (2016), accessed June 13, 2018, 206–7, Table C.1, http://wcr.unhabitat.org/wp-content/uploads/2017/02/WCR-2016-Full-Report.pdf.

  render it increasingly indispensable: See Stephen M. Hedrick, “The Acquired Immune System: A Vantage from Beneath,” Immunity 21, no. 5 (2004): 607–15, accessed June 13, 2018, www.sciencedirect.com/science/article/pii/S1074761304003073?via%3Dihub. “By selecting for evermore-devious parasites [superordinate workers], the immune system [snowball inequality] is the cause of its own necessity.” John Fabian Witt proposed this analogy.

  seem necessary, natural, and inevitable: See Chapter 8.

  tyranny of no alternatives: See Roberto Mangabeira Unger, The Left Alternative (London: Verso, 2009), 1.

  both the left and the right: On the left, this view appears in some of the outwardly directed, public-facing arguments presented by the Occupy Wall Street movement. (Internally, Occupy embraced a radically egalitarian, participatory form of collective life, which came much nearer to rejecting meritocracy than the movement’s outward expression acknowledged.) On the right, the view appears in certain strands of Trumpism. (Other strands take a much more elitist, and even oligarchic line.)

  intelligence or academic ability: See, e.g., Lani Guinier, The Tyranny of the Meritocracy (Boston: Beacon, 2015), 21, and Richard D. Kahlenberg, “Affirmative Action for the Rich,” New York Times, May 10, 2013, accessed June 14, 2018, www.nytimes.com/roomfordebate/2011/11/13/why-do-top-schools-still-take-legacy-applicants/affirmative-action-for-the-rich .

  skill or talent: See, e.g., Lauren Rivera, Pedigree: How Elite Students Get Elite Jobs (Princeton, NJ: Princeton University Press, 2015), 15–25. Hereafter cited as Rivera, Pedigree. See also Bourree Lam, “Recruitment, Resumes, Interviews: How the Hiring Process Favors Elites,” Atlantic, May 27, 2015, accessed June 14, 2018, www.theatlantic.com/business/archive/2015/05/recruitment-resumes-interviews-how-the-hiring-process-favors-elites/394166/ [inactive].

  outright fraud: See, e.g., Russell Sobel, “Crony Capitalism Pays Well for Rent-Seeking CEOs,” Investor’s Business Daily, July 9, 2014, accessed June 14, 2018, www.investors.com/politics/commentary/political-activity-and-connections-dont-make-business-profitable/.

  a rising oligarchy: See Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Belknap Press of Harvard University Press, 2014). Hereafter cited as Piketty, Capital.

  denounce real targets: In addition to Piketty’s work, canonical accounts along these lines include Joseph E. Stiglitz, The Price of Inequality (New York: W. W. Norton, 2012), and Anthony B. Atkinson, Inequality: What Can Be Done? (Cambridge, MA: Harvard University Press, 2015).

  good-faith judgments of merit: See Chapter 5.

  even without nepotism: See Chapter 5.

  legacy preference declines: See Thomas J. Espenshade, Chang Y. Chung, and Joan L. Walling, “Admission Preferences for Minority Students, Athletes, and Legacies at Elite Universities,” Social Science Quarterly 85, no. 5 (December 2004): 1422–46, 1443, Figure 1. See also Douglas S. Massey and Margarita Mooney, “The Effects of America’s Three Affirmative Action Programs on Academic Performance,” Social Problems 54, no. 1 (2007): 99–117, 100 (“The only comprehensive study of all [preferential admissions] that has sought to control for variation in qualifications is that of Espenshade and associates (2004).”)

  the entire bottom half: See Chapter 5.

  was betting against them: Goldman Sachs’s ABACUS Flipbook is available on the webpage of the director of financial mathematics at NYU’s Courant Institute of Mathematical Sciences. See ACA Management, LLC, ABACUS 2007-AC1, February 26, 2007, accessed June 19, 2018, www.math.nyu.edu/faculty/avellane/ABACUS.pdf. For more on the ABACUS deal, see Louise Story and Gretchen Morgenson, “S.E.C. Accuses Goldman of Fraud in Housing Deal,” New York Times, April 16, 2010, accessed June 19, 2018, www.nytimes.com/2010/04/17/business/17goldman.html; Dan Wilchins, Karen Brettell, and Richard Change, “Factbox: How Goldman’s ABACUS Deal Worked,” Reuters, April 16, 2010, accessed January 27, 2019, www.reuters.com/article/us-goldmansachs-abacus-factbox/factbox-how-goldmans-abacus-deal-worked-idUSTRE63F5CZ20100416; Securities and Exchange Commission, “Goldman Sachs to Pay Record $550 Million to Settle SEC Charges Related to Subprime Mortgage CDO,” July 15, 2010, accessed January 27, 2019, www.sec.gov/news/press/2010/2010-123.htm; and Michael A. Santoro and Ronald J. Strauss, Wall Street Values: Business Ethics and the Global Financial Crisis (Cambridge: Cambridge University Press, 2012), 116–17, 134–36.

