"Yes, the McKinley era, absent the protectionism, [is the goal]. You're looking at the history of the country for the first 120 years, up until Teddy Roosevelt, when the socialists took over. The income tax, the death tax, regulation, all that."You'll notice he didn't say "absent the protectionism and the abuse of government power." Of course, that doesn't mean Norquist and his fellow travellers would bring back the patronage system, but it doesn't give me a warm feeling inside either.
Tuesday, March 8, 2011
This is the sort of thing that makes me nervous
Having recently discussed the role of tenure and LIFO in preventing political abuses, this quote from Grover Norquist struck me as somewhat disturbing:
Monday, March 7, 2011
The right likes it better but the left does it better
This Naked Capitalism post, "More Public Infrastructure Sale Tales of Woe," reminded me of an apt observation Felix Salmon made a couple of weeks ago while discussing Scott Walker's privatization proposals:
It probably comes as little surprise to note that the most lucrative privatizations have generally been done by parties of the left: I’m thinking in particular of the UK’s auction of 3G licenses, which netted the Exchequer $35.4 billion at the height of the dot-com bubble.
Right-wing parties, by contrast, are more prone to thinking of privatization as something inherently good, and of monies flowing to the government as a kind of taxation which is inherently bad.
Ultrasonic Remote/Observational Epidemiology cage match?
OK, maybe not, but I do have a quibble Brian's otherwise excellent observations:
One of the members of the ART [Algonquin Round Table] was Harpo Marx, one of the few members that not only didn't write, but left school early. When asked why he, a member of a comedy team that many of the members might have considered lowbrow, was a member, he replied, "Well, they needed someone to listen."Rather than considering them lowbrow, the ART was pretty much packed with the brothers' friends and admirers. Herman Mankiewicz produced their best films, Alexander Wolcott's reviews made them stars, and as for Kaufman, here's a relevant anecdote from Dick Cavett:
In the years I was lucky enough to know Groucho, there was one trait of the elderly that I, at least, never experienced in him. The one where you have to pretend to be hearing an oft-told joke or story for the first — rather than the seventh or eighth — time.
With one exception. Kaufman had known and written for the Brothers Marx — the original Fab Four (then three) — and Groucho worshipped him.
It went: ‘Did I ever tell you the greatest compliment I ever got?”
I said no the first time and, also, the four or five times thereafter over the years. I can hear Groucho’s familiar soft voice in my mind’s ear: “The greatest compliment I ever got was from George S. Kaufman.” I expected a joke.
“George said to me once, ‘Groucho, you’re the only actor I’d ever allow to ad-lib in something I wrote.’ And that’s the greatest compliment I ever got.” (Each time, he teared slightly.)
I loved hearing this treasured story repeated. It was no trouble pretending to hear it for the first time.
Why we forgive him the puns
Today's column in the New York Times is another reminder of why Paul Krugman is so essential. It directly contradicts some of the most cherished conventional wisdom about the relationship between education and economic opportunity, but he doesn't say anything that I haven't been hearing from researchers and academicians.
Update: Lawrence Mishel makes some important related points here.
It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill. That’s why, in an appearance Friday with former Florida Gov. Jeb Bush, President Obama declared that “If we want more good news on the jobs front then we’ve got to make more investments in education.”But what everyone knows is wrong.
...The fact is that since 1990 or so the U.S. job market has been characterized not by a general rise in the demand for skill, but by “hollowing out”: both high-wage and low-wage employment have grown rapidly, but medium-wage jobs — the kinds of jobs we count on to support a strong middle class — have lagged behind. And the hole in the middle has been getting wider: many of the high-wage occupations that grew rapidly in the 1990s have seen much slower growth recently, even as growth in low-wage employment has accelerated.
Why is this happening? The belief that education is becoming ever more important rests on the plausible-sounding notion that advances in technology increase job opportunities for those who work with information — loosely speaking, that computers help those who work with their minds, while hurting those who work with their hands.
Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” Therefore, any routine task — a category that includes many white-collar, nonmanual jobs — is in the firing line. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor, from truck drivers to janitors — will tend to grow even in the face of technological progress.
