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Jessi Streib, "The Accidental Equalizer: How Luck Determines Pay After College" (U Chicago Press, 2023)
00:34:53
An interview with Jessi Streib
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- [00:01]
A
Welcome to the New Books Network.
- [00:05]
B
Welcome to New Books in Critical Theory. It's a podcast that's part of the New Books Network. On this episode, I'm talking to Jesse Stribe about the Accidental Equalizer, how luck determines pay after college. So welcome to the podcast.
- [00:19]
A
Thanks so much for having me.
- [00:20]
B
This is a brilliant book, and it's brilliant in lots of different ways. I think most kind of what. What stands out to me about it is how it starts with, I guess, one of those kinds of public problems that maybe lots and lots of people are aware of. But it has this kind of brilliantly counterintuitive explanation for what's going on around sort of graduates and the graduate labor market. And I think this gets captured in this sort of single word, really, that, that runs throughout the book, which is this idea of a kind of lookocracy and a way of sort of introducing the book and its big themes is basically, I suppose, to kind of talk me through luckocracy. What does that term mean? And kind of like, why is it so important to explain the graduate labor market?
- [01:11]
A
Yeah, great question. So the luck accuracy is an opportunity structure that awards outcomes based on luck. And what's so remarkable about it is that it neutralizes class differences and provides a form of class equality. If we look at college students at the same university, as lots of people know, it's usually students from more advantaged class backgrounds who have completed more internships, have higher GPAs, have more professional connections, and display more status symbols. Normally, we'd expect that people with more of these resources would be able to capitalize on them earning more money when they graduate from college. But in a licocracy, none of these inequalities matter because outcomes are allocated by who guesses well rather than by class or by the resources associated with them. Outcomes are determined by luck. This works in two ways. The luckocracy has two features that make sure that luck is what is determining these outcomes. The first is that it hides information about where and how to get ahead, and it does so from people from all classes, so nobody knows where the highest earnings positions are or how to get them. And the second feature is that gatekeepers evaluate individuals using class neutral hiring criteria. So because of hidden information, students from all class backgrounds are going to have to guess where and how to get ahead. And because they're evaluated by class neutral criteria, their guesses are equally likely to pay off. So in this way, luck sheik shapes outcomes. The because the people who receive the highest pay are going to be Those who guess the best, not those who come from a particular class or have particular resources.
- [02:56]
B
I mean that that's a really perfect overview of precisely the kind of counterintuitive nature of what the book is arguing. Usually I don't think this is just a sociologist kind of problem, but we would expect most areas of social life to be stratified in particular ways. And we might expect those from higher class positions to end up with higher pay, better jobs, better conditions. But as you've described, there are particular features, I guess, both of the kind of graduate labor market that you're studying, but also kind of more broadly about what's going on perhaps socially as well, and through the education system that creates this, this lookocracy. One thing that struck me reading the book was that, and I sort of wonder if you've encountered this question before is whether this is a kind of very particular kind of niche part of the labor market and of university education. And I'm sort of interested to know how you went about studying the books analysis and particularly actually the sort of case studies and examples you use, because you're looking really, I guess, at a kind of particular part of the business market and a particular type of college education. So what were your sort of methods and case studies?
- [04:20]
A
Yeah, that's right. So I don't think that the findings are niche, but they don't apply to the entire labor market either. So let me tell you about who they do apply to. So I studied business students at a public university that's not elite. There. I followed over 60 students from the beginning of their senior years through the end of that first year in the labor market. I also interviewed or Talked to over 100 people who were involved in hiring business majors from non elite universities. And I observed students and employers at dozens of events such as career fairs, information sessions and professionalization sessions. I also conducted content analyses of job ads as well as students cover letters and resumes. And so the findings really apply to this mid tier business labor market. That's the labor market for people doing things like tracking inventory, monitoring market campaigns, doing project management, doing some research for financial investments, doing some entry level HR work, the day to day stuff that makes businesses run. And so I would say that these findings are going to generalize to other mid tier business labor markets, but, but not elite ones. And by mid tier I mean ones that are hiring students from non elite universities, not elite ones. And they're going to apply to types of jobs that don't really care if you have a class based taste so things maybe more in the sciences, more in computer related jobs, engineering, things like that, and probably also nursing as well. But they're not going to apply to things in the arts, they're not going to apply to publishing, and they're not going to apply to any field where the new hires are going to be interacting with elites a lot.