  Goldman’s total earnings: For 2015, Goldman Sachs reported net earnings of $6.08 billion, net revenues of $33.82 billion, and average global core liquid assets of $199 billion. For 2016, the company reported net earnings of $7.40 billion, net revenues of $30.61 billion, and average global core liquid assets of $226 billion. For 2017, net earnings were $4.29 billion, net revenues were $32.07 billion, and global core liquid assets averaged $211 billion. The Goldman Sachs Group, Inc., Annual Earnings Press Releases, January 20, 2016; January 18, 2017; January 17, 2018, accessed June 19, 2018, www.goldmansachs.com/media-relations/press-releases-and-comments/archive/index.html.

  amount to trillions: See Chapter 4.

  performance-related pay: See Chapter 4.

  exploding wages for superordinate workers: See Chapter 4.

  three hundred times as much today: In 1965, a typical American large-firm CEO earned about twenty times the income of the average production worker; in 2014, the CEO of a comparable company took home about three hundred times as much as the average production worker. Lawrence Mishel and Alyssa Davis, Top CEOs Make 300 Times More Than Typical Workers: Pay Growth Surpasses Stock Gains and Wage Growth of Top 0.1 Percent (Washington, DC: Economic Policy Institute, 2015), accessed June 21, 2018, www.epi.org/publication/top-ceos-make-300-times-more-than-workers-pay-growth-surpasses-market-gains-and-the-rest-of-the-0-1-percent/.

  A cardiologist earned: Private-duty nurses charged between $14 and $27.50 per day in 1965. Office nurses reported average monthly salaries between $350 and $397 in 1964. The average annual salary for a public health nurse employed by a local government was $5,313 in 1964.

  Data on doctors’ incomes by specialty are not available for the mid-1960s, but medical school graduates employed by the federal government in 1965 received annual starting salaries between $10,420 and $12,075—four times the salary of a government-employed nurse—and the net income of doctors in private practice overall averaged about $19,000 in 1963. See U.S. Department of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook 1966–67, 117–25, accessed June 21, 2018, https://fraser.stlouisfed.org/files/docs/publications/bls/bls_1450_1965_1.pdf.

  more than seven times as much in 2017: In 2017, the median annual salary for a registered nurse was $70,000. See U.S. Department of Labor, Bureau of Labor Statistics, “Registered Nurses,” Occupational Outlook Handbook, last updated April 13, 2018, accessed June 21, 2018, www.bls.gov/ooh/healthcare/registered-nurses.htm. The average salary for a male cardio
logist exceeds $500,000. See Reshma Jagsi et al., “Work Activities and Compensation of Male and Female Cardiologists,” Journal of the American College of Cardiology 67, no. 5 (2016): 535.

  less than five times: According to the Occupational Outlook Handbook published by the Bureau of Labor Statistics (BLS), the average secretary (across all types of firms) made $99.50 per week, or roughly $5,000 per year, in 1963–64. See U.S. Department of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook 1966–67, 283, accessed June 21, 2018, https://fraser.stlouisfed.org/files/docs/publications/bls/bls_1450_1965_2.pdf. According to the BLS’s 1965 National Survey of Professional, Administrative, Technical, and Clerical Pay, attorneys in the highest earning bracket had average annual salaries of $24,804. See U.S. Department of Labor, Bureau of Labor Statistics, National Survey of Professional, Administrative, Technical, and Clerical Pay 1965, 16, accessed June 21, 2018, https://fraser.stlouisfed.org/content/?item_id=498147&filepath=/files/docs/publications/bls/bls_1469_1965.pdf.

  forty times as much today: According to the BLS’s Occupational Outlook Handbook for 2018, the median annual salary for a secretary or administrative assistant was $37,870. See U.S. Department of Labor, Bureau of Labor Statistics, “Secretaries and Administrative Assistants,” Occupational Outlook Handbook, last updated April 13, 2018, accessed June 21, 2018, www.bls.gov/ooh/office-and-administrative-support/secretaries-and-administrative-assistants.htm. The average profits per partner among firms in the American Lawyer’s top one hundred firms (ranked by gross revenues) was $1.55 million. See “The AmLaw 100: A Special Section,” American Lawyer (May 2015), 92–93, www.siia.net/archive/neals/2016/filez/442072/688_1732_442072_e9f58ffe-510d-40fb-9133-5863e7854558_82357_3_1.pdf.