And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. Notably, with production workers in manufacturing down to about 6 percent of U.S. employment, there aren’t many assembly-line jobs left to lose. Meanwhile, quite a lot of white-collar work currently carried out by well-educated, relatively well-paid workers may soon be computerized. Roombas are cute, but robot janitors are a long way off; computerized legal research and computer-aided medical diagnosis are already here.
And then there’s globalization. Once, only manufacturing workers needed to worry about competition from overseas, but the combination of computers and telecommunications has made it possible to provide many services at long range. And research by my Princeton colleagues Alan Blinder and Alan Krueger suggests that high-wage jobs performed by highly educated workers are, if anything, more “offshorable” than jobs done by low-paid, less-educated workers. If they’re right, growing international trade in services will further hollow out the U.S. job market.
As a statistician, I might quibble with the "If they're right."
So what does all this say about policy?
Yes, we need to fix American education. In particular, the inequalities Americans face at the starting line — bright children from poor families are less likely to finish college than much less able children of the affluent — aren’t just an outrage; they represent a huge waste of the nation’s human potential.
This is another point worth dwelling on for a moment. The educational reform movement likes to draw its poster children from poor urban and rural schools. Having taught in both Watts and the Mississippi Delta, I'm usually glad to see attention focused on these areas, but it's clear in this case that the plight of these kids is being used to market general changes in education that have little if any special relevance to the schools that need the help.
But there are things education can’t do. In particular, the notion that putting more kids through college can restore the middle-class society we used to have is wishful thinking. It’s no longer true that having a college degree guarantees that you’ll get a good job, and it’s becoming less true with each passing decade.
So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.
What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.
Update: Lawrence Mishel makes some important related points here.
Hoisted from comments: "Well, they needed someone to listen."
Brian of Ultrasonic Remote writes in to provide some historical context to our previous posts (here and here) about Orson Welles, Herman Mankiewicz and the Vidal/Bogdanovich(/Kael**) cage match:
** Pauline Kael did start this though she had the good sense to walk away when the conversation got silly.
Bogdanovich is, of course, an unabashed fan of Orson Welles, which is no sin in my book. His fandom has sadly blinded him. How is this for a statistic?
No. of Oscar nominations for Welles - 2
Oscar wins - 1
No. of Oscar nominations for Mankiewicz - 2
Oscar wins - 1
The "talented hack" remark rings hollower when you take into account that the second nomination for Mankiewicz was for "Pride of the Yankees", one of the listed films!
By the way, lest you think that I am swayed solely by numbers of awards (Welles has more), here is a funny sidelight. To perhaps emphasize the perfidy of either organization, it should be noted that two of Orson Welles later nominations were for his work in the movie "Butterfly". It was nominated for a Golden Globe for BEST Supporting Performance by an Actor and for a Razzie for WORST Supporting Performance by an Actor.
The other hole in this theory is numbers. Some sexist might say something along the lines of "Men are better musicians than women". Let's look at that statement on the basis of recorded work. While it is certainly true that there are more male names than female ones on lists made by critics and musicians, it is an unfair argument, because, quite simply, many more men have recorded. The more at-bats one has, the greater possibility of hitting a home run.
If one looks at the sheer amount of material Mankiewicz wrote, he wins handily over Welles. It is the select few that can turn out a prodigious amount of material AND have an overwhelming percentage of it adjudged genius level or thereabouts.
Mankiewicz was hired at a time that movies were the ONLY visual medium around. People loved the new medium, therefore many, many people needed to write and write a lot. In Vaudeville, if you had a successful act, you could tour for years and never change it, because it was live, could not be preserved by the amateurs and due to a circuit of theaters, it could not be centralized. Radio and movies didn't slow Vaudeville, it killed it. Radio killed the visual acts and the verbal ones could do their act a few times at best as guests, but if one of these performers got a series, you HAD to have new material. There were hours in every day and every day needed programming to fill some or all of those hours. One man was hired on radio, because someone missed a gig and a panicky station owner literally stopped him on the street and asked him, "Can you do anything!?", and fortunately, he was a pianist; he was hired permanently not long afterwards. Radio also brought about convenience. The entertainment came to you, right into your home.