- [06:07]
B
I mean, it's a kind of classic description of almost sort of like normal jobs in normal graduates again and again. This isn't sort of moan about sociology, but so much of sociological analysis we see is directed precisely at kind of, you know, elite or top end. As we grapple with social inequalities. It's really sort of fascinating and refreshing to see a book that is dealing, as you've described, with that kind of like mid tier as you describe it, you've sketched out kind of what those jobs are. And I think, you know, the listeners should have a kind of good sense of, of what sort of jobs we're talking about. Earlier on you mentioned this idea of kind of there being certain things that are hidden in that job market, particularly kind of hidden information. And over the course of the book, but also in particular in the earlier chapters, you sort of dig into how things like hiring criteria, the way decisions are sort of made about hiring are sort of hidden from the graduates view. And I'm fascinated to know more about that word, really, that kind of sense of information being hidden. How does this work? Like what kind of things are hidden and how does the hiding happen from potential candidates, potential hires?
- [07:29]
A
Yeah, I'm glad you asked because one of the key features of the lithocracy is that it hides information from students from all class backgrounds. So essentially by doing that it's creating this ungamable system where even the most privileged people figure out how to get ahead. And so one of the most important things that's hidden is of course earnings. So they're not in job ads very often. Even if they are in some job ads, people don't know how the job that how. Sorry, even if they are in some job ads, then people who are, who know what that particular job pays still don't know what it pays compared to other jobs. So is it high paying or low paying for jobs like it? Students also usually don't figure out what the jobs pay during the interview process because employers refuse to tell them. And their connections also don't tend to know what jobs pay. So they're applying for jobs without knowing which particular jobs are high paying or low paying for jobs like it. And Then of course, how to get a job is also hidden from students. And I think that seems counterintuitive because we think, oh, there's so much information on websites and taught in business schools about how to get a job, but this information is pretty general. So it's things like, oh, employers are looking for communication skills or leadership or teamwork. But then when you think about it, what does strong communication skills mean? What does it mean to be a good leader? How will hiring agents evaluate this? And it turns out that employers have really different ideas about what each skill entails and how to tell whether students have it. And they don't share this information with applicants. So students are going to have to guess how to present themselves to each new person who's evaluating them. And this is really hard because the information or the criteria that employers are using can be really contradictory. So is good communication being concise, or is it being able to give really detailed and thorough answers? Should students signal that they're leaders by saying I a lot, or should they signal that they're team players by saying we a lot? And some employers have really strong opinions about these sorts of things, but they don't tell students which one they think is the better one to do. So students are just left to guess. So they're guessing where to get ahead, that is what jobs are going to pay them the most for the type of job they want to do and how to get each particular job, because they don't know how they're being evaluated by each person who they're talking to.
- [10:02]
B
I mean, treat to know more about the evaluations. You mentioned this idea of kind of class neutrality earlier on, and I wonder if you could say a bit more about that, because one of the things that is really clear from the book, it's not just that students have this kind of guessing game, but also in some ways, employers, I mean, I hesitate to say are being kind of fair because that's not the carried away, but there is a sense of the way they do evaluations is kind of fair. You know, that they're trying not to bring the sorts of biases you might see in the context of, say, elite hiring or for some of the jobs you've mentioned in say, the arts.
- [10:42]
A
Yeah, I don't think I'd use the word fair either, but it is class neutral. So maybe that's a form of fairness and that really matters because if students were all guessing where and how to get ahead, but if the employers were evaluating them by class bias criteria, then class advantage, students guesses would be more likely to pay off. So it's really important that they're not using class related criteria to judge students. So they do this in a variety of ways. I think one of the most important is that they have a really low bar for hiring. So when they're looking for interns, they said things to me like, we're just looking for people who haven't been sitting on their fanny. So people who did anything, you know, they worked, they volunteered, they were part of a club. So that's a pretty low bar. That's something that students from all classes can do. And then employers keep on a lot of interns and hire them into full time positions later. They also use a low bar for the people that they're hiring during their senior year to go on to do entry level work. So that bar is a little bit higher, but it often means can they answer all of their questions without being demeaning to their teammates, while wearing clothes that aren't torn, while not swearing? And they might have a very specific bar that they're trying to have students meet, but it's not usually a high bar. They also maintain their class neutrality by not caring how high over the bar students go. So if they want somebody who's interned before, they might not care if the student has had three internships or one if they have a GPA bar, they might say, well, we want students with at least a 3.0. But then they don't care if the student has a 4.0 or a 3.1. And then there's other ways too that they maintain this class neutrality. So one is that they don't care where students learn their skills. So if they learn their skills, like say, leadership by being a manager at McDonald's or by leading an equestrian club, it just doesn't matter to them. If they have really want students who have interned, they don't