Privately educated still take most top jobs

Although, this article is highlighting a report on British education system & the resultant employment prospects from the private institutions of that education system, this can easily be extended to everywhere around the world.

Private schools, colleges, & universities in US & Canada are similarly regarded as producing highly talented individuals, who then are employed in top jobs. Although, there are no private universities in Canada, yet, but the cost of education in public universities is skyrocketing, & obtaining that education is becoming a luxury for many. The pricier the degree, the more respect it earns from the industry.

It's the same case in developing countries, like Nigeria, South Africa, Brazil, India, Pakistan, etc. Private education system has merely become the profit-making tool for a few industrialists. Public education system has been eroded or the industry sector doesn't favour the graduates of those. Graduates of private education system are highly regarded in the industry, & even there, the more expensive the degree (i.e. IBA & LUMS), the more respect the grad earns, & hence, obtaining that top spot in the industry becomes that much easier.

Of course, this disparity will continue on, even if the private education system starts taking in students on the basis of merit. The reason being that the graduates of these top private schools have strong alumni networks in the top tiers of industry, who pull their fellow graduates up, while leaving behind the graduates of public education system. This "networking" will continue on. Coupled this networking issue in the developed world with the not-so-strong financial situation of the immigrants there, & you can see that immigrants & their children do not make it to the top tiers of the industry in the developed world.

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https://www.rt.com/uk/333491-private-education-top-jobs/

Individuals educated at private schools continue to land the majority of top jobs in leading fields, including law, politics, journalism and the arts ... .

Results published by the Sutton Trust ... show that while the previous decade has shown “small signs” of narrowing inequality levels, often more than 70% of top jobs are given to those who were privately educated.

Only 7% of British youngsters attend private school, but the study showed that 74% of judges and 71% of high ranking military officers attended fee-paying schools.

In journalism, 51% of top print writers were privately educated, as well as 61% of doctors.

Respectively, only 12% of military chiefs were educated in comprehensive schools, and 22% of doctors attended grammar schools. Only one-fifth of leading journalists had a state education.

In politics the gap has narrowed, the report found, with 32% of MPs having attended a private school. But when examining the Tory cabinet, some 50% of the ministers went to independent schools, compared to 13% in Labour’s shadow cabinet.

The report also examined the prevalence of Oxford and Cambridge universities among top ranking positions, and found that alumni from the famous academic institutions were more likely to take high positions.

In law, Oxbridge graduates make up 74% of the top positions, with 54% of journalists having also attended the two universities.

Some 47% of the Conservative cabinet also attended Oxford or Cambridge, more than 10% higher than the shadow cabinet, which features 32% Oxbridge graduates.

The arts is also not exempt from the privately educated/Oxbridge bubble, with award-winning actors and actresses 50% more likely to have had a private education than pop stars. A total of 42% of BAFTA winners were awarded to fee-paying school attendees.

Sir Peter Lampl, chair of the Sutton Trust, said the report showed a need for more social mobility.

“Our research shows that your chances of reaching the top in so many areas of British life are very much greater if you went to an independent school.

“As well as academic achievement, an independent education tends to develop essential skills such as confidence, articulacy and teamwork, which are vital to career success.

“The key to improving social mobility at the top is to open up independent schools to all pupils based on merit not money... as well as support for highly able students in state schools.”

What's the point of college?

This whole piece from New Yorker is a fantastic one. It's quite a long one, so I will keep my blog post on it rather short.

What I like to say here is that I've been saying what this article is saying for, at least, a year or so. Education nowadays doesn't have the same respect or weight as it used to carry about 5 decades ago. For instance, I met an 18-year-old about 6 months ago who said to me that he is learning to be a salesperson, right after graduating from high school, & have no intention to go to post-secondary school, because business education is learned best out in the field than in a class. So, in essence, he will save thousands upon thousands of dollars in education & will ultimately come out ahead because he will have hands-on work experience coupled with a valuable network. (I couldn't reply since my own experiences are not so great).

Everyone, from Canada to Chile to Egypt to South Africa to Spain to Russia to Australia to Saudi Arabia, loves to talk about how education is essential for everyone, regardless to gender, skin colour, language, religion etc. And, in an ideal & utopian world, it definitely will be ... but, we are not living in an ideal & utopian world. Education has become a business in itself. It has become so expensive to even get a 4-year bachelor's degree that families & students take out thousands of student loans to earn that degree.

But after graduation a serious question needs to be asked is that degree, for which I just paid thousands of dollars (or whatever other currency), worth anything? Personally, my 2 degrees, a Bachelor's in Accounting & an MBA, for which I paid about 100,000 Canadian dollars (excluding my time & effort) in total, & 2 certificates (Six Sigma & Project Management) have earned me a job as a cashier in a local superstore. So, for me, my education was definitely not worth it. I would have been better off by not getting an education & spent my time working in retail, for instance. That decade in education would've saved me some hard cold cash & I would've been a supervisor, or even a manager, of a store by now. The article does point out this fact that how highly educated graduates, even STEM graduates (science, tech, engineering, & mathematics), are working in measly jobs, perhaps, due to technological advancements.

So, education is important but we need to look at its worth. The article states examples of colleges & universities, & a lot of statistics & studies, in trying to answer the primary question of the worth of education. Eventually, it asks what is the purpose of colleges & universities, since their graduates, which are constantly increasing in number, are not really earning that much, & their wages are actually falling. This seems counterintuitive since education is supposed to increase your worth, & not decrease it in the labour market.

A theory the article puts forward is that degrees & certificates perhaps try to signal to potential employers the competency of the candidate. Potential employers are thus merely using the degrees as a filter in the hiring process. Perhaps, that is why, "branding" of a university comes into play. Since, everyone around you is getting a degree, if you want to stand out from the crowd, you need to "buy" a degree from a so-called "prestigious" school. Then, it becomes an arms race, & it is only helping educational institutes & financial services companies (i.e. banks) in making huge profits.

Unfortunately, the article stops short of giving a definite reason why this is happening that education is not paying off for many, nowadays. One reason it gives, with which I do agree, is that this blind corporate race of cost-cutting is increasing more tech solutions implementation with fewer graduates being hired to train for future management positions.