Movies added the bonus of seeing as well as hearing celebrities and celebrities-to-be. it too needed to be fed a lot of material. They needed people that could write and write quickly and Mankiewicz fit the bill. Did some who found work skate by with a minimum of talent? Yes. Was some of Mankiewicz's work less than memorable? Yes. However, Mankiewicz's career did something that Welles' could not have done, which is to say that it spanned the era of movies from silents to sound. Any number of people lost their jobs because they might have been able to write title cards, but could not write screenplays. Mankiewicz was a journalist, theater critic, playwright AND a screenwriter and a member of the "Algonquin Round Table".*
Is this the resume' of a talented hack?
*One of the members of the ART was Harpo Marx, one of the few members that not only didn't write, but left school early. When asked why he, a member of a comedy team that many of the members might have considered lowbrow, was a member, he replied, "Well, they needed someone to listen."
** Pauline Kael did start this though she had the good sense to walk away when the conversation got silly.
Sunday, March 6, 2011
Flashman finds work
Back in the late Sixties, George MacDonald Fraser came up with a wonderful idea for a series of comic historical novels. He took Flashman, the villain from the best known example of Britain's beloved school novels (a genre that includes the Mike and Psmith books, much admired by Orwell, and, of course, Harry Potter) and placed him on the scene at every military fiasco of the Nineteenth century from the Charge of the Light Brigade to Custer's Last Stand.
Had Fraser been a student of business instead of military history and had decided to make Flashman a consultant in the late Twentieth Century, his resume might read something like this:
* Update: Here's a bit more on the Good Hands People, part of our ongoing "How to Lie with Statistics" series (more examples here and here).
Had Fraser been a student of business instead of military history and had decided to make Flashman a consultant in the late Twentieth Century, his resume might read something like this:
• Advocating side pockets and off balance sheet accounting to Enron, it became known as “the firm that built Enron” (Guardian, BusinessWeek)
• Argued that NY was losing Derivative business to London, and should more aggressively pursue derivative underwriting (Investment Dealers’ Digest)
• General Electric lost over $1 billion after following McKinsey’s advice in 2007 — just before the financial crisis hit. (The Ledger)
• Advising AT&T (Bell Labs invented cellphones) that there wasn’t much future to mobile phones (WaPo)
• Allstate* reduced legitimate Auto claims payouts in a McK&Co strategem (Bloomberg, CNN NLB)
• Swissair went into bankruptcy after implementing a McKinsey strategy (BusinessWeek)
• British railway company Railtrack was advised to “reduce spending on infrastructure” — leading to a number of fatal accidents, and a subsequent collapse of Railtrack. (Property Week, the Independent)
* Update: Here's a bit more on the Good Hands People, part of our ongoing "How to Lie with Statistics" series (more examples here and here).
Saturday, March 5, 2011
Then they made that terrible movie about him with Kevin Spacey
I was going to write up a post on the games of David Gale but my weekend filled up unexpectedly. Fortunately, Sandy Dean has a good paper online discussing Bridg-it (a.k.a. the Game of Gale) and the mathematics behind it.
Weekend Gaming -- Recommending a book and appreciating a publisher
This is a nice little book, cheap if you get it new, probably next to free if you get it used and it has a very useful list of mathematical games ranging from battleship to nine-men's-morris to hex, sprouts and a board version of Eleusis.
The reissue I have comes from one of my favorite publishers, Barnes & Noble. You have heard all sorts of abuse heaped on this company but none it from me. These are damned fine book stores with a business model built around the realization that the strong, steady sales of the classics could be as or more profitable than the unpredictable spikes of the best seller list.
As a publisher, the company has a wonderful track record of bringing back books that ought to be in print but aren't. My copy of Extraordinary Popular Delusions came from Barnes and Noble, as did my collection of Damon Runyon stories and a great anthology culled from the chthonic pages of Weird Tales. All told, I probably have a couple dozen with their imprint and every one's a keeper.
Wednesday, March 2, 2011
The inalienable right to have a nice lawn
I keep trying to reconstruct the reasoning behind this:
Texas has long been a hotbed of controversy on immigration issues. And a proposed immigration bill in the Texas state House is sure to raise more than a few eyebrows. The bill would make hiring an "unauthorized alien" a crime punishable by up to two years in prison and a $10,000 fine, unless that is, they are hired to do household chores.I would think that people could simply start doing without maids and gardeners. I had always assumed that undocumented domestic workers didn't have ironclad employment contracts.Yes, under the House Bill 2012 introduced by a tea party favorite state Rep. Debbie Riddle -- who's been saying for some time that she'd like to see Texas institute an Arizona-style immigration law -- hiring an undocumented maid, caretaker, lawnworker or any type of houseworker would be allowed. Why? As Texas state Rep. Aaron Pena, also a Republican, told CNN, without the exemption, "a large segment of the Texas population" would wind up in prison if the bill became law.
