Future Proof Book Review: The Meritocracy Trap by Daniel Markovits

It’s been about 10 years since I’ve written a book review. Back then I used to review books for Entrepreneur.com. Now seems like a great time to restart as I have a long reading list of books relevant to the future of work, communities and transportation. Let’s kick this off with The Meritocracy Trap: How America’s Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits.

If there is one book that has stuck in my brain over the past year it’s this one. The recognition that our meritocracy was causing some far-reaching problems in our social structure first hit me back in 2018 with The Atlantic article, The 9.9% is the New American Aristocracy by Matthew Stewart. Markovits takes this idea and delves into the many ways it is not good for anybody, including the 9.9%.

First, let’s tackle Markovits’ argument that the elite suffer from overwork and stress as they can only create wealth through their own labor and superior skills; and that to maintain this status they must work extreme hours and groom their children to do the same. Now I agree this is a very real thing. A large part of the overwork and stress is a direct result of the elimination of mid-skilled labor/management, which we discuss more thoroughly below. We hear too often the stories of executives burning out, neglected families, and the ill effect of constant academic competition on kids. In fact, many of us are living it. While it does help to identify the problem, the fact is, the elite have options. The compelling parts of the book focus on those who do not.

While a small group of people — call them the 9.9%, the elite, or the super skilled — populate the top of the career ladder, the former “mid-level skilled” employee has been knocked down a few steps and in some cases completely off the ladder. Markovits makes the argument that this is the natural result of a meritocracy and directly the cause of our societal inequality.

Key concepts:

The development of “glossy” and “gloomy” jobs. Traditional middle-class jobs (basically any professional job that can be outsourced to another country, or replaced by technology) have given way to a few glossy ones and many, many gloomy ones. Per Markovits: Gloomy jobs offer neither immediate reward ($) nor hope for promotion; and glossy jobs get their shine from income and status rather than meaningful work but require extraordinary training, effort and skill. The problem with eliminating the middle-tier of jobs is that (1) it decimates the middle class; and (2) knocks out the bridge from gloomy to glossy. While this new structure may provide cost-savings in the short term, it doesn’t necessarily make companies more productive, efficient or resilient over the long term because of the toll it takes on the workers.

The segregation of high-skilled and low-skilled workers. This segregation happens within individual firms where lower-skilled workers no longer even work for the same company. They are contractors, shut out from company benefits. “College-educated workers are increasingly unlikely to work for firms that also employ workers without college degrees.” Markovits (p. 204). Google is a prime example of this:

Google employs more than 130,000 contractors and temp workers, a shadow work force that outnumbers its 123,000 full-time employees. Google’s full-time staff are rewarded with high salaries and generous perks, but temps and contractors often receive less pay, fewer benefits and do not have the same protections, even though they work alongside full timers. https://www.nytimes.com/2020/05/29/technology/google-rescinds-job-offers-to-contract-workers.html

Kevin Kiprovski had a lofty title, “Expeditions Associate,” and a fun job — he got to demo Google virtual reality gear to young students. When visiting schools, he wore a gray t-shirt with a cartoon whale and a Google logo. But sometimes the company’s reputation made things awkward. Once, a teacher confronted Kiprovski. “‘How do you feel walking in here, showing stuff, when you know you’re making so much more than all of us?’” he recalled the teacher asking.

“I had to tell her,” he said, “‘I only make $40,000 a year.” He left out another revealing detail: Kiprovski didn’t actually work for Google.

He worked for Vaco Nashville LLC, one of several staffing and contract firms Google uses. https://fortune.com/2019/11/07/google-googler-tvc-contract-worker/

The end to the 40-hour work week. The 40-hour work week went out the window with the mid-level jobs. The majority of our population is now working multiple gloomy jobs that are capped at 30 hours/week while the super skilled are working 50+ hours/week. “[T]he Bureau of Labor Statistics predicts that over the coming decade, the fastest-shrinking job categories will all be mid-skilled, and the ten fastest-growing will all be either low- or super-skilled.” Markovits (p. 181).

The majority of workers have lost access to the training needed to transition into the glossy jobs. Long gone are the days when a janitor could become an executive. Not only are training programs gone, janitorial and other low-skilled workers aren’t even employed by the same company, as set forth in point 2. Professional training for executives has been outsourced to the elite colleges and universities, which already box out the middle class. This is probably Markovits’ strongest area in the book: The inequalities that exist in access to the education and training needed for super skilled, high earning jobs.