really care. Did they intern at a prestigious firm or did they intern at a firm they'd never heard of? They just care what the student learned while they were going through that internship experience. They also define a lot of things that they're looking for in class neutral ways. So when we hear fit as sociologists, we usually think, hey, that might be a code word for discrimination, but it really wasn't for these employers. So. So they might think fit is somebody who's outgoing or somebody who's reserved, depending on the job, but that's not really a classroom record. They might think it's about being flexible and adaptable, but that might be a Little bit classroom. The idea is, overall, it's something that people from all classes can exhibit. They also tend to be looking for people who show interest in the company, but they define that in really class neutral ways. So that often means, have you looked at our website? Can you say something like, oh yeah, this is what you guys do? So again, something students from all classes could do. Of course, sometimes the employers do use some class bias criteria, but they tend to balance it out. So for example, one hiring agent told me that he prefers candidates who have participated in Greek Life, which is something that students from more advantaged class backgrounds are more likely to do. But he also preferred students who paid for college themselves, which is something that disadvantaged students are more likely to do. When they use some criteria that favors one group, they also tend to use some criteria that favors another. Then, of course, applying for jobs is almost free. You can upload a resume online. Or for these business majors, there's often employers around campus and they can just hand in a resume to them. Employers tend to pay for the processes of interviewing any travel that's related to getting to the interview. Students just need to afford a seat. And in a business school, they know that they're going to have to buy one years in advance. And everybody I talked to told me they could save enough to be able to buy a suit. Then I think finally, there's some processes that they put in place that end up neutralizing class differences too. So for example, we would think that students from more advantaged class backgrounds are going to negotiate over pay more with employers. They tend to have a history of negotiating with authority figures more. But most of the employers I talked to told me that they refuse to negotiate with college students. They just don't think they have a lot of leverage or want to make sure everything's fair for the new hires that they have coming in. And so by just saying we don't negotiate, that maintains class neutrality too. And so, because information is hidden, students from all classes have to guess where and how to apply. And because they're judged on these class neutral criteria, their guesses are going to have the same chances of paying off. So this creates this luck accuracy where pay is allocated by luck and not by class. This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Indeed Sponsored jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate. C. According to Indeed data, sponsored jobs have four times more applicants than non sponsored jobs. So go Build your dream team today with Indeed. Get a $75 sponsored job credit@ Indeed.com podcast. Terms and conditions apply. Get in the game with the college branded Venmo Debit card. 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- [16:44]
B
You talk quite a lot there about what the employers do. I wonder if we might sort of jump ahead in the book and think about how does this kind of like continue throughout careers? Is promotions criteria the same? Do people encounter the same kind of luckocracy when they're thinking about, you know, applying for pay raises or applying for promotions?
- [17:11]
A
Yeah, so the luckocracy maintains after students enter the labor market, once they're in the labor market in their first year of work, they're still in the slack accuracy. That's because they still don't have information about where or how to get ahead. And they're still judged by class neutral criteria. When students are in jobs, if they're in jobs that hire a lot of college graduates, this isn't typically true, but a lot of students end up in jobs that aren't hiring lots and lots of college graduates every year. And and for those students, there's often no clear path to promotion. So they don't know what they need to do to get promoted. They don't know what the timeline is, they don't know what the positions are that they could be promoted into. And if they're promoted, they don't know what those positions pay. And then information is still hidden about what they could be earning at other firms if they did work in their companies, even very similar work. And so students from all classes are still having to guess where is the best place for them to get the most money? Is it staying with the company they have and trying to get promoted? Who knows what they'll be paid there? Or changing companies? And again, they don't know what they'll be paid at those companies either. But they're still usually judged by class neutral criteria. So the bar is usually still pretty low. Like, are you showing up on time? Are you getting your work done? Are you completing your tasks? Are you not swearing? Are you dressing professionally? Which these are business students. They've all learned how to dress professionally regardless of their class background. And so luck is still shaping their outcomes because they're still having to guess where and how to get ahead and they're still being judged in class neutral ways.
- [18:54]
B
If that's the kind of, I suppose, employers and maybe sort of later career story. The other thing the book does is talk quite a lot about college and about that sort of transition from college into the labor market. You've mentioned a few times the sort of the things students learn in business schools. Like, you know, you have to wear a suit and yeah, you know, the kind of embodiment of someone who, you know, looks like they've been to a business school and looks like and acts like they are sort of professional for as you describe, the kind of mid tier business market. So what is kind of the story of college here? Is college kind of like a great equalizer in terms of producing these job market ready candidates by I suppose again like flattening class differences? Or do we still see the kinds of, I suppose, inequalities playing out in college?