This might just be an example of what we were talking about
This Daily Show montage makes me feel slightly less paranoid about suggesting that some people might go out of their way to undermine teacher's unions.
From Jonathan Cohn:
From Jonathan Cohn:
Does running schools like a business actually argue for keeping LIFO? -- part II, the need for layoffs
In part I, I discussed the implications of LIFO (Last In, First Out) and non-LIFO lay-offs from a business perspective, particularly how LIFO, though not ideal from a management point of view, did offer certain advantages. (Just to be clear, as I said in the last post: "It's important not to confuse headcount reduction, which we're talking about here, with cleaning out the deadwood, where how long a person has been with the company should not be a factor.")
This leads to a bigger question: what are the reasons a company would want to have lay-offs and other forms of head count reduction? Different situations suggest different policies so you can't have an intelligent conversation about lay-off without first establishing the context.
To keep things simple, let's talk about three common situations:
Permanent drop. You are simply going to need fewer employees in the foreseeable future because of a drop in demand and/or a rise in productivity;
Cyclical drop. Your need for employees has decreased sharply but you anticipate ramping back up in the not-too-distant future;
Non-headcount driven lay-offs. Your need for employees hasn't actually dropped but lay-offs allow you to accomplish some other, almost always unstated, goal such as replacing highly paid employees with cheaper substitutes, getting rid of union leaders or creating patronage positions.
An example of a technique that works well in one situation but not another is reduction by attrition. Since permanent drops tend to be slower and can often be anticipated well in advance, you can frequently deal the problem by curtailing hiring and possibly offering some incentives for early retirement. This will take longer but given the potential for disruption that comes with approaching lay-offs and the danger of chasing away the people you need to stay (who are generally the most employable), there is a lot to be said for the attrition approach.
In the case of a sudden cyclical drop, the opposite advice holds. Cyclical drops often give less advance warning and by the time attrition shows results you might be on the other side of the cycle. This would mean you could have people exiting at the very time you start to need more employees.
To further complicate things, there's another issue managers often need to face when dealing with cyclical drops. Lay-offs need to be handled in such a way that the company will still be able to attract high quality applicants in the near future. In other words, you would like to maintain a reputation as a great place to work even while you are laying off a large portion of your workforce.
When applying these ideas to schools, two facts are particularly relevant:
First, not only is education a labor-intensive industry, but the primary workforce (teachers and administrators) have to have at least a bachelor's degree and need to be certified and vetted;
Second, the attrition rate is very high for teachers in their first few years.
Since automation and outsourcing are not big factors in education, permanent job losses in a district generally are caused by demographic shifts and possibly the introduction of charter schools. In either case, these are relatively slow and predictable phenomena. With competent management on the state level, most if not all of these cases can be handled by adjusting hiring practices.
Cyclical drops are generally caused by economic downturns. I've said before that I believe panicked, pro-cyclic government lay-offs are bad ideas in general. Furthermore, I am absolutely certain that there are ways to make state budgets less vulnerable to these downturns. Having said that, the most popular way of addressing current budget shortfalls is to get rid of large numbers of teachers and since there's no reason to believe that's going to change in the foreseeable future, how should we handle this situation?
Here is where a couple more arguments in favor of LIFO pop up. Remember, we are talking about reducing staffs to suboptimal levels. That implies that at some point, probably within the next two to four years, we will want to start increasing headcount. Given historic attrition patterns, it is safe to assume that a large number of the newer teachers will leave as soon as the economy picks up which happens to be when you most want to expand headcount.
Then we get to the asymmetry of information problem I discussed in a previous post:
In addition to the political advantages of having lots to hand out, mass lay-offs can be devastating to unions, particularly when there is some potential for administrators to game the system. LIFO offers a considerable degree of protection against this abuse (most union leaders aren't first or second year teachers) and it completely blocks the practice of getting rid of certain teachers just because they're highly paid.