One other reason I would give for education not paying off in modern times is the absence of meritocracy. We all like to think that education improves the personal financial bottom line, but we forget, that it will happen only when the labour market is merit based, which it is not. We all have heard of that accursed word, "networking," which merely implies that your education & qualifications matter less if you know the right people in the right places. Nowadays, employers get so many resumes / CVs / bio-datas, which are all essentially similar, too, that instead of sifting through all of them to find that perfect candidate, employers simply ask the people around them to recommend them a candidate.

This disease of "networking" is very common in developing countries because, due to their large population, & in their push for more education, everyone has a similar educational base. But networking is relatively new in Western countries because up until a few years ago, your education still played a major part what job & earning potential you ended up with in your life. It was somewhat of a meritocracy. But not anymore. Networking disrupts a level playing field, since, your education & qualifications are useless in the face of "how many influential people are your / family's friends".

Anyway, my blog post has become a long one & I would prefer it that you read the article, which is still quite informative & thought-provoking. We all like to think that education is essential to succeed in life but we forget that the world is an unfair place, & in the near future, your education will matter less & your connections will matter more.

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http://www.newyorker.com/magazine/2015/09/07/college-calculus

If there is one thing most Americans have been able to agree on over the years, it is that getting an education, particularly a college education, is a key to human betterment & prosperity. ... Already, the cost of higher education has become a big issue in the 2016 Presidential campaign. ...

Promoters of higher education have long emphasized its role in meeting civic needs. The Puritans who established Harvard were concerned about a shortage of clergy; during the Progressive Era, John Dewey insisted that a proper education would make people better citizens, with enlarged moral imaginations. Recently, as wage stagnation & rising inequality have emerged as serious problems, the economic arguments for higher education have come to the fore. “Earning a post-secondary degree or credential is no longer just a pathway to opportunity for a talented few,” the White House Web site states. “Rather, it is a prerequisite for the growing jobs of the new economy.” Commentators & academic economists have claimed that college doesn’t merely help individuals get higher-paying jobs; it raises wages throughout the economy & helps ameliorate rising inequality. In an influential 2008 book, “The Race Between Education and Technology,” the Harvard economists Claudia Goldin & Lawrence F. Katz argued that technological progress has dramatically increased the demand for skilled workers, & that, in recent decades, the American educational system has failed to meet the challenge by supplying enough graduates who can carry out the tasks that a high-tech economy requires. “Not so long ago, the American economy grew rapidly and wages grew in tandem, with education playing a large, positive role in both,” they wrote in a subsequent paper. “The challenge now is to revitalize education-based mobility.”

The “message from the media, from the business community, and even from many parts of the government has been that a college degree is more important than ever in order to have a good career,” Peter Cappelli, a professor of management at Wharton, notes in his informative & refreshingly skeptical new book, “Will College Pay Off?” (PublicAffairs). “As a result, families feel even more pressure to send their kids to college. This is at a time when more families find those costs to be a serious burden.” During recent decades, tuition & other charges have risen sharply—many colleges charge more than 50,000 dollars a year in tuition & fees. Even if you factor in the expansion of financial aid, Cappelli reports, “students in the United States pay about four times more than their peers in countries elsewhere.”

Despite the increasing costs — & the claims about a shortage of college graduates — the number of people attending & graduating from four-year educational institutions keeps going up. In the 2000-01 academic year, American colleges awarded almost 1.3 million bachelor’s degrees. A decade later, the figure had jumped nearly 40%, to more than 1.7 million. About 70% of all high-school graduates now go on to college, & half of all Americans between the ages of 25 & 34 have a college degree. That’s a big change. In 1980, only 1 in 6 Americans 25 & older were college graduates. 50 years ago, it was fewer than 1 in 10. To cater to all the new students, colleges keep expanding & adding courses, many of them vocationally inclined. At Kansas State, undergraduates can major in Bakery Science & Management or Wildlife & Outdoor Enterprise Management. They can minor in Unmanned Aircraft Systems or Pet Food Science. Oklahoma State offers a degree in Fire Protection & Safety Engineering & Technology. At Utica College, you can major in Economic Crime Detection.

In the fast-growing for-profit college sector, which now accounts for more than 10% of all students, vocational degrees are the norm. DeVry University — which last year taught more than 60,000 students, at more than 75 campuses — offers majors in everything from multimedia design & development to health-care administration. On its Web site, DeVry boasts, “In 2013, 90% of DeVry University associate and bachelor’s degree grads actively seeking employment had careers in their field within six months of graduation.” That sounds impressive — until you notice that the figure includes those graduates who had jobs in their field before graduation. (Many DeVry students are working adults who attend college part-time to further their careers.) Nor is the phrase “in their field” clearly defined. “Would you be okay rolling the dice on a degree in communications based on information like that?” Cappelli writes. He notes that research by the nonprofit National Association of Colleges & Employers found that, in the same year, just 6.5% of graduates with communications degrees were offered jobs in the field. It may be unfair to single out DeVry, which is one of the more reputable for-profit education providers. But the example illustrates Cappelli’s larger point: many of the claims that are made about higher education don’t stand up to scrutiny.

“It is certainly true that college has been life changing for most people and a tremendous financial investment for many of them,” Cappelli writes. “It is also true that for some people, it has been financially crippling. . . .The world of college education is different now than it was a generation ago, when many of the people driving policy decisions on education went to college, and the theoretical ideas about why college should pay off do not comport well with the reality.”

No idea has had more influence on education policy than the notion that colleges teach their students specific, marketable skills, which they can use to get a good job. Economists refer to this as the “human capital” theory of education, & for the past 20 or 30 years it has gone largely unchallenged. If you’ve completed a two-year associate’s degree, you’ve got more “human capital” than a high-school graduate. And if you’ve completed a four-year bachelor’s degree you’ve got more “human capital” than someone who attended a community college. Once you enter the labor market, the theory says, you will be rewarded with a better job, brighter career prospects, & higher wages.

There’s no doubt that college graduates earn more money, on average, than people who don’t have a degree. And for many years the so-called “college wage premium” grew. In 1970, according to a recent study by researchers at the Federal Reserve Bank of New York, people with a bachelor’s degree earned about 60,000 dollars a year, on average, & people with a high-school diploma earned about 45,000 dollars. 35 years later, in 2005, the average earnings of college graduates had risen to more than 70,000 dollars, while high-school graduates had seen their earnings fall slightly. (All these figures are inflation-adjusted.) The fact that the college wage premium went up at a time when the supply of graduates was expanding significantly seemed to confirm the Goldin-Katz theory that technological change was creating an ever-increasing demand for workers with a lot of human capital.

