The Salary Gap and the Public Weal: Why Graduates Shun Service Careers
At this time of year all over America, graduating students are going forth from our colleges and universities to launch their careers. They do so at a time when our country faces a host of challenges at home and abroad, challenges that call for the most enlightened national efforts--efforts to adjust to a new stage in the evolution of the Soviet Union, to revitalize our educational system, to halt the spread of poverty, drugs and crime, to improve the quality and efficiency of our manufacturing sector, to strengthen our ethical standards.
If we are truly to overcome our nation’s problems, we should expect to see many talented young graduates involving themselves in the struggle by serving in government agencies, grappling with problems of foreign affairs, trade policy and chronic unemployment; teaching in our public schools to lift our sagging achievement levels; revitalizing our manufacturing companies to restore their competitive position; working in poor communities to combat crime, homelessness and drugs, or preaching in our churches and toiling in our urban parishes.
But what are the facts? Are these truly the careers our graduates are choosing?
At Harvard Law School, the percentage of graduates going into public interest and legal aid has dropped to less than 2%, while the percentage of graduates entering government service has drifted downward from 4% or more 10 years ago to slightly more than 2% today. In the business school, only 22% of last year’s class went into manufacturing, while 57% went into consulting or investment banking--double the percentage of just 10 years ago. From the Kennedy School of Government, only a third of the graduates went where you might expect them to go--to a job in federal, state or local government. More than 40% found work in the private sector, more than a quarter in private business or consulting.
At Harvard College we know only the aspirations of seniors--not their final choice of career. For them, business has become the most popular vocation, closely followed by law and medicine. Only 7% say that they are interested in government and far fewer will actually make a career in public service. Less than 2% of the students plan to teach in public schools, and virtually none are interested in the ministry, for which the college was founded.
Nationwide the situation is not so different. In the last 20 years the share of graduating students interested in education has fallen by 60%. Along with this decline come disquieting reports that public school teaching draws from the least talented of college seniors across America. As for careers in government, the percentage of students interested in public service has dropped over the last 20 years from 12% to 6%. In short, the career plans of our students do not fit very closely with society’s most pressing needs. Much of the explanation, I fear, has to do with compensation.
When I left law school in 1954, the starting salary for Wall Street firms was $4,200, while starting teachers could earn $3,600. Today, the Wall Street salary is $70,000-$75,000 and teachers get $17,000-$18,000, a lower paycheck in real dollars than was the case 15 years ago.
For business graduates, a similar shift has occurred. In 1976, the starting salary advantage for individuals entering consulting firms and investment banks was 10% higher than the salary of those joining manufacturing companies. By 1986, the premium for consulting or investment banking jobs jumped almost 20%, and the true premium may be closer to 50% if bonuses are counted in.
Fifteen years ago, corporations and consulting firms paid almost the same starting salaries as government agencies and not much more than public schools. Today, consulting firms and corporations pay 50% more than government agencies and public schools.
It is always tempting to explain these results by claiming that the market knows best. By the magic of an invisible hand, it is held, salary differences reflect the sentiments of the public as to what kinds of work matter most. With due regard for Adam Smith, however, it is a strange process that pays young consultants more to write reports than it pays to the young executives who must ultimately execute the decisions. Similarly, it seems peculiar that people in private think-tanks are paid much more to offer advice on government policy than the public officials who actually make policy and carry it out. Or that the lawyers who defended Ivan Boesky and Michael K. Deaver were paid several times more than the lawyers who prosecuted them in the public’s behalf.
The explanation, I would assert, is not an invisible hand. If investment bankers and management consultants and corporate lawyers and chief executive officers had their salaries appropriated by Congress or determined by a city council or established by a congregation or a local school board, one would expect very different results from those we currently see.
If you can believe it, during the past 20 years, the real salaries of high-level federal officials and career civil servants have dropped by a whopping 35% or even 40%. Surely, our need for effective government has not diminished by 40% over the last two decades, nor has anything else occurred that could possibly justify a decision to cut the pay of public officials by anything like this amount.