It is easy to forget that practices like LIFO and tenure were put in place to discourage people abusing their power. If you take these practices away without replacing them with other safeguards, you can't reasonably expect everyone to resist the temptation to abuse them again.
This leads to a bigger question: what are the reasons a company would want to have lay-offs and other forms of head count reduction? Different situations suggest different policies so you can't have an intelligent conversation about lay-off without first establishing the context.
To keep things simple, let's talk about three common situations:
Permanent drop. You are simply going to need fewer employees in the foreseeable future because of a drop in demand and/or a rise in productivity;
Cyclical drop. Your need for employees has decreased sharply but you anticipate ramping back up in the not-too-distant future;
Non-headcount driven lay-offs. Your need for employees hasn't actually dropped but lay-offs allow you to accomplish some other, almost always unstated, goal such as replacing highly paid employees with cheaper substitutes, getting rid of union leaders or creating patronage positions.
An example of a technique that works well in one situation but not another is reduction by attrition. Since permanent drops tend to be slower and can often be anticipated well in advance, you can frequently deal the problem by curtailing hiring and possibly offering some incentives for early retirement. This will take longer but given the potential for disruption that comes with approaching lay-offs and the danger of chasing away the people you need to stay (who are generally the most employable), there is a lot to be said for the attrition approach.
In the case of a sudden cyclical drop, the opposite advice holds. Cyclical drops often give less advance warning and by the time attrition shows results you might be on the other side of the cycle. This would mean you could have people exiting at the very time you start to need more employees.
To further complicate things, there's another issue managers often need to face when dealing with cyclical drops. Lay-offs need to be handled in such a way that the company will still be able to attract high quality applicants in the near future. In other words, you would like to maintain a reputation as a great place to work even while you are laying off a large portion of your workforce.
When applying these ideas to schools, two facts are particularly relevant:
First, not only is education a labor-intensive industry, but the primary workforce (teachers and administrators) have to have at least a bachelor's degree and need to be certified and vetted;
Second, the attrition rate is very high for teachers in their first few years.
Since automation and outsourcing are not big factors in education, permanent job losses in a district generally are caused by demographic shifts and possibly the introduction of charter schools. In either case, these are relatively slow and predictable phenomena. With competent management on the state level, most if not all of these cases can be handled by adjusting hiring practices.
Cyclical drops are generally caused by economic downturns. I've said before that I believe panicked, pro-cyclic government lay-offs are bad ideas in general. Furthermore, I am absolutely certain that there are ways to make state budgets less vulnerable to these downturns. Having said that, the most popular way of addressing current budget shortfalls is to get rid of large numbers of teachers and since there's no reason to believe that's going to change in the foreseeable future, how should we handle this situation?
Here is where a couple more arguments in favor of LIFO pop up. Remember, we are talking about reducing staffs to suboptimal levels. That implies that at some point, probably within the next two to four years, we will want to start increasing headcount. Given historic attrition patterns, it is safe to assume that a large number of the newer teachers will leave as soon as the economy picks up which happens to be when you most want to expand headcount.
Then we get to the asymmetry of information problem I discussed in a previous post:
We take our already somewhat understaffed schools and lay off, let's say, 200,000* teachers selected based in part on some quality metric. We then run the schools severely understaffed for the next year or so until state revenues recover.Which brings us to the third kind of lay-offs. It may seem strange to modern ears, but teaching positions once fell under the spoils system. That's one of the reasons that teachers and other public employees have so many job protections (from Wikipedia: "Louisiana, under state education superintendent T. H. Harris, led the move to establish a teacher protection policy in the 1930s because of past political considerations in hiring and dismissal of educators").
That 200K will be made up of three groups, the good, the bad and the better-than-nothing. The good are effective teachers who end up on the list through a combination of bad luck, bad metrics and bad administrators (go here to see how the last two can work together). The bad are teachers at the very bottom of the quality scale. The better-than-nothing are teachers who aren't all that effective but are probably still at least as good as most of the people you could get to replace them.
Given the flaws in our system of ranking teachers and the innate difficulty of the problem, a fair number of good teachers will end up on the list. Likewise, given the problems with recruiting teachers for problem schools, better-than-nothing teachers will continue to make up a large part of it.