  David Rockefeller received: Rockefeller’s salary was typical for the time. Rudolph Peterson made roughly a base salary of $137,500 plus $37,500 in deferred compensation as CEO of Bank of America in 1963; Thomas Gates made roughly $267,250 as chairman of the Morgan Guaranty Trust Company in 1968; and Walter Wriston was paid $128,139 as chairman and CEO of Citibank in 1967. See Nomi Prins, All the Presidents’ Bankers: The Hidden Alliances That Drive American Power (New York: Nation Books, 2014), 271–72. Bank tellers’ earnings ranged from $45 to $150 per week in 1964, depending on the metropolitan areas in which they worked. See U.S. Department of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook 1966–67, 618, accessed June 21, 2018, https://fraser.stlouisfed.org/files/docs/publications/bls/bls_1450_1965_4.pdf.

  Last year Jamie Dimon: Dimon was paid $29.5 million in total compensation for his work in 2017. See Anders Melin, Hugh Son, and Jenn Zhao, “JPMorgan Boosts Dimon’s Pay 5.4% to $29.5 Million for 2017,” Bloomberg, January 18, 2018, accessed June 21, 2018, www.bloomberg.com/news/articles/2018-01-18/jpmorgan-boosts-dimon-s-pay-5-4-to-29-5-million-for-last-year. For that same year, the median annual pay for a bank teller was $28,110. See U.S. Department of Labor, Bureau of Labor Statistics, “Tellers,” Occupational Outlook Handbook, last updated April 13, 2018, accessed June 21, 2018, www.bls.gov/ooh/office-and-administrative-support/tellers.htm.

  All told, nearly a million: See Chapter 4.

  over middle-class workers: See Chapter 4.

  Chapter Two: The Harms of Meritocracy

  Median incomes nearly doubled: See Chapter 4.

  richer than their parents: A child born in 1940 to median-income parents had a 93 percent chance of earning more than her parents. A child born to median-income parents in 1980 had a 45 percent chance of earning more than her parents. See Raj Chetty et al., “The Fading American Dream: Trends in Absolute Mobility Since 1940,” Science 356, no. 6336 (April 2017): 398–406.

  $40,000 a year today: Anonymous resident in conversation with the author, St. Clair Shores, Michigan, May 2018.

  Shore Club Highrise Apartments: “Groundbreaking Today: 750 Apartments in Shores Project,” Detroit Free Press, July 31, 1962, A3, and Proctor Homer Warren, Inc., “With Every Great Apartment and Sky House, We’ll Throw in a Great Lake Free,” advertisement, Detroit Free Press, November 19, 1970. The building is visible from Detroit and is so prominent that city residents call it 9 Mile Tower.

  The Affluent Society: See John Kenneth Galbraith, The Affluent Society (Boston: Houghton Mifflin, 1958). Hereafter cited as Galbraith, The Affluent Society.

  matches the national median: Median annual family income in St. Clair Shores is $69,878, according to 2012–2016 U.S. Census Bureau estimates. The national median is $67,871. Median annual household income in St. Clair Shores is an estimated $54,590; the national median is $55,322. See U.S. Census Bureau, 2012–2016 American Community Survey 5-Year Estimates, Selected Economic Characteristics, United States and St. Clair Shores city, Michigan, accessed June 21, 2018, www.census.gov/programs-surveys/acs/.

  triples the poverty threshold: Average household size in St. Clair Shores is between two and three residents. The 2016 poverty threshold for an average three-person family was $19,105, less than one-third of St. Clair Shores’ median family income. See U.S. Census Bureau, 2012–2016 American Community Survey 5-Year Estimates, Selected Social Characteristics in the United States, St. Clair Shores city, Michigan, accessed June 21, 2018, www.census.gov/programs-surveys/acs/, and U.S. Census Bureau, Poverty Thresholds for 2016 by Size of Family and Number of Children, accessed June 21, 2018, www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html.

  falls below the nationwide rate: The national poverty rate is 15.1 percent for all people and 11.0 percent for families. The rate in St. Clair Shores is 9.1 percent for all people and 6.4 percent for families. See U.S. Census Bureau, 2012–2016 American Community Survey 5-Year Estimates, Selected Economic Characteristics, United States and St. Clair Shores city, Michigan, accessed June 21, 2018, www.census.gov/programs-surveys/acs/.

  eleven hundred square feet: Over half of the 144 single-family homes for sale on Zillow in St. Clair Shores in mid-June 2018 were between 1,000 and 1,500 square feet and over two-thirds are three-bedroom homes. Zillow, accessed June 21, 2018, www.zillow.com/homes/for_sale/Saint-Clair-Shores-MI/. The nationwide median new single-family house sold in 2017 was 2,457 square feet. See U.S. Census Bureau, Highlights of Annual 2017 Characteristics of New Housing, accessed June 23, 2018, www.census.gov/construction/chars/highlights.html.