- [19:52]
A
Yeah, colleges often are called the great equalizer, but they really aren't. So of course colleges don't select students equally from places different class backgrounds. But even though their graduates go on to earn about the same amount regardless of their class background, it's not that colleges are doing the big work in producing that equality. And part of this is I think for a pretty simple reason, colleges can do a lot to help all students. But students from all from more advantaged class backgrounds are going to be able to supplement whatever their college offers with more resources from their families and from their networks. So for example, colleges can bring professionals to campus so that students from all class backgrounds can connect with them, try to network and try to get a job. But while that seems equal because hey, they're all here and students from all class backgrounds can go meet them, it doesn't equalize students access to people who can help them. So students from more advanced class backgrounds not only meet the people who come to campus but but they also come in knowing more professionals and then they do more networking on their own. It ends up not being equal even though the things that colleges are doing, it's providing the same resources to everybody. But I think the really good news is that colleges don't have to be great equalizers for advantaged and disadvantaged graduates to go on to earn the same amount. And that's because the real equalizer is the lithocracy that exists within the labor market. So because of this, colleges just have to get students from all classes to meet employers low bar of employability and then the luck accuracy can take it from there. And colleges can do that without equalizing students resources, just providing the credential they need to enter the LEF accuracy and teaching students the basics about how to get a job and how to have the skills that employers are looking for.
- [21:47]
B
I mean, a really good example of how the lookocracy sort of really kicks in is in the kind of the middle of the book where you talk about the different kind of strategies that students have for applying for jobs and also the kind of important class differences. And I'm sort of keen to get I guess, a kind of sense, I mean, you've touched on this a bit already of what those sort of strategies and what those class differences are and how the lucacracy really kind of kicks in and means that, you know, even if you're like exceptionally well connected and you can buy really expensive suits or something, something like this, it still doesn't matter.
- [22:26]
A
Yeah. So in line with colleges not erasing these class differences, students from different class backgrounds apply for jobs using different strategies. So students from class disadvantaged backgrounds tend to accept what they can't change while students from more advantaged class backgrounds try to change what they cannot accept. So students from disadvantaged class backgrounds tend to accept that they don't have a lot of people who can help them prepare their resumes or prepare for interviews. So they learn what they can from their courses about their resumes and then they just send them out. And they also tend to enjoy winging their interviews, which is a great strategy when you don't have any inside information about what you'll be asked or how you'll be evaluated. Of course, they also can't connect with their interviewers as often about being part of exclusive activities or enjoying the same expensive activities. So they tend to just talk to their interviewers about things they have in common. So being from the same state, watching the same sport, attending the same university, or if they can't find anything, just asking them questions about themselves. But students from more advanced class backgrounds take a really different approach. They want to change what they can't accept, which is that they really don't like that they have so little information about where and how to get ahead. And so they do a lot to try to gain more information. So they ask a lot of people to get to give them feedback about their resume, and they ask a lot of for a lot of advice about what interview questions they should prepare for. They also ask more about the job, they try to find out more about what it pays, what they'll do on a day to day basis. And they also display a lot of status symbols, not necessarily purposely, but just by talking about what they've done in their life. They bring up in interviews their expensive extracurricular activities, or their prestigious internships, or their international travel. But despite that, they have all these really different strategies, they end up in the same situation, and that means that they don't have the information they need to get ahead. Despite that, students from more advantaged class backgrounds are asking for it so much. So the students from more advantaged class backgrounds, they do get more help on their resumes, but they're getting help from people who don't know how they'll be evaluated. So that doesn't always pay off for them. They get a lot of advice about how to prepare for interviews questions, but often that advice is like, prepare for this and this and this question, and then those questions are never asked. They do get more jobs through connections, as you might expect. But their connections don't know how much each job pays and how much it pays compared to other jobs they can get. So they just as often lead students into low paying positions as high paying ones. Sometimes students do get some information about what a particular job pays, but it usually turns out to be wrong. And that makes sense because information about pay is usually hidden. And so their connections are just guessing. They also present all these status symbols to employers, but in this class neutral system that employers have set up, those are ignored. And so advantaged students end up in the same position as students from more disadvantaged backgrounds. They don't know where or how to get ahead and neither do their connections. So everybody is just guessing. Since nobody has the information to strategize well and everyone's guessing and everyone's status symbols are ignored, they end up in the same place, and that is getting jobs that on average pay the same amount.