The upshot of all this is that, given population growth and the high level of teacher attrition, you will need a substantial number of the people you laid off to come back if you are to have any hope of meeting staffing targets. This wasn't as much of a problem under last-in/first-out for a couple of reasons. First, the attrition rate for new teachers was so high that many of the teachers you laid off wouldn't have been there in a couple of years even if you hadn't let them go. Second, leaving under last-in/first-out carries minimal stigma. For those who really wanted to it was easy to get back into the field a year later.
Under the 'reform' system, there is a serious stigma and a deadly asymmetry of information problem. Keep in mind that administrators are basically stuck with new hires for a year (you try finding a certified replacement in, say, November). They know that a teacher laid off under that system might turn out to be first rate, but do they really want to take the chance?
Let's say 100,000 of the laid-off teachers fell into the need-them-later category. We have screwed these teachers out of contractually obligated compensation, scapegoated them for all the problems in the education system and made them unemployable in their chosen field. Would you come back under those circumstances?
In addition to the political advantages of having lots to hand out, mass lay-offs can be devastating to unions, particularly when there is some potential for administrators to game the system. LIFO offers a considerable degree of protection against this abuse (most union leaders aren't first or second year teachers) and it completely blocks the practice of getting rid of certain teachers just because they're highly paid.
It is easy to forget that practices like LIFO and tenure were put in place to discourage people abusing their power. If you take these practices away without replacing them with other safeguards, you can't reasonably expect everyone to resist the temptation to abuse them again.
Tuesday, March 1, 2011
Does running schools like a business actually argue for keeping LIFO? -- part I, the nature of layoffs
Last In First Out (LIFO) has become one of the causes célèbres of the educational reform movement, a handy, easy to enunciate little acronym that beautifully captures what's wrong with our current system.
But if we really wanted to run schools like a business, just how wrong would LIFO be? This may seem like a strange question. After all, the reform movement is often portrayed as the domain of show-me-the-data empiricists and clear-headed economists. Surely anything they suggest is going to be based on sound business principals.
Here's how one of those economists puts it:
LIFO is a compromise, but not always an unhappy one. Unions would prefer no lay-offs at all. Companies would prefer no restrictions at all on who they let go. As a solution to this conflict, LIFO isn't perfect but it does offer some positives for both parties.
Though employers complain loudly about LIFO, they often end up resorting to something close to a de facto form of the practice when left to their own devices. Established employees have more experience, training and institutional knowledge. They tend to be more stable and reliable, more invested in the job and in the community, much less likely to make a dash for the door when the economy turns around and you find yourself understaffed. Removing them can disruptive and can lower morale.
(It's important not to confuse headcount reduction, which we're talking about here, with cleaning out the deadwood, where how long a person has been with the company should not be a factor. Even there, though, companies will often go to alarming lengths to avoid dismissing an established employee, even one who has cost the company massive amounts of money -- buy me a beer sometime and I'll tell you the examples that don't make it to the blog.)
If you don't have a transparent and reliable performance metric like sales, the consequences of deviating from LIFO can be even worse. Your best qualified and most ambitious employees tend to jump ship (Dilbert's 'brightsizing' writ large). Between the people who are definitely leaving and the uncertainty over who will be let go, a kind of mass learned helplessness can take take hold. As a manager this is not something you want to deal with.
For employees, the advantages are more obvious. LIFO offers a deferred compensation package where the compensation is security. For most of us, the demand for security increases as we age. We start families, sign mortgages, start getting serious about saving for retirement. Viewed in this light, LIFO starts to look like a case of markets doing a remarkably good job of allocation. Employees get security when they value it most and in exchange are willing to work for lower wages. (looks kind of like a win for Adam Smith)
There is, of course, a more immediate need for LIFO in many cases. It is the most effective means of preventing employers from using lay-offs as cover for improper dismissal. The classic example here is punishing employees for their role in a union. This was the issue that so offended Jonathan Chait when the victims were journalists.
Chait's position on teachers was notably different, which is interesting because not only is the potential for the abuse that Chait was implying also a concern for teachers; it is accompanied by other, even greater concerns caused by the nature of teaching and the org charts of schools.
Teachers have three primary roles: instruction; counselling; and evaluation. Because we have a complex, multidimensional, badly defined target variable and some of the nastiest confounded data you'll ever see, every method suggested for measure teacher effectiveness has been either overly-complicated, opaque, unreliable or some combination of the above and all seem to have the potential for gaming by unscrupulous administrators.
