They really are.

first

Post by Renton555

I guess it depends on what you mean by a problem. To state the obvious, if indicators of fit at elite firms are using upper class signaling then members from the upper class will be privileged given that the things they are looking for require a lot of time and money not available to those of less affluent means.

What's interesting is there actually might be a legitimate business reason for doing so when dealing with upper class clients or relationships, it's not like old boy cronyism, but this creates a slight problem in that now being meritorious doesn't simply mean being able to do the job better than anyone else, it means giving off the correct indicators of class, which is arbitrary. This, in turn, limits social mobility while giving the appearance of a true meritocracy by hiding class indicators under the guise of relationship or ability to fit 'skills'.

How overstated or understated this is is up to you.

Well it just seems like if there is a pool of underutilized highly competent labor, then competitors would scoop those people up. Firms who are able to more accurately assess the value of their new hires would achieve greater productivity etc. Basically the same types of economic arguments that are conventionally used against affirmative action would apply to this.

It may seem subjectively unpleasant that the hiring game needs to be played this way, but ultimately it seems like employers are going to do what works best for them, and we would like business to be run in an efficient, productive way for macroeconomic reasons. It seems to me a bit more likely that the top firms have a clearer grasp of what makes a quality hire than you and I do, as opposed to there being a toxic culture that is keeping quality people from rising in the business world.

Renton,

When your axioms come into conflict with empirical observation, why do you conclude that your axioms are what must be true?

Maybe you should show me the wealth of empirical evidence that invalidates my axioms about labor economics?

Did you actually read the link you are responding to?

More precisely, your intuition is that a state of affairs where talented but "bad-fit" candidates are hired less often is unstable if "fit" doesn't correspond to some kind of business value. That may be true, but it doesn't prove that this state of affairs is not the case. At best, it shows that, over time, this state of affairs is likely to erode away. More interestingly, it's likely to erode away specifically by people looking at hiring, saying "Hey, these common processes don't work as well as they could!", and people making changes to account for those findings (which is more or less what the linked article is trying to do). Your response is basically equivalent to the proverbial economists who see a $20 bill on the street and conclude that it must be counterfeit or someone would have picked it up already.

This echoes my first response to huehuecoyotl's original post. I'm not sure it is a problem, and if it is a problem, I'm not sure it demands a heavy-handed solution (i.e. a new law). It could just be an unstable economic situation like you're saying, one which will resolve itself in time. But if it actually is approaching an equilibrium state, it bears discussing whether the state should step in or if its just better to leave it be. Maybe it is best to let the prospective hires try to get better at playing the game than it is to introduce laws which would likely just hurt workers more.

These two paragraphs are conflicting. If employers are doing what's best for themselves and have relatively good knowledge then there isn't a hidden pool of competent talent if part of being competent is signaling upper class, which is what you're saying in your second paragraph.

Which I think you understand but you don't want to follow that through to the logical conclusion. Which is that someone justly 'deserving' a job isn't just function of just hard work but of also having the correct type of upbringing in order to signal the correct hobbies or activities not easily accessible to someone of less affluent upbringing, which creates an uneven playing field.

Now how overstated or understated you think this cultural capital is to corrupting the even playing field is up to you.

It is inevitable that employers will have individually-subjective criteria for the optimal hire. It might currently be the prevailing sentiment that "chemistry" is more important than other value criteria, but surely there will be employers with different desires. Also, this would express itself in a stratification of wages for the same type of work. Someone with a lower upbringing would, on average, have somewhat lower wages. This admittedly sucks for them in the short-term but it works to the benefit of the system in the long-term. Firms with more class-blind hiring policies would get more productivity for their dollar and thus would have a competitive advantage. Their hiring criteria might become the norm and the wages for low and high upbringing people would approach one another, in time.

I think you keep wanting to separate out class signalling from productivity but often they are more entangled than we would like which is why elite firms are looking for them.

So, essentially, people like other people who display the same behavioral traits as they do?

If they are entangled then the problem can't be framed as "people who would do the job better aren't getting hired." They wouldn't do the job better. They would have an advantage in raw competence but it wouldn't overcome a lack of synergy. It's an uncomfortable situation. What would you do about it?