During the past decade or so, however, a number of things have happened that don’t easily mesh with that theory. If college graduates remain in short supply, their wages should still be rising. But they aren’t. In 2001, according to the Economic Policy Institute, a liberal think tank in Washington, workers with undergraduate degrees (but not graduate degrees) earned, on average, $30.05 an hour; last year, they earned $29.55 an hour. Other sources show even more dramatic falls. “Between 2001 and 2013, the average wage of workers with a bachelor’s degree declined 10.3 percent, and the average wage of those with an associate’s degree declined 11.1 percent,” the New York Fed reported in its study. Wages have been falling most steeply of all among newly minted college graduates. And jobless rates have been rising. In 2007, 5.5% of college graduates under the age of 25 were out of work. Today, the figure is close to 9%. If getting a bachelor’s degree is meant to guarantee entry to an arena in which jobs are plentiful & wages rise steadily, the education system has been failing for some time.

And, while college graduates are still doing a lot better than nongraduates, some studies show that the earnings gap has stopped growing. The figures need careful parsing. If you lump college graduates in with people with advanced degrees, the picture looks brighter. But almost all the recent gains have gone to folks with graduate degrees. “The four-year-degree premium has remained flat over the past decade,” the Federal Reserve Bank of Cleveland reported. And one of the main reasons it went up in the first place wasn’t that college graduates were enjoying significantly higher wages. It was that the earnings of nongraduates were falling.

Many students & their families extend themselves to pay for a college education out of fear of falling into the low-wage economy. That’s perfectly understandable. But how sound an investment is it? One way to figure this out is to treat a college degree like a stock or a bond & compare the cost of obtaining one with the accumulated returns that it generates over the years. (In this case, the returns come in the form of wages over & above those earned by people who don’t hold degrees.) When the research firm PayScale did this a few years ago, it found that the average inflation-adjusted return on a college education is about 7%, which is a bit lower than the historical rate of return on the stock market. Cappelli cites this study along with one from the Hamilton Project, a Washington-based research group that came up with a much higher figure — about 15% — but by assuming, for example, that all college students graduate in 4 years. (In fact, the four-year graduation rate for full-time, first-degree students is less than 40%, & the six-year graduation rate is less than 60%.)

These types of studies, & there are lots of them, usually find that the financial benefits of getting a college degree are much larger than the financial costs. But Cappelli points out that for parents & students the average figures may not mean much, because they disguise enormous differences in outcomes from school to school. He cites a survey, carried out by PayScale for Businessweek in 2012, that showed that students who attend M.I.T., Caltech, & Harvey Mudd College enjoy an annual return of more than 10% on their “investment.” But the survey also found almost 200 colleges where students, on average, never fully recouped the costs of their education. “The big news about the payoff from college should be the incredible variation in it across colleges,” Cappelli writes. “Looking at the actual return on the costs of attending college, careful analyses suggest that the payoff from many college programs—as much as 1 in 4—is actually negative. Incredibly, the schools seem to add nothing to the market value of the students.”

So what purpose does college really serve for students & employers? Before the human-capital theory became so popular, there was another view of higher education—as, in part, a filter, or screening device, that sorted individuals according to their aptitudes & conveyed this information to businesses & other hiring institutions. By completing a four-year degree, students could signal to potential employers that they had a certain level of cognitive competence & could carry out assigned tasks & work in a group setting. But a college education didn’t necessarily imbue students with specific work skills that employers needed, or make them more productive.

Kenneth Arrow, one of the giants of twentieth-century economics, came up with this account, & if you take it seriously you can’t assume that it’s always a good thing to persuade more people to go to college. If almost everybody has a college degree, getting one doesn’t differentiate you from the pack. To get the job you want, you might have to go to a fancy (& expensive) college, or get a higher degree. Education turns into an arms race, which primarily benefits the arms manufacturers—in this case, colleges & universities.

The screening model isn’t very fashionable these days, partly because it seems perverse to suggest that education doesn’t boost productivity. But there’s quite a bit of evidence that seems to support Arrow’s theory. In recent years, more jobs have come to demand a college degree as an entry requirement, even though the demands of the jobs haven’t changed much. Some nursing positions are on the list, along with jobs for executive secretaries, salespeople, & distribution managers. According to one study, just 20% of executive assistants & insurance-claims clerks have college degrees but more than 45% of the job openings in the field require one. “This suggests that employers may be relying on a B.A. as a broad recruitment filter that may or may not correspond to specific capabilities needed to do the job,” the study concluded.

It is well established that students who go to elite colleges tend to earn more than graduates of less selective institutions. But is this because Harvard & Princeton do a better job of teaching valuable skills than other places, or because employers believe that they get more talented students to begin with? An exercise carried out by Lauren Rivera, of the Kellogg School of Management, at Northwestern, strongly suggests that it’s the latter. Rivera interviewed more than a hundred recruiters from investment banks, law firms, & management consulting firms, & she found that they recruited almost exclusively from the very top-ranked schools, & simply ignored most other applicants. The recruiters didn’t pay much attention to things like grades & majors. “It was not the content of education that elite employers valued but rather its prestige,” Rivera concluded.

If higher education serves primarily as a sorting mechanism, that might help explain another disturbing development: the tendency of many college graduates to take jobs that don’t require college degrees. Practically everyone seems to know a well-educated young person who is working in a bar or a mundane clerical job, because he or she can’t find anything better. Doubtless, the Great Recession & its aftermath are partly to blame. But something deeper, & more lasting, also seems to be happening.

In the Goldin-Katz view of things, technological progress generates an ever-increasing need for highly educated, highly skilled workers. But, beginning in about 2000, for reasons that are still not fully understood, the pace of job creation in high-paying, highly skilled fields slowed significantly. To demonstrate this, 3 Canadian economists, Paul Beaudry, David A. Green, & Benjamin M. Sand, divided the US workforce into a hundred occupations, ranked by their average wages, & looked at how employment has changed in each category. Since 2000, the economists showed, the demand for highly educated workers declined, while job growth in low-paying occupations increased strongly. “High-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers,” they concluded, thus “pushing low-skilled workers even further down the occupational ladder.”