An experienced and highly respected superintendent I knew used to tell new teachers, "never trust a superintendent," and while all but one or two of the administrators I have dealt with have been dedicated professionals, I understand where he was coming from. The nastiest politics I have ever seen have been at school board meetings. That's the world administrators have to survive in. If they're successful they can be looking at a plum job in a large (but not huge) district making 170K. If they're inept they can find themselves stuck as assistant principals making little more than they made as teachers.
Put another way, it is entirely possible for a few angry parents and a couple of political missteps to cost a principal fifty thousand or more (possibly quite a bit more). As mentioned before, evaluation is part of a teacher's job and a tough grader will generate more than a few angry parents. This is one of the reasons we have tenure.
Though it's rare, I have seen principals pressure teachers to change the grades of students with influential parents. It is also rare but not unheard of for principals to shift difficult students and unpleasant classes away from allies on the faculty.
Now imagine a system where the principal can arrange, with relatively little effort and no fear of reprisals, for certain teachers to be safe from lay-offs and other teachers to be first in line. I'm sure most principals wouldn't use this unchecked power to put tough graders, independent voices, and strong union supporters in the expendable pile. There would, however, be abuses and the administrators who commit these abuses will have a tremendous advantage in the competitive landscape.
Worse yet, every decision that administrators make will be met with suspicion. Every time a teacher gets a larger than average class with more than the average number of kids with behavior problems, colleagues will wonder if the assignment had something to do with flunking students who blow off their term papers, or pushing for a tough stance in contract negotiation, or just voicing too many concerns in faculty meetings.
Businesses go to great lengths to avoid the atmosphere of distrust and labor/management tension I've just described. For all their talk of looking to business for ideas, advocates of the reform movement don't seem to give these issues much thought.
Next, the different kinds of lay-offs and their implications
But if we really wanted to run schools like a business, just how wrong would LIFO be? This may seem like a strange question. After all, the reform movement is often portrayed as the domain of show-me-the-data empiricists and clear-headed economists. Surely anything they suggest is going to be based on sound business principals.
Here's how one of those economists puts it:
An economist myself, let me try to explain. Economists tend to think like well-meaning business people. They focus more on bottom-line results than processes and pedagogy, care more about preparing students for the workplace than the ballot box or art museum, and worry more about U.S. economic competitiveness. Economists also focus on the role financial incentives play in organizations, more so than the other myriad factors affecting human behavior. From this perspective, if we can get rid of ineffective teachers and provide financial incentives for the remainder to improve, then students will have higher test scores, yielding more productive workers and a more competitive U.S. economy.The trouble is, having been a well-meaning business person myself (more recently than I was a teacher), and having built hiring and retention models for a couple of big companies (let's just say you've heard of them and leave it at that), most of the reformers don't seem to approaching this the way a business would, at least not a well-run business.
LIFO is a compromise, but not always an unhappy one. Unions would prefer no lay-offs at all. Companies would prefer no restrictions at all on who they let go. As a solution to this conflict, LIFO isn't perfect but it does offer some positives for both parties.
Though employers complain loudly about LIFO, they often end up resorting to something close to a de facto form of the practice when left to their own devices. Established employees have more experience, training and institutional knowledge. They tend to be more stable and reliable, more invested in the job and in the community, much less likely to make a dash for the door when the economy turns around and you find yourself understaffed. Removing them can disruptive and can lower morale.
(It's important not to confuse headcount reduction, which we're talking about here, with cleaning out the deadwood, where how long a person has been with the company should not be a factor. Even there, though, companies will often go to alarming lengths to avoid dismissing an established employee, even one who has cost the company massive amounts of money -- buy me a beer sometime and I'll tell you the examples that don't make it to the blog.)
If you don't have a transparent and reliable performance metric like sales, the consequences of deviating from LIFO can be even worse. Your best qualified and most ambitious employees tend to jump ship (Dilbert's 'brightsizing' writ large). Between the people who are definitely leaving and the uncertainty over who will be let go, a kind of mass learned helplessness can take take hold. As a manager this is not something you want to deal with.