Shifting training for elite jobs out of the workplace and into the university changes the socioeconomic composition of the people who receive the training and the investment in human capital that it imparts. Employer-provided training likely always skewed somewhat toward wealth, as the better entry-level jobs, which provided the most training, went to applicants from more elite colleges and therefore from richer families. But university-based professional training skews dramatically toward wealth, as the disproportion of rich students at elite graduate and professional schools matches and even exceeds the socioeconomic imbalance among elite college students. (The one form of workplace training that survives and indeed thrives today — the unpaid internship — similarly favors young workers from wealthy backgrounds, who are disproportionately able to afford working for free.) Markovits (p. 142).

The end of institutions that promote social mobility. A college education used to mean social mobility, no matter which college you attended; but now with mid-level jobs on the downswing, only the elite educational institutions provide access to the glossy jobs. And, their admission is pretty much limited to those already in the elite class. Markovits also notes that the military, which used to be another way to bridge the gap through leadership training, is no longer a catalyst for social mobility. “Even the military no longer brings people from different class backgrounds together. The armed forces long drew citizens from all across society, and the mobilization in World War II and the subsequent GI Bill made military service a principal engine for social mobility. But today the military attracts virtually no one from the educated elite.” Markovits (p. 204).

Using the military to increase your social standing has been an American hallmark since the days of Alexander Hamilton. Lin-Manuel Miranda even worked it into the lyrics of Right Hand Man, as the best means for a poor, immigrant kid to Rise Up!:

[HAMILTON]

As a kid in the Caribbean I wished for a war

I knew that I was poor

I knew it was the only way to —

Rise up!

If they tell my story

I am either gonna die on the battlefield in glory or —

Rise up!

I will fight for this land 

With universities and the military removed as catalysts for social mobility, perhaps the only institution that still creates upward mobility is sports. But in the US, even youth sports has become elitist, and not to the benefit of the game. And we still have yet to know what sports will be like in a post-COVID19 world.

The middle-class was a bubble in the US. “[T]he poor/middle-class income gap has narrowed by about a quarter since midcentury, while the middle-class/rich income gap has nearly doubled. Put a little differently, the poor and the middle class have converged, even as the rich have left the middle class increasingly far behind. These pressures squeeze the middle class from both ends, undoing the middle-class version of affluence, … and steadily deflating what increasingly appears, looking backward, to have been a middle-class bubble.” Markovits, (p. 105).

By contrast, the middle class is in full growth mode in Asia and India. Countries on the rise invest in and support their middle class, who in turn increase their consumption and grow their economies.

https://www.weforum.org/agenda/2020/07/the-rise-of-the-asian-middle-class/

Conclusion

After such depth of discussion, which at times could feel a bit redundant, Markovits offers two areas in which to focus efforts. While neither would be easy, both might be more feasible, ironically, due to COVID19.

  1. Expand access to elite education.
  2. Bring back mid-skilled labor.

Since COVID19 we have seen the Ivy league and other schools expand to online education. With this expansion they have the opportunity to offer lower-cost elite education to a larger group of qualified students. For a more detailed discussion on the future of higher education, check out this NYMag interview with Scott Galloway.

With regard to his second point of bringing back mid-skilled labor, in the wake of COVID19, many are discussing re-establishing supply chains and small batch manufacturing in the US. These initiatives could be an opening to create mid-skilled labor. Additionally, we know that AI will replace some jobs, but new technologies often create new jobs. We need to be conscientious about teaching people the skills needed to fill these jobs. As we don’t exactly know what these jobs will look like, or who will be employing them, we need to focus on skills training, not job training.

Markovits also makes a strong point that we will need some tax policy reform in order to encourage mid-skill hiring. His focus is on eliminating the cap on payroll taxes. In its current state, “the existing tax structure makes middle-class labor the single most highly taxed factor of production in the entire economy … The existing tax structure — incredibly — actively promotes meritocratic inequality, by encouraging employers to displace mid-skilled in favor of super-skilled workers. A simple reform to the payroll tax would reverse these incentives, to favor mid-skilled, middle-class workers. The reformed payroll tax would also raise new revenues, and some of these might be deployed to generate further incentives for creating new middle-class jobs.” Markovits. (p. 281).

To this, I would add that we need to revisit apprenticeship tax credits and see if they can be expanded to help create livable, competitive wages and the training needed for mid-level skill workers. In addition, perhaps a new sort of entity to represent workers’ rights. Unions have a checkered history, but are starting to see an resurgence in white-collar workplaces and it may be one of the only forces left to bridge the gap between the gloomy and glossy jobs.

At the present time, the future of work in the United States is uncertain for everyone, but there’s room for innovation and improvement and that is something I hope to explore through the Future Proof Research Collaborative. In the meantime, to sum it all up, I’ll leave it to Markovits:

Meritocracy has become the single greatest obstacle to equal opportunity in America today.

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