Increasingly, the competition for jobs is taking place in areas of the labor market where college graduates didn’t previously tend to compete. As Beaudry, Green, & Sand put it, “having a B.A. is less about obtaining access to high paying managerial and technology jobs and more about beating out less educated workers for the Barista or clerical job.” Even many graduates in science, technology, engineering, & mathematics—the so-called STEM subjects, which receive so much official encouragement—are having a tough time getting the jobs they’d like. Cappelli reports that only about a fifth of recent graduates with STEM degrees got jobs that made use of that training. “The evidence for recent grads suggests clearly that there is no overall shortage of STEM grads,” he writes.

Why is this happening? The short answer is that nobody knows for sure. One theory is that corporate cost-cutting, having thinned the ranks of workers on the factory floor & in routine office jobs, is now targeting supervisors, managers, & other highly educated people. Another theory is that technological progress, after favoring highly educated workers for a long time, is now turning on them. With rapid advances in processing power, data analysis, voice recognition, & other forms of artificial intelligence, computers can perform tasks that were previously carried out by college graduates, such as analyzing trends, translating foreign-language documents, & filing tax returns. In “The Second Machine Age” (Norton), the M.I.T. professors Erik Brynjolfsson & Andrew McAfee sketch a future where computers will start replacing doctors, lawyers, & many other highly educated professionals. “As digital labor becomes more pervasive, capable, and powerful,” they write, “companies will be increasingly unwilling to pay people wages that they’ll accept, and that will allow them to maintain the standard of living to which they’ve been accustomed.”

Cappelli stresses the change in corporate hiring patterns. In the old days, Fortune 500 companies such as General Motors, Citigroup, & I.B.M. took on large numbers of college graduates & trained them for a lifetime at the company. But corporations now invest less in education & training, &, instead of promoting someone, or finding someone in the company to fill a specialized role, they tend to hire from outside. Grooming the next generation of leadership is much less of a concern. “What employers want from college graduates now is the same thing they want from applicants who have been out of school for years, and that is job skills and the ability to contribute now,” Cappelli writes. “That change is fundamental, and it is the reason that getting a good job out of college is now such a challenge.”

Obtaining a vocational degree or certificate is one strategy that many students employ to make themselves attractive to employers, &, on the face of it, this seems sensible. If you’d like to be a radiology technician, shouldn’t you get a B.A. in radiology? If you want to run a bakery, why not apply to Kansas State & sign up for that major in Bakery Science? But narrowly focussed degrees are risky. “If you graduate in a year when gambling is up and the casinos like your casino management degree, you probably have hit it big,” Cappelli writes. “If they aren’t hiring when you graduate, you may be even worse off getting a first job with that degree anywhere else precisely because it was so tuned to that group of employers.” During the dot-com era, enrollment in computer-science & information-technology programs rose sharply. After the bursting of the stock-market bubble, many of these graduates couldn’t find work. “Employers who say that we need more engineers or IT grads are not promising to hire them when they graduate in four years,” Cappelli notes. “Pushing kids into a field like health care because someone believes there is a need there now will not guarantee that they all get jobs &, if they do, that those jobs will be as good as workers in that field have now.”

So what’s the solution? Some people believe that online learning will provide a viable low-cost alternative to a live-in college education. ... Another approach is to direct more students & resources to two-year community colleges & other educational institutions that cost less than four-year colleges. President Obama recently called for all qualified high-school students to be guaranteed a place in community college, & for tuition fees to be eliminated. Such policies would reverse recent history. In a new book, “Learning by Doing: The Real Connection between Innovation, Wages, and Wealth” (Yale), James Bessen, a technology entrepreneur who also teaches at Boston University School of Law, points out that “the policy trend over the last decade has been to starve community colleges in order to feed four-year colleges, especially private research universities.” Some of the discrepancies are glaring. Richard Vedder, who teaches economics at Ohio University, calculated that in 2010 Princeton, which had an endowment of close to fifteen billion dollars, received state & federal benefits equivalent to roughly 50,000 dollars per student, whereas the nearby College of New Jersey got benefits of just 2,000 dollars per student. There are sound reasons for rewarding excellence & sponsoring institutions that do important scientific research. But is a twenty-five-to-one difference in government support really justified?

Perhaps the strongest argument for caring about higher education is that it can increase social mobility, regardless of whether the human-capital theory or the signalling theory is correct. A recent study by researchers at the Federal Reserve Bank of San Francisco showed that children who are born into households in the poorest fifth of the income distribution are 6 times as likely to reach the top fifth if they graduate from college. Providing access to college for more kids from deprived backgrounds helps nurture talents that might otherwise go to waste, & it’s the right thing to do. (Of course, if college attendance were practically universal, having a degree would send a weaker signal to employers.) But increasing the number of graduates seems unlikely to reverse the over-all decline of high-paying jobs, & it won’t resolve the income-inequality problem, either. As the economist Lawrence Summers & two colleagues showed in a recent simulation, even if we magically summoned up college degrees for a tenth of all the working-age American men who don’t have them—by historical standards, a big boost in college-graduation rates—we’d scarcely change the existing concentration of income at the very top of the earnings distribution, where C.E.O.s & hedge-fund managers live.

Being more realistic about the role that college degrees play would help families & politicians make better choices. It could also help us appreciate the actual merits of a traditional broad-based education, often called a liberal-arts education, rather than trying to reduce everything to an economic cost-benefit analysis. “To be clear, the idea is not that there will be a big financial payoff to a liberal arts degree,” Cappelli writes. “It is that there is no guarantee of a payoff from very practical, work-based degrees either, yet that is all those degrees promise. For liberal arts, the claim is different and seems more accurate, that it will enrich your life and provide lessons that extend beyond any individual job. There are centuries of experience providing support for that notion.”

How the 'poshness test' is denying working-class people top jobs

A few months ago, I blogged about how universities in US are laying out the red carpet for children of rich parents. That is skewing the education paradigm in favour of the rich. Well, this news from the UK is highlighting how the social favouritism for the rich doesn't stop at the school but continues on to working lives.

Now, this news may surprise that lot in the world, who think that there is merit & fairness in the Western world. In the Western world, most jobs, & definitely the good ones, are only available through the "power of Networking." Of course, employees of certain socio-economic background keep similar friends, & hence, when the boss says that a vacancy is coming up in a department (marketing, finance, human resources etc.), employees tell their friends (who are like them) about that vacancy.

