Posts tagged ‘East Coast’

SAT Scores Are Bad Education Evaluation Data

I am happy to see the public school system coming in for much-deserved criticism.  I don't have anything to add to this article that I have not already said about schools many times.  But I want to make one complaint about a chart used in the blog post:



SAT scores are a terrible metric for measuring academic performance over time.

First, I am not at all convinced that the test scoring does not shift over time (no WAY my son had a higher score than me, LOL).

But perhaps the most important problem is that all students don't take the SAT -- it is a choice.  Shifts in the mix of kids taking the test -- for example, if over time more kids get interested in college so that more marginal academic kids take the test -- then the scores are going to move solely based on mix shifts.  Making this more complicated, there is at least one competitive test (the ACT) which enjoys more popularity in some states than others, so the SAT will represent an incomplete and shifting geographic mix of the US.  Finally, as students have gotten smarter about this whole process**, they gravitate to the ACT or the SAT based on differing capabilities, since they test in different ways.

To me, all this makes SAT scores barely more scientific than an Internet poll.

** If you have not had a college-bound student recently, you will have to trust me on this, but parents can spend an astounding amount of time trying to out-think this stuff.  And that is here in flyover country.  Apparently private school parents on the East Coast can be absurd (up to and including hiring consultants for 6 figures).  A few years ago it was in vogue to try to find your kid a unique avocation.  Violin was passe -- I knew kids playing xylophone and the bagpipes.  A friend of mine at a high profile DC private school used to have fun with other parents telling them his son was a national champion at falconry, the craziest thing he could make up on the spur of the moment at a cocktail party.  Other parents would sigh enviously, wishing they had thought of that one for their kid.

A Note to the East Coast

For all you hipster large and small towns in the northeast who have taken great pride in banning big box stores like Wal-Mart and Home Depot, good luck rebuilding after the storm.  I am sure you are going to be really happy that you banned retail establishments with worldwide logistics resources and that have developed special skills in routing supplies needed for post-storm cleanup.  Good luck getting a generator from that boutique hardware store you have been protecting.

Credentialism: A Problem that Cuts Both Ways

From the Chronicle of Higher Education via TaxProf Blog

If you want to get a job at the very best law firm, investment bank, or consultancy, here’s what you do:

1. Go to Harvard, Yale, Princeton, or (maybe) Stanford. If you’re a business student, attending the Wharton School at the University of Pennsylvania will work, too, but don’t show up with a diploma from Dartmouth or MIT. No one cares about those places. ... That’s the upshot of an enlightening/depressing study about the ridiculously narrow-minded people who make hiring decisions at the aforementioned elite companies. ... These firms pour resources into recruiting students from “target schools” (i.e., Harvard, Yale, Princeton) and then more or less ignore everybody else. Here’s a manager from a top investment bank describing what happens to the resume of someone who went to, say, Rutgers: “I’m just being really honest, it pretty much goes into a black hole.”

Being, I suppose, an insider to this process (Princeton - Harvard Business School - McKinsey & Company) I'd like to make a few comments