Renton, how well do you know labor economics? Gary Becker is kind of the originator of incorporating social phenomena into the realm of economics, and you could paraphrase his work as basically saying: Racial wage gaps are driven by labor discrimination. There are 3 sources of discrimination: employer discrimination, worker discrimination, and customer discrimination. Your argument takes care of the first two: in competitive markets with homogeneous goods, you'd expect discriminating firms and firms with discriminating workers to be forced out of the market (because they have to pay a higher wage to attract the same level of production).

But this doesn't say anything about customer discrimination. If customers prefer to be served by whites rather than blacks, firms will pay whites a higher rate than they do blacks. And that's perfectly rational and economical because when customers have racial preferences, the employee race becomes part of the employee productivity; white employees are inherently more productive than black employees because customers prefer to be served by white employees. If customer racism persists, then this is a sustainable equilibrium.

You can apply this mindset to any (X,Y) set of groups where one group has historically been discriminated against, whether it's (Men, Women), (White, Black), (Rich, Poor). In each case, if consumers have a persistent preference for being served by someone in X group, then an X/Y wage gap will persist.

Empirical evidence?
Customer Discrimination and Employment Outcomes for Minority Workers, Quarterly Journal of Economics August 1998
"Our results show that the racial composition of an establishment's customers has sizable effects on the race of who gets hired, particularly in jobs that involve direct contact with customers and in sales or service occupations. Race of customers also affects wages, with employees in establishments that have mostly black customers earning less than in those establishments with mostly white customers."

You could also argue that within-group communications are much easier than inter-group communications. That means it an otherwise more productive individual might actually be less productive to a certain employer if the employer can't effectively communicate with the employee. If a privileged CEO has a choice between an otherwise productive poor person and a slightly less productive person from a similarly privileged background who "speaks the same language", the employer would rationally choose the less productive person because the reduced cost of communication can overcome the difference in other productivity. Again, you'd see a stable equilibrium here, with employees of different backgrounds sorting into employers based on those backgrounds.

You see evidence consistent with this in social networking studies.
Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes
Journal of Political Economy, December 2008

Okay, so what actual problems are you diagnosing here, other than an undercurrent of racial/class/etc bias that exists within the population at large? Do you think affirmative action policy would remedy this problem? I think it would just make things harder for workers, while ignoring that the underlying problem even exists.

By the way thanks for actually having a conversation. You haven't even called me a white supremacist yet. I'm beginning to forget what forum this is.

Well, we can always just tax the rich and cut checks for the people born at an inherent disadvantage rather than try to even out hiring practices, but I may boldly speculate that that won't be acceptable, either.

It doesn't really matter what I find acceptable. Distributive policy is likely to prevail for the foreseeable generations regardless. It just doesn't seem to be remedying the problem. Worse, it happens that the capital at the top is pretty economically useful to society, so we're actually paying a heavy economic cost for something that appears to be perpetuating minority poverty, not alleviating it.

I'm not worried about alleviating the problem mentioned as much as pointing out that it messes up the naive meritocracy argument. I'm glad we can all agree some degree of 'unearned' privilege and the attendant 'unearned' income exists.

I don't know if this was directed at me. I don't know how to fix the existing problems. I just get irritated when people offer logic-based economic axioms (over time, competition will drive out the racial wage gap!) without appreciating that even if you're working with a spherical cow, there are reasons why the stated premise is incomplete or outright false.

Renton, what are your thoughts on the Civil Rights Act?

The part of it that ended discrimination by public institutions like schools, voting, etc was necessary. I don't like the idea of a "public accommodation" distinction in the private sector though. I believe that if a business owner wants to discriminate based on race or whatever he wants, then that's his right, and I think public outcry and the profit and loss system usually provides enough disincentive against discriminative behavior. A public sector institution lacks these disincentives; it does not need to be popular or fair in order to remain among us, so a law against discrimination was necessary to bring it to heel.

Texas about to kill someone whose prosecution was full of missteps

Cliffs:
- Les Bower was convicted in 1984 of murder of ~5 people in an airplane hangar
- he claims he went there to purchase an ultralight aircraft and took the aircraft home with everyone there very much alive
- prosecution nailed him a.) by putting him at the scene b.) because he initially lied about ever being there c.) because the ammo used in the murders was very rare and he owned it

The problems with his prosecution:

http://slashdot.org/submission/44788...ylenol-murders

If Les Bower is a white guy he's got to go to even out the numbers. It's like Title IX for the death penalty.

Poor kids' bootstraps seem to be an inferior model to rich kids' when it comes to finishing college