Eventually, people of a certain socio-economic background end up in the same company. Promotions take place from that employee pool. And then, those people hire the same; other people in their own image. After all, it's just human psychology that we like other people who seem similar to us; in values, in finances, in habits, in education etc.

So, of course, the good jobs in the top firms will go to the people who are of a certain "posh" class. It doesn't matter what education or how good a person was in school, anymore; it all comes down to who you are friends with, nowadays. This is the case everywhere around the world.

At the end of the day, the so-called "modern" society is going back to the days of dark ages, when the few select elites of the society used to have everything in the society working for them; from politics to finances to education and work for their kids.
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http://www.independent.co.uk/news/uk/home-news/poshness-test-is-the-new-glass-ceiling-lack-of-wealthy-background-denies-working-class-people-top-10319541.html

Thousands of working-class people are being denied jobs at top firms, as they effectively need to pass a “poshness test” to join elite employers, according to the official body set up by the Government to promote social mobility.

Executives are more likely to judge potential recruits by how they speak than by how well they might do the job, research by Alan Milburn’s Social Mobility & Child Poverty Commission found.

Its review shows that more than two-thirds of the job vacancies in elite legal & City firms are filled by university graduates who have been through private or grammar schools. By comparison, nearly 90% of schoolchildren have a comprehensive education, compared to just 7% attending fee-paying schools & 4% going to selective grammar schools.

Discrimination comes about because the managers who conduct job interviews do not like working-class accents, the commission reported, but are impressed by young people who have travelled widely, which naturally favours those from well-off families.

One employer frankly admitted his firm’s recruitment practices were loaded against young working-class applicants. But, he asked: “How much mud do I have to sift through in that population to find that diamond?”

Even when a working-class youth is on first rung of the ladder, he or she is likely to be passed over for promotion because of “the tendency of more senior professionals to promote in their own image & thus ‘misrecognise’ merit,” the commission said.

“This research shows that young people with working-class backgrounds are being systematically locked out of top jobs,” said Mr. Milburn, the former Labour Cabinet minister who chairs the commission. “Elite firms seem to require applicants to pass a ‘poshness test’ to gain entry. Inevitably that ends up excluding youngsters who have the right sort of grades & abilities but whose parents do not have the right sort of bank balances.

“Thankfully, some of our country’s leading firms are making a big commitment to recruit the brightest & best, regardless of background. They should be applauded. But for the rest this is a ‘wake up & smell the coffee’ moment. “In some top law firms, trainees are more than 5 times likely to have attended a fee-paying school than the population as a whole. They are denying themselves talent, stymieing young people’s social mobility & fuelling the social divide that bedevils Britain. ”

The “poshness test” is one way in which Britain’s social divide is widening, despite the rise in the number of professional jobs, which is expected to increase by 2 million in the next 5 years.

Research has previously shown that graduates whose parents can support them while they do unpaid work have a marked advantage, because almost a third of graduates recruited for full-time jobs in the top firms have already worked for them, usually as unpaid interns. It has also been found that most major firms tend to recruit graduates from just 19 universities.

The commission, which advises the government on social mobility, has examined the recruiting history of 13 elite firms employing 45,000 of Britain’s highest paid professionals.

They concluded that the recruiting practices are now so skewed in favour of “poshness” that many of the firms’ own senior executives would have not been hired under the criteria now used.

Between 60% & 70% of job offers made by the leading accountancy firms are to graduates of the 24 leading universities that make up the Russell Group.
...

But on a positive note, some firms have acknowledged that A-level results are not always a good indicator of performance, & have stopped taking them into account. In one firm that was studied, more than 10% of recruits would have failed if they had been judged on their school results.

Dr. Louise Ashley, of Royal Holloway, University of London, who led the research, urged firms to recruit from a wider range of applicants, & make sure that those from “diverse” backgrounds were not at a disadvantage. “Selection processes which advantage students from more privileged backgrounds remain firmly in place,” she said.

Ontario employers cashing in on temporary workers

Since, I've posted & blogged these kinds of news stories quite a few times (Aug, Sept), I don't have much to say here.

When people tell me that take a temporary / contract job & it will turn into a permanent job later (I don't know how they know that), my answer is that there's a high chance that the job won't turn into a permanent one. After all, what incentive the company has to hire a worker, on a permanent basis, & pay for his/her health insurance & pension expenses, when the same worker can be kept on a temporary basis, indefinitely, & still get the job done, without any pension & benefits expenses for the company.

Another question I have for people who advocate "networking" is why are there 340,000 temp workers & there is a 33% increase in temporary workers, in the past decade (2004 - 2014), when all these people could've done "networking" to get a permanent job. Are all these people stupid, too timid, or unsocial to not know how to network? Networking is useless if you don't have influential family members or close friends in your circle, who are willing to bat for you.

I do see that there is an explosion in the Employment agencies in Ontario, & all over Canada, & the amount of money in this industry is obscene. With the commissions these employment agencies pay out to their workers, 6-figure salaries are common. People who are earning these 6-figure salaries have neither worked for years in the industry or have multiple relevant degrees & designations. That's why, I also see CAs & MBAs working in employment agencies now, because there's far more money in this industry than they will ever earn anywhere else.

But all this money is being earned by trampling on the workers' & human rights of thousands of other individuals. Many people choose the path of employment agencies only when they don't have any other option of getting a job. They all hope to get a permanent job one day. But, the way the contracts are structured, companies are also discouraged to hire temp & contract workers on a permanent basis. For instance, the one-time fees a company has to pay to hire a worker from a temp agency on a permanent basis are hefty.

All in all, everyone is making money & earning huge benefits at the expense of the small guy who has no rights. I thought that only happened in developing countries where rich control everything & the poor, small guy is pushed around.
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http://www.thestar.com/news/gta/2015/05/10/ontario-employers-cashing-in-on-temporary-workers.html

For more than 5 years, 61-year-old Angel Reyes has woken up 5 days a week at 3 a.m. & braced himself for 8 hours of hauling garbage at a Toronto recycling plant.

The university-educated refugee is the longest-serving worker on the floor, hired through a temp agency more than half a decade ago.

Half a decade &, technically, still a temp.

Half a decade earning minimum wage, never having seen a raise.

Half a decade, & still paid less per hour than his permanent colleagues for doing the same job.

Half a decade, & still no benefits.