  • First and foremost, this problem cuts both ways.  I can imagine outsiders are frustrated with the lack of access.  But as an insider I can tell you  (cue Admiral Akbar) It's a Trap!  You go to Princeton, think, wow, I did well at Princeton, it would be a waste not to do something with that.   You are a competitive sole, so getting into a top grad school is an honor to be pursued just like good grades.   So you go to Harvard Business School (it could have been Harvard Law) and do well.  And what is the mark of achievement there? -- getting a job at a top consultancy or top investment bank.  So you take the McKinsey job, have your first kid, and what do you find out?  Wow, I hate this job!  In fact, the only thing I would have hated more is if I had taken that Wall Street job.   Eventually you find happiness running your own company, only to discover your Ivy League degrees are a liability since they intimidate your employees from sharing their ideas and most of the other guys you know successfully running businesses went to Kansas State or Rutgers.
  • My only data point inside this hiring process is from McKinsey about 15-20 years ago, so it may be out of date.    But at that time, the above statement would be BS.  Certainly hiring was heavily tilted to the top Ivies and a few top business schools.  But we had people with undergrad degrees from all over - in fact most of our office in Texas had undergrad degrees from the Texas state schools  (at lot from BYU too -- McKinsey loved the Mormons).  At the time, McKinsey was hiring hundreds of people out of business school around the world each year.  No way this could have come from only a few schools.
  • My hypothesis is that this may be more a regional than an industry bias, limited to Boston/New York/East Coast.  Since many top law firms and consultancies and investment banks are in NYC, they reflect this local bias.  But I would bet these same firms and industries hire differently outside of the East Coast.
  • There is some rationality in this approach - it is not all mindless snobbism.   Take Princeton.  It screens something like 25,000 already exceptional applicants down to just 1500, and then further carefully monitors their performance through intensive contact over a four year period.  This is WAY more work and resources than a private firm could ever apply to the hiring process.  In effect, by limiting their hiring to just a few top schools, they are outsourcing a lot of their performance evaluation work to those schools.

Great Moments in Labor Relations

My previous post joking about potential union opposition to unmanned military aircraft reminded me of one of my favorite labor relations stories.   Until just the last few years, most railroads continued to pay a "fireman" to ride in the cab of their diesel locomotives, despite the fact that the role of the fireman to shovel coal into a steam boiler was totally obviated fifty years ago by diesel technology.  How this came about is an interesting story.

Railroads were the first heavy or large industry in this country.  For years, if you were to talk about "big business", you were really talking about railroads.  So it is not surprising that when the government succumbed to the pressure of interfering legislatively into the relationship between employer and employee, their first target was the railroad industry.  In a sense, the US has two bodies of labor law.  The first body of law is railroad labor law, and the second is the law that applies to every other industry. 

As much as we can complain about the labor law most of us operate under, it is nothing compared to the hash that the government made of railroad labor law.  From an early stage, details about work days and work rules that would normally be part of a private labor contract between a company and their union or employees were actually embodied in the law.  For example, back in the steam-engine era when trains moved fairly slowly, a full "day" for a train crew was defined by statute as 100 miles (about the distance a steam engine could go without taking on more water).  Once a train crew had traveled that distance, they were owed a days pay.  Other portions of the law gave the unions incredible power, such that the bargaining table at every negotiation with management was always tilted, by statute, in their favor.

Beginning in the late 1930's, but really gaining momentum in the late 1940's, railroads began to replace steam locomotives with diesel engines.  Diesel locomotives were more reliable, easier to maintain, easier to operate (no coal to shovel) and could go much longer distances without service (steam engines stopped frequently for more water).  As this transition occurred, railroad companies very reasonably sought to eliminate the position of "fireman" on diesel trains.  After all, without a boiler and coal to shovel, the fireman role was totally redundant on a diesel engine.  Railroad unions were nothing if not gutsy, and in response they argued that not only would they not accept elimination of the fireman position, but they campaigned for an addition of a second fireman on diesel engines.  Railroads found themselves in the position of actually having to fight a nearly successful effort to increase the number of firemen on crews.  As a result, they ended up accepting the fireman role, and generations of railroad men cruised about the country on engines for the next 40 years, doing virtually nothing for their pay.  Railroads were still fighting to eliminate the fireman in the 1990's.  In some cases, railroads were actually forced to pay "lonesome pay" to some engineers when the firemen were removed from their crew.  LOL.

Other labor statutes and work rules prevented full use of the diesel's capabilities.  For example, the 100 mile rule was now absurd - an inter-modal or other long-distance freight train could cover this in less than two hours.  But US law still insisted that railroad workers be paid a full days pay for 100 miles.  By 1990, after four decades of lobbying and negotiation, the 100 miles had been increased all the way to ... 108 miles.