For employees, the advantages are more obvious. LIFO offers a deferred compensation package where the compensation is security. For most of us, the demand for security increases as we age. We start families, sign mortgages, start getting serious about saving for retirement. Viewed in this light, LIFO starts to look like a case of markets doing a remarkably good job of allocation. Employees get security when they value it most and in exchange are willing to work for lower wages. (looks kind of like a win for Adam Smith)
There is, of course, a more immediate need for LIFO in many cases. It is the most effective means of preventing employers from using lay-offs as cover for improper dismissal. The classic example here is punishing employees for their role in a union. This was the issue that so offended Jonathan Chait when the victims were journalists.
Chait's position on teachers was notably different, which is interesting because not only is the potential for the abuse that Chait was implying also a concern for teachers; it is accompanied by other, even greater concerns caused by the nature of teaching and the org charts of schools.
Teachers have three primary roles: instruction; counselling; and evaluation. Because we have a complex, multidimensional, badly defined target variable and some of the nastiest confounded data you'll ever see, every method suggested for measure teacher effectiveness has been either overly-complicated, opaque, unreliable or some combination of the above and all seem to have the potential for gaming by unscrupulous administrators.
An experienced and highly respected superintendent I knew used to tell new teachers, "never trust a superintendent," and while all but one or two of the administrators I have dealt with have been dedicated professionals, I understand where he was coming from. The nastiest politics I have ever seen have been at school board meetings. That's the world administrators have to survive in. If they're successful they can be looking at a plum job in a large (but not huge) district making 170K. If they're inept they can find themselves stuck as assistant principals making little more than they made as teachers.
Put another way, it is entirely possible for a few angry parents and a couple of political missteps to cost a principal fifty thousand or more (possibly quite a bit more). As mentioned before, evaluation is part of a teacher's job and a tough grader will generate more than a few angry parents. This is one of the reasons we have tenure.
Though it's rare, I have seen principals pressure teachers to change the grades of students with influential parents. It is also rare but not unheard of for principals to shift difficult students and unpleasant classes away from allies on the faculty.
Now imagine a system where the principal can arrange, with relatively little effort and no fear of reprisals, for certain teachers to be safe from lay-offs and other teachers to be first in line. I'm sure most principals wouldn't use this unchecked power to put tough graders, independent voices, and strong union supporters in the expendable pile. There would, however, be abuses and the administrators who commit these abuses will have a tremendous advantage in the competitive landscape.
Worse yet, every decision that administrators make will be met with suspicion. Every time a teacher gets a larger than average class with more than the average number of kids with behavior problems, colleagues will wonder if the assignment had something to do with flunking students who blow off their term papers, or pushing for a tough stance in contract negotiation, or just voicing too many concerns in faculty meetings.
Businesses go to great lengths to avoid the atmosphere of distrust and labor/management tension I've just described. For all their talk of looking to business for ideas, advocates of the reform movement don't seem to give these issues much thought.
Next, the different kinds of lay-offs and their implications
Arguments that generalize poorly
If only Megan McArdle would make the same argument for medical care that she does for congestion pricing:
The is a reflection of how conservatives often seem to (oddly) switch sides when the question is one of transportation. Clearly, a single payer medical system is the most fair (see Canada). Canada's single payer system has also got issues with efficiency, being one of the few countries to have worse physician wait times than the United States.
But with health care we always see the reverse argument (efficiency > fairness), which strikes me as an odd mixture of priorities. Or am I missing something?
But that brings us to the heart of the populist argument against congestion pricing, and even express toll lanes, and I think ultimately supports Tim's argument that this is never going to be democratically popular: most people don't pay. And they tend to resent the people who do. It is not an accident that congestion pricing is a system most beloved of people who are a) relatively affluent and/or b) don't drive to work. This tells us empirically why congestion pricing is unlikely to ever get enough political support to be implemented in America. But maybe it also tells us, maybe, why it shouldn't be implemented. Who are we to tell people that they ought to prefer prices to queuing?
The is a reflection of how conservatives often seem to (oddly) switch sides when the question is one of transportation. Clearly, a single payer medical system is the most fair (see Canada). Canada's single payer system has also got issues with efficiency, being one of the few countries to have worse physician wait times than the United States.
But with health care we always see the reverse argument (efficiency > fairness), which strikes me as an odd mixture of priorities. Or am I missing something?
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