Half a decade, & still no obligation for his employer to hire him permanently.

“If hell exists, that is hell,” says Reyes, a father of 3 who came to Canada in 1993 after he was kidnapped & imprisoned in El Salvador for — ironically — lobbying for workers’ rights.

Under Ontario’s antiquated Employment Standards Act, which is currently under review, there is no limit on how long a company can employ a worker as temporary before giving him or her a permanent job.

There is nothing to stop employers from paying temp workers less than their permanent counterparts, nothing to prevent them from hiring their entire workforce on a “temporary” basis if they so choose.

“If the employer knows that they can hire you & they don’t have to give you benefits, they don’t have to give you a pension, they can hire you for a lot less, there’s no incentive for them to hire permanently. Why would they?” says Deena Ladd, who heads the Toronto-based labour rights group the Workers’ Action Centre.

“The biggest issue is the lack of respect & dignity in (temporary) work. Nobody is seeing them for who they are & the work that they’re doing. They are completely invisible.”

In Toronto, their ranks are growing, with temporary workers outpacing permanent ones at twice the rate, their wages significantly lower.

Over the past decade, there has been a 33% increase in the number of temporary workers in Toronto, to more than 340,000 in 2014 from 256,000 in 2004, according to Statistics Canada. Industries such as food manufacturing, transportation & health care saw some of the biggest jumps.

By contrast, the number of permanent employees increased by just 12% over the same period.

Not all temporary workers are hired through agencies; many are hired directly on fixed-term contracts. Statistics Canada figures don’t differentiate between temp agency workers & direct hires.

Still, Ontario’s temp agency industry is flourishing. The province’s employment services sector earned $5.7 billion in revenue in 2012, a near 72% jump from 2002. Temporary agencies account for an estimated 60% of that industry’s total revenue.

Temp agencies are responsible for paying a worker their wages, which they bill the company for, & also take care of statutory entitlements such as Canada Pension Plan, injury pay & vacation pay. The agencies charge their client companies a fee for each assignment to cover all of these costs.

The hourly rate paid to the temp agency for an assignment can be as much as double the worker’s wage. Temp agencies are not required under the Employment Standards Act to tell workers how much they are charging the company per hour to employ them.

Toronto resident Antoinette Schokman-De Zilva, 66, a retired former executive assistant who worked numerous placements through temp agencies, says she was shocked to discover on one assignment that the company was paying the temp agency almost double her hourly wage.

“If I’m paid $20 an hour, they’re charging $45 from the company,” she says.

For some employers, temp agencies help match them with high-level, specialized workers.

But for many others, using temp agencies is part of what the action centre’s Ladd calls a “cheap wage strategy” to keep costs low & responsibilities, such as health benefits & pensions, to a minimum.

Figures provided to the Star by Statistics Canada show that the median wage of a temporary worker in Toronto is just $15 an hour, while permanent employees make $22.40 — a pay gap of 33%.

The gap is even wider for male temps in non-unionized workplaces, who make a median hourly wage of just $13.50. Their permanent counterparts make 40% more, at $22.50 an hour.

Ontario has made some recent strides toward reform, such as giving workers the right to receive public holiday pay & one weeks’ termination notice. But other countries have done more to protect temporary workers from unequal pay & long-term temp work.

In the U.K., temp workers are entitled to receive the same pay as permanent workers in equivalent positions after 3 months on the job.

In Italy, temporary positions automatically become permanent after 36 months in the same assignment.

And in Australia, employers who hire temps must pay them a 15% to 25% premium on their hourly wage in recognition that such workers rarely receive benefits.

But while Ontario’s Employment Standards Act mandates pay equity between men & women, there are no provisions to protect workers from pay discrimination based on their temporary employment status.

Reyes, for example, says permanent employees at his plant make more than him when they start, plus receive benefits, while he still earns minimum wage after more than 5 years on the job as a temp. The only time his salary increased was when the government raised the minimum wage to $11 an hour.
...

The repercussions of endless temp agency work for some of the province’s most vulnerable workers are more than financial.

A 2013 study by the Toronto-based Institute for Work & Health, which conducted interviews with more than 60 low-wage temp agency workers, industry experts & employers in Ontario, concluded that poor oversight & intense competition between agencies put temporary workers at greater risk of work injury than their permanent counterparts.

Ellen MacEachen, the report’s lead author, says workers told her they felt powerless to complain about poor work conditions because they knew they were replaceable & feared losing even poorly-paid jobs.

“Workers who have job insecurity will take care to protect their jobs, & that can often mean trying not to complain about anything,” she says.

Since the Workplace Safety & Insurance Act recognizes temp agencies as the sole employer of their workers, companies can also keep a clean WSIB record if temp agency workers are injured on the job.

“No one is looking out for them,” says the action centre’s Ladd. “You have a perfect environment for a complete deterioration of health & safety, wages, & working conditions.”

Mary McIninch, director of government relations at the Association of Canadian Search, Employment & Staffing Services, which represents more than 1,000 employment agencies including temps, says her members actively maintain a voluntary code of ethics. She describes them as “the most reputable, credible firms in the industry.”

The association has supported some government measures to give temp workers rights, McIninch says, but adds it would oppose reforms like pay parity.

She says “a strong majority” of her members place workers in highly paid positions, & that workers are compensated according to skill & experience.

“We have so many positive testimonials from new Canadians & students,” she told the Star, calling the example of Angel Reyes “not representative of the majority of workers in the industry.”

“I think if that were representative of even a strong minority, I doubt very much that as many individuals that we see — over 300,000 across the country — would continue to use our members’ services,” she adds.

But former temp worker Schokman-De Zilva, who immigrated to Toronto from Sri Lanka in 1989, says she only turned to agency jobs when permanent ones were not available, hoping they would lead to stable employment.

They never did.

“They just threw the contract in my face when I protested,” she says. “And that was it.”
Despite the recent government reforms, people like Reyes are still falling through the cracks.
For him, life at a drafty, dust-filled recycling plant may not be glamorous, but a job is a job.
...


Proposed solutions

A recent report by the Workers’ Action Centre makes a number of recommendations to tackle the widening disparity between permanent employees & temporary agency workers. These include:

• Requiring companies to pay temps the same wages & benefits as permanent staff in equivalent positions.

• Requiring temporary agencies to tell workers how much they are charging a company per hour for an assignment.