  issuing citations: Anonymous residents in conversation with the author, St. Clair Shores, Michigan, May 2018. One resident reported getting a ticket from the town for flaking paint; she said it would do the same for a sagging roof, an uneven sidewalk, or failure to remove snow. A couple reported that their elderly neighbor was cited for feeding the birds.

  boards, commissions, and committees: There are currently thirty-two volunteer organizations listed in the St. Clair Shores Boards, Commissions & Committees Handbook, including an Activities Committee, an Ethics Committee, and a Dog Park Committee. Boards, Commissions & Committees Handbook, 2000, rev. 2012, accessed June 23, 2018, www.scsmi.net/DocumentCenter/View/11/Boards-and-Commissions-Committees?bidId= [inactive].

  largest Memorial Day parade in Michigan: Anonymous resident in conversation with the author, St. Clair Shores, Michigan, May 3, 2018. See also Mitch Hotts, “Olympic Figure Skater Nancy Kerrigan to Appear at St. Clair Shores Memorial Day Parade,” Macomb Daily, May 2, 2018, accessed June 23, 2018, www.macombdaily.com/general-news/20180502/olympic-figure-skater-nancy-kerrigan-to-appear-at-st-clair-shores-memorial-day-parade.

  down Harper Avenue: See Mitch Hotts, “Harper Charity Cruise Ready to Roll Down the Avenue,” Macomb Daily, August 29, 2016, accessed June 23, 2018, www.macombdaily.com/article/MD/20160829/NEWS/160829618 [inactive].

  still dominate the town: Anonymous residents in conversation with the author, St. Clair Shores, Michigan, May 3, 2018.

  the largest municipal bankruptcy: See Monica Davey and Mary Williams Walsh, “Billions in Debt, Detroit Tumbles into Insolvency,” New York Times, July 18, 2013, accessed Ju
ne 23, 2018, www.nytimes.com/2013/07/19/us/detroit-files-for-bankruptcy.html.

  Fewer than a quarter: According to 2016 estimates, 24.4 percent of St. Clair Shores residents twenty-five years old or older have finished a bachelor’s degree compared to 30.0 percent nationally, and 8.3 percent have finished a graduate or professional degree compared to 11.5 percent nationally. U.S. Census Bureau, 2012–2016 American Community Survey 5-Year Estimates, Educational Attainment, United States and St. Clair Shores city, Michigan, accessed June 28, 2018, https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_16_5YR_S1501&src=pt.

  outside the top 1 percent: Anonymous resident in conversation with the author, St. Clair Shores, Michigan, May 3, 2018. According to the IRS’s Statistics of Income Bulletin for Winter 2018, the minimum adjusted gross income for top 1 percent tax returns in tax year 2015 was $480,930. See Adrian Dungan, “Individual Income Tax Shares, 2015,” IRS Statistics of Income Bulletin, Winter 2018, accessed June 28, 2018, www.irs.gov/pub/irs-soi/soi-a-ints-id1801.pdf.

  Gilbert’s Lodge: “Menu,” Gilbert’s Lodge, accessed June 28, 2018, www.gilbertslodge.com/menu/0/menus.aspx.

  “people going to Gilbert’s”: Anonymous resident in conversation with the author, Gilbert’s Lodge, St. Clair Shores, Michigan, May 2, 2018.

  When Gilbert’s burned down: Anonymous resident in conversation with the author, Gilbert’s Lodge, St. Clair Shores, Michigan, May 2, 2018. See also Mitch Hotts, “Gilbert’s Lodge Re-opens After Two Fires,” Macomb Daily, July 9, 2014, accessed June 28, 2018, www.macombdaily.com/article/MD/20140709/NEWS/140709659 [inactive].

  reupholstered a few years ago: In 2002, the library had 24 full- and part-time employees. See City of St. Clair Shores, Michigan, Comprehensive Annual Financial Report with Supplemental Information Prepared by the Department of Finance for the Fiscal Year Ended June 30, 2006 (St. Clair Shores, MI: 2006), 108. By 2018, the library’s staff had fallen to 16.5 full- and part-time employees. See City of St. Clair Shores, Michigan, Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018 (St. Clair Shores, MI: 2018), 6–20. On part-time positions and high staff turnover, see Kristyne E. Demske, “Shores Council Debates Additional Money, Staffing for Library,” St. Clair Shores Sentinel, May 3, 2017, accessed March 17, 2019, https://www.candgnews.com/news/council-debates-additional-money-staffing-library-101124. For the dependence on private charity, see Kristyne E. Demske, “Friends Promoting Buy a Chair Campaign for Library,” St. Clair Shores Sentinel, March 3, 2015, accessed March 17, 2019, https://www.candgnews.com/news/friends-promoting-buy-chair-campaign-library-81642. The claim about the old tables and chairs relies on an anonymous staff member in conversation with the author, St. Clair Shores, Michigan, May 3, 2018.