Affirmative Action 🤝 '08 Recession

Welcome to your Wednesday dose of Strategy Snacks.

We’re the email that will make you smart enough to BS through a conversation with your boss’s boss.

We’re covering two incredibly important groups of people today:

1. ‘08 and ‘09 College Graduates (Recession Grads)

2. Affirmative Action Graduates (AA Grads)

We’ve been figuring out how to make this story resonate, particularly how it affects us + our readers.

The answer was simple: Career earning potential and financial security

We’re digging in here. Let’s go.

Recession Grads: An Explainer in 3 points

1. ‘08/’09 College grads came into a shitshow economy with sky high unemployment and tough-as-nails job market

2. The economy you graduate into has a lot to do with your long term financial security

3. Recession grads will stand to make (on average) 60k-100k less than robust economy grads

People who are now your Managers/Executive Directors (36-38 years old) were dealt an incredibly shit hand….

so why does that matter to us cute, younger, cocaine addicted ppl?

Here’s the answer:

• Wages were flat for college grads as late as 2018.

• Employment is less secure

• Student loan debt is higher

• Job cuts in ‘08 also meant training cuts, which ultimately led to a shortage of qualified workers and companies slowing down investment in existing employees

Mix a pandemic into that and that’s why you’ve been waiting for your Subaru Forester for 2 years

Affirmative Action: An incomplete version

So we’re going to do this a little differently. Everyone here kinda knows what affirmative action is, so we’re going to tell you about what happened when California ended Affirmative Action in 1996.

• Ending affirmative action led to a drop in underrepresented minority students attending selective universities.

• Students who had less access to selective universities due to the ban earned about 5% less.

• White and Asian students, on average, did not experience a decline in future earnings.

• Black and Hispanic students, on average, benefited more from the education and networks at selective schools.

So what does this mean for the country?

It’s a lot of speculation for now, but here are some things that could happen:  

1. The enrollment of underrepresented minorities could drop.

2.  The income gap between white/Asian and Black/Hispanic/Native American graduates may widen.

Key words are could and may. California is just one state (albeit a huge one), and the AA ban only applied to public universities. As a result of the Supreme Court ruling last week, legacy admissions have also been called into question, so who knows how private colleges may react to this.

Too early to tell.

An interesting nuance: We’re sure you’ve been hearing a lot about Edward Blum the last couple weeks. He’s a big proponent of ending affirmative action, but he’s also a big supporter for ending legacy admissions too.

Bottom Line

While we don’t have a clue what a lack of Affirmative Action looks like in terms of earnings, it doesn’t seem to be wholly positive. You could have larger salary bands across varying markets, which means that companies could decrease the floor of wages for entry/mid-level jobs.

As for the ‘08-’09 recession grads, they’re still playing catching up, so we’re all finding out that market dynamics always beats individual performance.

What AI Created this week:

Have a great week!

Ahmed and Peter