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These charges raise an obvious question: Do any systems deny the privileged the ability to maintain their privilege, producing equality for people born into unequal classes instead? The answer is yes. In fact, such a system exists right in front of our eyes, in an unlikely place: the labor market for business majors who graduate from non-elite colleges.
This equalizing system is what I call a “luckocracy.” It allocates students’ pay by luck, and neutralizes previous class advantages in grades, internship experience, connections, and status symbols. I discovered the luckocracy as I was looking to uncover the mechanisms behind Raj Chetty’s now famous finding that graduates from the same college go on to earn similar incomes, regardless of the social class they came from. I followed 62 students from the beginning of their senior years through their first year in the labor market, talked to over 80 hiring agents, and observed dozens of information sessions, professionalization events, and career fairs, all at a non-elite public university in the South. The students were all in their university’s business school, and the employers were hiring them to do vital but ordinary jobs such as tracking inventory, recruiting workers, managing projects, monitoring marketing campaigns, overseeing payroll, and researching investments.
Through my research, I discovered the luckocracy and that it works through two intersecting means. First, it levels the playing field for students by hiding information about where and how to get ahead, but it’s the class-advantaged who have the most resources to act on this information. Second, when hiring agents select applicants, they tend to use class-neutral criteria which students of all backgrounds can easily meet. Together, these forces combine to equalize students’ chances in the labor market. When information is hidden, students from all class backgrounds must guess where and how to get ahead. Evaluated by class-neutral criteria, advantaged and disadvantaged students’ guesses are equally likely to pay off.
This is not a utopian scheme. Midtier business employers created a luckocracy by accident, as a byproduct of their standard practices. Most employers don’t post wages in job ads. They also keep pay secret internally, so students’ connections rarely know what new hires will be paid. Some pay information is available on Glassdoor and similar job-search websites, but employers don’t verify it, leaving students to wonder about its veracity. Job titles aren’t proxies of pay, either. Employers use them as marketing devices or bureaucratic tools, and they aren’t always accurate reflections of what a job entails. In this way, a “marketing associate position” may be for a sales rather than marketing role; a “finance and accounting” role may be all accounting and no finance. Students must then decide what type of job they want — human resources, marketing, finance, and the like — and from the range of job listings that appear to be for these roles, they must guess which jobs pay the most. Their guesses are consequential. Different companies pay similar employees vastly different amounts to do the same work. A good guess results in tens of thousands of dollars more per year than a bad one.
Employers ensure that all applicants have so little information that they must make uneducated guesses.
In this system, students must not only guess where to apply, but also what job to accept. Employers ensure that all applicants have so little information that they must make uneducated guesses. They give students who receive job offers stemming from their internships until late summer or early fall to decide whether to accept them, and students who receive offers later in the academic year between one day and two weeks to make their decision. In each case, these processes make it difficult for students to gain competing offers and learn what other firms would pay them. With so little information, students must then guess if the salary they are offered is the highest one they could receive. Employers ensure that those guesses stick — most don’t negotiate over pay with recent college graduates, or only do so over small amounts. Luck matters hugely.
Employers also force students to guess at their hiring criteria. Business employers do advertise the broad criteria they use to hire students from non-elite institutions: They tell students they’re looking for applicants with communication, teamwork, and leadership skills; or that they’re looking for proficiency with Excel; or that they want students who are interested in the job. However, they don’t tell students how they evaluate these skills or interests. Does it matter whether a résumé signals interest in the position through an objective statement, coursework, internship experience, or volunteer work? Is strong communication shown through being detailed or concise, answering questions quickly or slowly, showing one’s preparedness or one’s ability for spontaneity? Hiring agents often have firm opinions about these matters, but they don’t use uniform criteria or tell applicants which criteria they’ll use. And so students from all class backgrounds must guess how to present themselves to each employer.
Connections offer little help. Class-advantaged students can of course turn to their networks: parents, family friends, internship bosses, career-center staff, or those they meet at networking events or through informational interviews. But these connections lack relevant information as well; since information on pay is hidden, they lead students into low-paying jobs as often as high-paying ones. They also recommend students craft their résumés in ways that may or may not be rewarded, prepare for interview questions that are never asked, and suggest answers that hiring agents don’t value.
Many hiring agents don’t care how high over their bars students jump, a tactic that neutralizes class differences in “merit.” Not all jobs come with a GPA bar, but employers who require one tend to check whether students have met it and ignore how far over it they go. For example, if the GPA bar is a 3.0, students with a 4.0 aren’t favored over those with a 3.0. Likewise, hiring agents who want students with internship experience may check whether students have interned while not favoring students who have completed three internships over those who’ve completed one.