This article from Regulation is a bit dated, but it still gives a good overview of some of the historical insanities in railroad labor.  An excerpt:

The rail unions deserve the labor equivalent of an Oscar for best sustained performance in reducing industrial efficiency. Restrictive work practices are legendary from firemen on diesel locomotives to train-limit laws. During the 1980s the railroads made minor progress against these practices, but they still have a long way to go. Some crews receive an extra day's pay every time they turn a locomotive around (yard and line haul crews have rigid separations of duties despite identical skills). Carriers are forced to employ three- to five-person crews, while nonunion carriers (Florida East Coast Railway and regional and short-line carriers) use two people. Crew members receive a full day's pay after a train moves 108 miles, even if the trip requires only a few hours. (The current three-member board appointed by Congress may impose a 130-mile rule by 1995.) Some union members have guaranteed lifetime incomes and must only work a few days per month. Some engineers receive "lonesome pay" for giving up the full-time company of a fireman. Until 1987, some Burlington Northern crews received "hazardous pay" for traveling through Indian territory in Montana. Management studies show that work forces could be cut in half, and according to some estimates, labor restrictions cost the industry some $4 billion a year. Despite union concessions on work rules, shippers continue to complain about the carriers' inability to achieve efficient and economical labor contracts. Overall, the RLA and its government-backed unions combine to double labor costs and therefore drive up freight rates from 20 to 25 percent, a very serious handicap in the competition with trucks and barges.

One railroad stood up to the union, and eventually won, but had to withstand a violent 11-year strike, all the while the taking continuous grief in the union-friendly press:

The Florida East Coast Railways, a line long known as "America's most efficient railroad," highlights the woeful labor inefficiencies of the major carriers. Its primary operation is transporting freight from Jacksonville to Miami. When Edward Ball took over the operation in 1961, the unions required the use of three five-man crews-each receiving a day's pay for each 100 miles traveled on the 366-mile trip. Ball failed to see the sense of this scheme and decided to try th change it. Union officials could not see the sense in any change and called a strike in 1963. The violence and vandalism that continued for eleven years demonstrated to other carriers the cost of defying the unions. The railway won, however. The company used two-man crews who were "cross-trained" and paid them a day's pay for eight hours' work rather than for 100 miles traveled. During the 1970s, the railroad's labor costs were 40 percent of total costs compared with 64 percent for all class I railroads, and Florida East Coast Railway earned the highest return of any class I railroad. In addition, the railway consistently won safety awards that fended off another pretext for government control and continues to retain customers while other railroads lose out to trucks.

Read the whole article.  If you have ever read Atlas Shrugged, you will find that a lot of the outrageous legislation in that story that seemed too stupid to be true actually have a basis in the history of US railroad law.  Even the "railroad unification act" that seems totally over-the-top toward the end of the book is based on actual railroad law after WWI:

The Transportation Act of 1920 gave the Interstate Commerce Commission complete control over pricing, issuance of securities, expenditure of proceeds, consolidations, and the construction, use, and abandonment of facilities. The act set up a Railway Labor Board to mediate disputes. Its "recapture" provision required a portion of a company's earnings in excess of an allowable "fair return" to be diverted to railroads with relatively low earnings. Except for the most routine administration, almost everything owners might do was subject to federal regulation or dictation.

More on the transition of steam to diesel here.  I am not very well versed on the subject, but apparently this specialized railroad labor law was later applied to airline pilots, with predictable results.  It is interesting that the two industries covered by the RLA (railroads and airlines) have both seen every major carrier in their industry bankrupted over the last 50 years.

Update:  I have been a fan of railroads for years.  One of my frustrations with my current house is a don't have room for a model railroad layout.  I had one back in St. Louis, where I had a basement, but there are not very many basements in Phoenix.  Here are some photos of that old layout, which was still under construction when I had to tear it down and move.