A quarter century ago, President John F. Kennedy said: “Ask not what your country can do for you, but what you can do for your country.” In that era of Camelot, public service was the exciting career for college students across the nation. Today, after 12 years of hearing Presidents say that “government is not the solution, government is the problem,” 12 years of listening to politicians talk of coming to Washington to “drain the swamp,” we find that attitudes toward public service have totally changed. For most young people now, the exciting occupation is that of the entrepreneur and the deal-maker. Only 5% or less of the general public would choose government service as their preferred career. More striking still, more than 70% of our top federal career officials say that they would not advise their own children to enter government.
Like public service, school teaching has also suffered a serious loss of prestige. From 1969 to 1983, the number of parents who would recommend a teaching career to their children fell from 75% to 45%. Since then, despite school reforms of the last five years, most teachers feel that their working conditions have not improved, and half of them believe that professional morale has slipped even further.
To make matters worse, working conditions have also deteriorated in many of the jobs society needs most. School teachers have lost much of their autonomy and find themselves increasingly beset by problems of drugs and violence and parental indifference. As caseloads rise and staffs are reduced, legal aid attorneys are overwhelmed with work, and unable to offer the service they would like to offer.
All these forces combine to drive students away from difficult jobs that urgently need talented people. Unfortunately, the problems promise to get worse before they get better. Surveys over the last 20 years reveal that entering freshmen have a growing interest in making money and a declining interest in helping communities or tackling civic problems. Now that educational loans have multiplied, even graduates who might be inclined to enter lower-paying careers often feel that they cannot afford to do so for fear that they will be unable to pay their debts.
Is there anything we can do to reverse these dismal trends?
The choices students make about careers will ultimately be determined not by universities but by the outside world. If we are ever to match our talent with the nation’s needs, therefore, we will have to look beyond the campus and change public attitudes toward the importance of government service, public education, social work, the ministry and all the other occupations that directly address the major problems of our society.
To begin with, we will have to recognize how much public opinion affects the morale of those who pursue these careers. People do not like to work where they are not appreciated. As a result, it does not help when two consecutive administrations run on an anti-government platform. Such a position might be tolerable if government could really be cut back or radically restructured. But Jimmy Carter’s federal bureaucracy was larger than the one he inherited, while eight years after coming to Washington to “drain the swamp,” Ronald Reagan will leave office with 5% more federal employees than he found when he entered the White House. If we are going to depend so heavily on government agencies and public education, we must learn to treat civil servants and school teachers with greater respect, or we will suffer the consequences.
Yet morale alone is not enough. If it is as important to have a gifted high school principal as it is to have a gifted young consultant--as important to have a talented head of a public agency employing 100,000 people as it is to have a talented chief executive officer of a company with 100,000 employees--then compensation levels for these positions must come much closer together. Here, too, public attitudes affect the problem, for in the end, the public decides what salaries will be given to our teachers, our public servants, our ministers, our legal aid attorneys, our community workers.
Unfortunately, many people still believe that government officials and school teachers are overpaid, despite the facts that argue so eloquently to the contrary. These attitudes must change before we can succeed in attracting able people to jobs essential to society’s needs. In saying this, I realize that we live in a time of financial stringency and huge budgetary deficits. But these fiscal problems are themselves the product of public choices about our national priorities. By virtue of the tax reforms of the 1980s, our total tax burden per capita is now virtually the lowest of all the industrialized nations. Yet the electorate will not tolerate any candidate who speaks of raising taxes or reducing Social Security or doing away with tax exemptions or mortgage payments deductions or other middle-class entitlements.
Perhaps the greatest hope for progress lies in the growing realization that our position in the world is no longer as secure as it was and that recapturing our influence economically, militarily and politically will require a vast revitalization of society. If that is so, the effectiveness of our government, the quality of our education, the conquest of poverty and illiteracy, even the moral and spiritual health of our society cannot be merely private concerns. They are ingredients essential to us all if we are to prosper together as a nation, investments we must make if we are to preserve leadership in the world.