• Instituting a six-month limit on temporary assignments, after which temps must be directly hired by the company.

• Scrapping a provision that allows temp agencies to charge companies a fee if they give temps permanent jobs in the first 6 months of work.

• Limiting how many workers in a single company can be temporary agency employees (no more than 20%).

US & Israel inequality champions of developed world - OECD

So, the wealth gap keeps increasing, or in other words, it keeps getting worse ... not in North Korea or China or one of those Middle Eastern monarchies, but in the world's biggest champion of free market & capitalism; US.

In US, the richest 10% of the population earn 16.5 times as much as the poorest 10%. On top of that, the top 5% of American households own almost 91 times the wealth of the average American household.

OECD report cites the reasons for this rising wealth gap to education levels of rich & poor, rise of non-standard work (temporary & self-employment work), & faulty tax systems & erosion of social benefits. Let's examine each of them.

Difference in education is going to increase the wealth gap. But what the OECD didn't look into is that education, in itself, has become so expensive that obtaining an under-graduate degree now requires a fortune, esp. from a good, respected university. Rich kids are supported by their fathers' wealth while they are getting that education, but a poor kid cannot lean on his parents (assuming he/she has one or both) for tuition. Rich kids graduate with no debt to be repaid, but masses of poor kids graduate with mountains of education debt or student loan.

On top of that, education in itself is not going to land one in the higher echelons of corporate America, where they will be paid 6-figure salaries & numerous chances of upward mobility in the corporate hierarchy. Nowadays, it's the age of networking. Of course, rich kids will have that powerful network to lean on, whereas, poor kids are outside of that powerful social circle. So, even when, kids of both social classes have equal education, they are still unequal due to debt levels & network.

That leads to the next point that the rise of non-standard work is due to rising hordes of poor students graduating with degrees but without any network. So, they may still get a job in a company but at the lowest level of corporate hierarchy. If & when the company plans to cut down its costs, the lower rungs of the corporate ladder are cut loose first. Since, those people need the money & have few options, if any, other than keep working with whatever companies are offering them, they accept temporary work & self-employment. Wealthy people have financial & influential networks to pull them into the upper echelons of the corporate world & hence, their jobs never get slashed.

Tax systems are made by legislators, who, in turn, are controlled & influenced by rich people of the country. Since, the rich didn't become rich by handing out their money, they will never willingly ask any legislator to increase taxes on them. So the tax systems will never change for the better. They may become worse, though, for the poor.

Social benefits are usually tied to permanent jobs & higher taxes. Since, permanent jobs are being cut, in favour of temporary work, & taxes will never be raised to help the poor populace, social benefits are only going to be reduced.

So, the question is; will this wealth gap ever reduce? My resounding answer is: NO, IT WILL NOT. Why?

Because, education is only going to get expensive. Good, secure, high-paying, permanent jobs will only go to people with influential networks. Tax systems will only become worse for the poor (& better for the rich), since when politicians have ever tried to upset the hand which feed them (rich business elites). Social benefits are only to be eroded to the point where bare minimums will still be available, but the vast majority of poor won't qualify for most social benefits.

Then, there will be revolutions on the streets, similar to Occupy Wall Street protests, except they will be bloodier & far more violent than the preview the world got back in 2008. Remember the French Revolution. OECD developed countries are going back into that era of a club of rich elites controlling almost all wealth of the nation & their citizenry. History is going to repeat itself.
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http://www.rt.com/business/260965-inequality-gap-highest-level/

“In most countries, the gap between rich & poor is at its highest level since 30 years. Today, in OECD countries, the richest 10% of the population earn 9.6 times the income of the poorest 10%,” said the Organization for Economic Cooperation & Development (OECD) in a report ... . “In the 1980s this ratio stood at 7:1 rising to 8:1 in the 1990s & 9:1 in the 2000s.”

Compare the average 9.6 index with the US, where the richest 10% of the population earn 16.5 times as much as the poorest 10%. The poorest citizens of Israel scrape by on one-fifteenth of the earnings of the richest 10%.

The US also has the widest gap between the income of the richest & the average households. The top 5% of US households own practically 91 times the wealth of the average.

The OECD report, covering the situation in 18 member nations, says half of total wealth resides in the hands of just 10% of population, while the next 50% hold almost all of the second half, leaving the remaining 40% with the scraps - just over 3% of the wealth.

The record level of inequality is explained partly by a wider gap in education between the richest & poorest social groups, leading to lower quality & productivity in the workforce.

Another factor that OECD considers responsible for growing inequality is the growth in what it calls non-standard work, which includes temporary contracts & self-employment.

Since the mid-’90s more than half of all new jobs created in OECD countries fell into this category, according to the report. Families that rely on this type of employment are much more likely to be poor, exacerbating overall inequality.

OECD experts warn that the rising level of inequality is hampering world economic growth.

“High & often growing inequality raises major economic concerns, not just for the low earners themselves, but for the wider health & sustainability of our economies,” the report says. “Put simply: rising inequality is bad for long-term growth.”

The report also cites increasingly less progressive tax systems & social benefits losing ground to inflation as reasons why income redistribution schemes have become less effective as of late. Instead, the study advocates a more direct system of taxation & transfer.

“Redistribution via taxes & transfers is a powerful instrument to contribute to more equality & more growth,” the report says.

It also mentions the increasing number of working women as one of the factors contributing to the growth in inequality. Women earn 15% less than men, according to the report, which says ensuring equal pay for men & women could be one way to reduce the wealth gap.

Latin America is one of the few regions where inequality hasn’t been growing in the last 30 years, despite the social gap there being initially higher, the OECD said.

Half of Toronto-area workers have fallen into 'precarious employment'

Although, this is a good informative piece & confirms my thinking that job situation in Canada keeps going downhill, I still come across people who work in career offices (employment agencies, government human resources centers, & university career offices) who think completely different, i.e. that there's nothing wrong with labour market of Canada & everything is on the up.

Those people have usually one suggestion: networking. Do networking.

I'm dumbfounded with that suggestion because I understand that networking is very important to have access to that hidden job market but then are all these millions of job seekers in Toronto & all over Canada are socially inept people that they aren't / can't network?

I can accept that perhaps, I am not the greatest person to make friends with people & network easily. But I can't accept that all these millions of people are similar to me on the social gauge. So, if they are not like me & most of them must be much more social than me, then why are they having problems landing a secure, permanent, good-paying job?