- [25:55]
B
I mean, there's lots more we could kind of dig into in the book, but given you've given us kind of really clear summary of how this system works kind of through college and into the labor market. I have a sort of profound philosophical question that the book concludes with, which I think it's something like, should we keep America's Best Equalizing System? And reading the book and over the course of our conversation, you know, this sounds like an incredible sort of almost kind of Triumph of the American way of. You know, everybody is. So long as they can kind of get through the business course and you know, get into college in the first place, you know, everyone is almost kind of treated equally in the labor market. And I was sort of intrigued by the way the book finishes by saying actually this isn't the only way of really kind of like organizing a labor market and you know, thus a society and there are sort of other systems we could use. And I suppose the book is. I mean, correct me if I'm. I'm wrong here, but. But there's a slight, if not ambivalence, but the book is kind of cautious about saying this would be absolutely brilliant if we did it absolutely everywhere for everybody, under all conditions. And so, yeah, like maybe what are the kind of drawbacks of the lucacracy? Are there any, you know, is it the kind of perfect system for labor markets and for life?
- [27:26]
A
Yeah, that's a great question. And it's something I've wrestled with so much because had you told me before, I had my findings. There's a system out there and it equalizes earnings for students from different class backgrounds. Should we keep it? I'd be like, of course. That sounds amazing. That's like sociologists dream is to have this equalizing system. Why would we not keep this system? But as much as it has this amazing upside, it also has so many profound downsides that it. I think ambivalence is a great word to describe how I feel about it. So of course it's getting this equality by hiding information from students from all classes and from their connections. And what that means is that students are entering jobs without a lot of information about not only the pay, but also what the job is. And so they're entering positions they wouldn't have taken if they had more information. And so a lot of people end up not that happy at their jobs. It creates a lot of market failures. So students skills aren't necessarily well matched to their positions. It limits pay, I think, for students from all class backgrounds because employers are hiding their wages. They're issuing exploding offers, they're refusing to negotiate. And these practices are likely to depress workers of wages because they're limiting competition, constraining their ability to gain leverage, and also just increasing the chances that students take a job that they wouldn't take. If they knew that they were getting paid in that 20th percentile for jobs like it, they might have said no, but they don't know and so they say yes. I think the other thing is that the leocracy is built on this low skills bar. And in some ways that's great and makes sure that we have class neutrality. It also means that people don't have to dedicate their lives to work. It's also not that great in that sometimes we want people to build more skills and it's not really incentivizing that. And then I think the final thing is that its reach is limited. So it's limited to students who graduate from college. And of course there's a lot of inequality built into that. And so we've got this massive upside, this equalizing system, but I think also this massive downside, the hidden information. And maybe that's a trade off we're going to have if we want an equalizing system. Any system where information is transparently available, people with more resources are going to be able to figure out how to get the rewards. They want more and they're going to be able to get them. And so there's this trade off between equality and transparency. And I think different people can come down on different sides about which of those, if we have to trade them off, they would really prefer. And I think you're right. And the book is pretty ambivalent about is this a great system that we should promote or is it not? But I think it's at least useful to know how we can create equality and to have this framework for helping us think about, okay, here's a model. Is it one we want? And I think that's maybe one a question for the public to decide more than for me to decide.
- [30:35]
B
I mean, it strikes me there's sort of several different research agendas that might flow from the book. I think it'd be fascinating to really kind of dig into those areas of American labor market life that have got strong legal protections around them. Things like racial discrimination, gender discrimination, how they kind of, you know, intersect with social class. I think, you know, comparisons with other parts of the labor market. You know, you've mentioned that kind of sense of these rules not applying where there's either, you know, high levels of information or there's, you know, more kind of elite based networks that go on in hiring. And they're just like two possible books you could write sort of in addition to this one. And it strikes me that with a book that contains so much potential for next steps, are you kind of thinking about doing more in this space or in some ways are you thinking, well, actually, you know, there's a whole other range of things I could be thinking about now. I've sort of, you know, sketched out the lookocracy and it's for sort of other people to take it on.
- [31:48]
A
Yeah, I love your book ideas. I've gone the other way, I think, and try to back up. And so a book I'm working on now is, well, how does some working class kids get to become college graduates when so many don't? And so how can we help prepare more working class kids to enter this black accuracy? So starting earlier in life, I've been chasing the lives of working class kids from when they're 13 to 18 to 23 to 28 to try to figure out how we can get more upward mobility with the less accuracy maybe being the end point of that. So I'm starting more at the beginning now. So. But maybe one day I'll do your ideas or I would love it if other people built on the left accuracy and we figured out more about where these equalizing systems exist and what are the other ways they might create equality. I don't think they will by race and gender, but they might be able to alleviate it to some degree. And what other countries does the accuracy exist in? Is this just a US thing or is this something that might be happening around the world?