In the midtier business labor market, hiring agents disregard where students learned their skills. This blunts another class difference, as expensive signals of prestige go unrewarded. As one hiring agent put it: “We’re looking for people in leadership roles. That could be anything. Church choir leader would count. Manager at McDonald’s would count. Anything, we’re open to anything.” Another said about internships: “[My colleagues] really put a lot more value on what the person was actually able to do and what they were able to gain and learn in the internship versus where it was actually at.”
The hiring agents in this labor market also define positive traits broadly. Polish isn’t about dressing like you’re rich but about eye contact, engagement, and not chewing gum. Fit isn’t about sharing the tastes of elites but about more accessible attributes such as flexibility, being reserved or outgoing, or showing curiosity.
Employers weren’t looking for the candidates with the most merit; they were looking for candidates who cleared their low bars.
The cost of applying for these jobs is close to free. Students upload a résumé or hand it to the hiring agents who visit their classes or participate in their career fairs. If they are interviewed, the employer pays for travel. Students only need a suit — they know they’ll need one years in advance, and students from all classes told me they could afford one.
Of course, hiring agents don’t entirely avoid criteria that favor one class over another. But when they do use class-biased criteria, they can cut both ways. For example, an agent who wanted to hire students who had studied abroad also wanted to hire students who showed no signs of entitlement. Another agent wanted to hire students involved in Greek life, an expensive activity the advantaged participate in more often, but he also preferred students who paid for college themselves. The playing field remains level as long as each group is favored at different times.
Thus, by accident, midtier employers have created an equalizing system. They hide information about where and how to get ahead, forcing students from all classes to guess. In doing so, they’ve instituted a luckocracy, allocating pay according to luck, not class.
Luckocracies are real alternatives to meritocracies. In the labor market I studied, employers weren’t looking for the candidates with the most merit; they were looking for candidates who cleared their low bars. The most qualified students couldn’t sort themselves into the highest-paid positions; they couldn’t even identify what they were. And so some students with eight internships got paid less than students doing similar work who had none, and some students with equal skills ended up doing similar work at different firms that paid them different amounts.
The students who received the high-paying positions weren’t the ones with the best résumés but the ones who lucked out. These included a student who applied for a position because the company’s name appeared at the top of her screen; one who literally bumped into a recruiter, sent his papers flying, and then as he bent down to pick them up, was convinced to apply; and another who told an interviewer that he didn’t know how to answer her question, then asked for the right answer, and was told that the right answer was asking for help, which he had just done. Despite having unequal internship experience and GPAs and coming from different backgrounds, the students I followed got paid about the same amount: an average of $45,000 a year for the advantaged students and $48,000 a year for the disadvantaged students.
Hidden pay makes it difficult for students to avoid low-paying offers, to know when their offers are low, and to negotiate for higher pay.
Just because a luckocracy offers a more-equitable alternative to a meritocracy, that doesn’t mean it doesn’t come with its own problems. Just as meritocracies aren’t all bad, luckocracies aren’t all good. They are opposite systems, each with positive and negative features. Luckocracies equalize while meritocracies stratify. But luckocracies also hide information from people of all classes, creating an “ungameable” system in which no one knows how to get what they want. Meritocracies provide more information about where and how to get ahead. Luckocracies, once exposed as such, sever the link between earnings and deservingness, as knowing that pay is rooted in luck can lessen feelings of pride or shame around earnings. By contrast meritocracies heighten the connection between earnings and deservingness; if earnings are based on merit, then individuals feel justified in their pride or shame.
Luckocracies also incentivize collective action; if people know they might be unlucky, they are incentivized to work together to ensure that the wage floor remains high. Meritocracies encourage a go-it-alone approach; for an individual to get ahead, they need to out-compete their peers. Luckocracies also disincentivize skill-building. Why work hard to build skills that may not be valued or are unneeded? Meritocracies, by contrast, encourage investing in skills.
And, of course, while meritocracies reward the few, luckocracies punish the many. Luckocracies advantage employers at the expense of students from all class origins. Hidden pay makes it difficult for students to avoid low-paying offers, to know when their offers are low, and to negotiate for higher pay. It also makes it harder for workers to figure out how to earn more and to find a better-fitting job in the future. After all, for students looking for jobs a year or two after leaving college, the labor market is much the same, filled with hidden wages and opaque hiring criteria.
Whether the luckocracy is a salutary alternative to the inequities of the meritocracy or a cautionary tale is in the eye of the beholder. One thing that’s clear, though, is that the existence of luckocracies doesn’t make colleges look good. Colleges have long held themselves up as “the great equalizer.” But not only do they not select students in an equalizing way, they’re not responsible for the equalized earnings students receive after college either (employers are). Ironically, the profit-seeking business world does more to create class equality among college graduates than our more social-justice-oriented colleges.
If colleges want to do more to bring about social equality, their strategy should be simple: Graduate more low-income and first-generation college students and grant them access to a system that creates truly equal outcomes for people from unequal backgrounds — the luckocracy.