Part of my answer goes back to my previous blog post (of Robocops coming to Dubai by 2017) that with the help of automation & robotics, the bar of secure & permanent jobs in every category & profession is constantly rising. Although, the piece says that trends of changes in labour market cannot be predicted & can come suddenly, I say that they are actually predictable & can be seen from miles afar. For instance, hotel staff jobs will be going away within the next 10-20 years, thanks to the introduction of robot staff at Henn na hotel in Japan. Or the jobs of taxi drivers, truck drivers & chauffeurs are already in jeopardy, thanks to self-driving trucks, cars, & even Uber.

Although, the piece talks about politicians & institution leaders getting their heads together & make better policies in the areas of labour relations, employment, pay structures etc., I'd say that that's a useless suggestion.

We know politicians are controlled by rich business elites. Rich business elites didn't become rich by giving away money to poor through better pay structure, providing training & development, & hiring humans, instead of not automating their jobs. A business person will always look for efficiency & cost-cutting measures, & automating a job achieves both objectives.

Networking is useless if there are no influential people in your network to pull you in the upper echelons of a business or an organization. Because if you are a young individual & not at the top of the organization, & if there's no scope of you climbing higher quickly, even if you starts at the bottom of the organizational hierarchy, then your permanent job is already at jeopardy. You may get hired on contract or temporary basis later on in life, but not permanent. At that point in your life, you won't have time to go back to school to re-educate yourself & re-orient your ship of life.

Is this labour market situation unique to Canada where more & more people are falling into precarious employment? Sort of. Because, Canadian industries are mostly focused on fossil fuels & minerals extractions. Governments cannot do much since companies do come in Canada with the help of tax subsidies but then as soon as they realize their tax advantages, they go back to a low-cost area. Governments cannot intervene heavily since that would amount to dictatorship & governments' undue influences. That would go against the free market mantra of the West.

This labour market situation of more people falling into precarious employment is same in US & Europe. Germany & France engineered the European Union to increase their own employment & labour market situation. But, it was at the detriment of other countries which could not export & had to import German & French products, which in the end, put a huge dent in their labour markets. After all, somebody's GDP must decrease so someone else's increases.

Root of the problem of these labour market problems is that Western governments always acted reactionary, instead of proactively, to where the world was moving. North American countries didn't market technical professions (those jobs are plentiful now with good salary prospects, but not enough job seekers) or they pushed for dismemberment of unions, even though, they are the ones to push for higher wages. North American countries didn't, & still aren't, pushing for green technologies, which can help hire more people in secure, permanent jobs.
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http://www.theglobeandmail.com/globe-debate/columnists/half-of-toronto-area-workers-have-fallen-into-precarious-employment-study/article9003680/

In just a few short decades Canada’s labour market has changed dramatically. The widely held belief that employment leads to economic security & social well-being has become out-of-step with an increasing number of people in today’s work force.

Research ... by McMaster University & United Way Toronto provides new insights into just how much the labour market in Southern Ontario has changed. Barely half of people working in the Greater Toronto & Hamilton areas have permanent, full-time jobs that provide benefits & stability. Everyone else is working in situations that are part-time, vulnerable or insecure in some way. This includes a growing number of temporary, contract & on-call positions. Jobs without benefits. Jobs with uncertain futures. This significant rise in precarious employment is a serious threat – not only to the collective prosperity of the region, but also to the social fabric of communities.

Beneath this finding is another surprise: precarious employment is hurting everyone. It’s found across all demographic groups, in every sector & across income levels that were previously immune. Having a middle-class income can now come with increased employment insecurity.

It is now common for many workers to piece together year-round, full-time hours by working multiple jobs. In addition, working conditions are more uncertain, as existing labour laws have not kept up with changing realities. Union membership is on the decline. Doors to opportunity are limited as opportunities for job training & development decline.

While we know that being precariously employed is worst when you’re living in low income, our research confirms this increasingly is an issue that affects people at every income level. Moreover, uncertainty about work is a major barrier for anyone planning for the future. People find it more difficult to chart a clear & stable path in their careers & are consequently delaying significant life plans, such as whether to start a family, because they feel insecure about their futures. Among parents, making plans, scheduling activities & spending time together as a family becomes much more difficult. The stress & pressure of being precariously employed is also more likely to lead to feelings of self doubt & anxiety.

Just as important, our study also found that job insecurity is about more than just poverty. Its impacts are far-reaching, affecting all parts of our lives, redefining how we contribute to our economy, give back to our community & interact with our families. Precarious work can make it more difficult to make ongoing volunteer commitments & donate to charities. Across all income levels, insecurity makes it less likely that people will have vital social networks, such as friends to talk to.

Trends that have caused nearly half of our work force to engage in insecure employment show no signs of slowing down. Among study respondents, even those who describe their current employment as permanent are aware that change can come suddenly & unexpectedly.

The question now is: How should we respond to this shifting climate? While the global nature of our economy can sometimes make it feel like change is beyond our control, policy paralysis is not an option. We have a variety of tools within our reach to effectively limit the spread of insecure employment & mitigate its negative effects.

The way forward is to confront these trends, assess how current labour market regulations & income security policies are supporting people in precarious employment, & explore options for making them more responsive. It’s time for a conversation that brings together the private sector, labour organizations, community groups & all levels of government in a discussion about how together we can mitigate the negative effects of precarious employment.

Raising incomes is an obvious & critical area of focus, but it is not enough. The reality that workers in precarious employment tend to exit & re-enter the labour market much more often than those in permanent employment requires a renewed look at basic employment standards & protections as well as revamped income security programs.

More attention also needs to be given to how we can best support human capital development so that our work force remains innovative & competitive. Training & education models with a life-long learning focus can help workers build the skills to continuously improve their employment prospects.

Family supports, such as early learning & child care, accessible recreation & settlement programs, & affordable housing are also keys to maintaining healthy households & building a stronger sense of community.

What we need today is a renewed public policy framework that will be supportive of those in precarious employment & responsive to the challenges associated with this shifting labour market. Given this reality, it’s crucial that we all work together, governments, employers, labour & other stakeholders, to identify common ground & advance a shared agenda for real & sustainable progress.


Susan McIsaac is president & CEO of United Way Toronto, Charlotte Yates, is dean at the faculty of social sciences at McMaster University.