77 Cents Redux

bizThe commonly cited statistic that women make 77 cents for every dollar a man makes has been in the news again, here, here  and here.  (To show how hip and with it we are in Central MN, this issue was also discussed at a recent public policy event on campus!)

I have discussed this issue previously in Quad 136, so will not belabor the earlier points, but author Megan McArdle of Bloomberg News does a nice job of summarizing the issues when she writes:

But we can, pretty confidently, answer a related question: How much of the pay gap is driven by those choices, and how much is driven by sexism in the workplace? The answer seems to be that almost all of the gap is driven by choice of occupation, and working hours, with an emphasis on working ours. Childless women who work the same hours as men make very close to what men do.

Does that mean there is no discrimination against women? No. The residual gap that’s left after you control for age, experience, work hours, choice of profession and so forth, is small. But it’s not zero. That residual most likely represents sexism. As a woman, I kind of take exception to that.

Most of the gap, however, seems to be driven by the fact that women work less, and that in many high-paying professions, how much you get paid is a function of how much you work … but not a linear function. There are outsized rewards to working the kinds of hours that make it very hard to care for a family.

She also does a good job of noting how the job market does not always accommodate individuals who choose to work less than full-time or take time out of the labor force.  The whole article is worth a read.

Mc Ardle’s points are important for understanding why the 77 cents statistic is misleading, but for those of us who work with college students, I think her recognition of the importance of choices women (and men) make is essential.  During their four years as undergraduates and the years that follow, our students are making many choices that will affect them the rest of their lives.  For those of us who act as advisors, mentors and role models, we have a responsibility to gently remind our students that despite the incredible opportunities their education will offer in our rich economy at this point in history, they are unlikely to be able to do everything they dream of.  Tradeoffs are inevitable.

So as they consider choices about education, majors, careers, partners, marriage, families, leisure, service, and on and on, young people should remember that the world will rarely let them have it all.  Choices are important and hard.  Consider them carefully.

By |April 21st, 2014|Categories: Economics, Higher Education||0 Comments

On Not Going to College

parkingBill Gates, Steven Jobs, Mark Zuckerberg.  What do they all have in common?  Tech pioneers, very rich and college dropouts.  So on the basis of these three data points, clearly one does not need a college degree to be successful, even fabulously successful.  It does not, however, take a logic class to see that it does not follow that going to college is not necessary for career and professional success.

The idea that one should not necessarily go to college has been pushed by individuals like Peter Thiel  and has generated articles like a recent Forbes offering by Chris Boyer, “The First Person in My Family NOT to Go to College.”  

In this article, Boyer argues that “college is a bad investment.”  He notes correctly that tuition has risen significantly faster the both the CPI and family incomes since the early 1980’s.  (He wrongly includes the cost of room and board in his argument, as one must pay for room and board regardless of whether one chooses to go to school to not, even if your parents are paying it for you.)  He then makes some spurious arguments about how colleges choose to price themselves.

In the second part of his series, “Captive Consumers: How Colleges Prepare Students For a Life of Debt,” Boyer argues that colleges are intent on desensitizing “young people to the perils of debt.”  Another issue unrelated to whether college is a good investment.

What Boyer never addresses are the returns to investments in education.  The evidence on this matter is overwhelming and has been noted in other posts.

The problem with the kinds of bad journalism that Boyer offers is that it potentially dissuades young people, especially those from less-educated or less well-off families, from making an investment in education.  Maybe if they have a family business to work in, as Boyer does (“I’m working for the family business; we have a media company, we produce some TV and radio shows, and we do some economic work”), they can afford to not think hard about investing in higher education, but those individuals who have professional success and economic security without a college degree are relatively rare and evidence suggests they will become even less common over time.

President Obama said it succinctly in a 2013 speech on education, “”If you think education is expensive, wait until you see how much ignorance costs in the 21st century.”  (Obama was offering a 21st century twist on a statement originally made by the former president of Harvard University, Derek Bok who said, “If you think education is expensive, try ignorance.”)

By |April 14th, 2014|Categories: Economics, Higher Education||0 Comments

Rutgers Commencement Controversy Continues; Brandeis Joins In

'13SJUGrad0013-sizedThere is continuing debate about commencement speakers, academic freedom and the meaning of liberal arts at Rutgers.

Similar debates arise at Brandeis University over Ayaan Hirsi Ali.

The issues at Brandeis are less about politics and more about religion than at Rutgers.  Critics of Hirsi Ali are upset over her views on Islam.  In addition, Brandeis was planning to give Ali an honorary degree, which arguably implies more acceptance of her public views.  Brandeis does acknowledge the importance of academic freedom and the free expression of ideas in their public statement on the controversy:

 In the spirit of free expression that has defined Brandeis University throughout its history, Ms. Hirsi Ali is welcome to join us on campus in the future to engage in a dialogue about these important issues.

Just FYI, the Saint John’s University Commencement speaker this year is retired Minnesota Supreme Court Chief Justice Kathleen Blatz.

 

By |April 10th, 2014|Categories: Higher Education||0 Comments