The Supreme Court’s Affirmative Action Decision
Maria |
July 13, 2023

In this episode of Business Casual, our hosts will discuss the recent Supreme Court ruling that struck down affirmative action in higher education admissions. They explore the impact of the ruling on business schools and the challenges they face in maintaining diversity. The hosts highlight the underlying discrimination in the education system and the need for a more equitable approach. They discuss potential alternatives to race-based admissions, such as income-based or first-generation status, while acknowledging the limitations and potential legal challenges. 

Our hosts remain hopeful, urging schools to proactively promote diversity and encouraging minority candidates to persist despite this ruling, underlining the critical importance of equal opportunities for all.

Episode Transcript

[00:00:07.690] – John

Well, hello everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co host Caroline Diarte Edwards and Maria Wich Vila. We are in the aftermath of a very big decision by the Supreme Court which struck down affirmative action in higher education admissions. This is a big ruling with a lot of impact. We’ve written a series of stories on this ruling. I would say that most business schools have come out with statements that basically say they are in favor of diversity and that it’s important to the learning experience in their schools, but have been rather vague as to how they’re going to proceed in the wake of this Supreme Court decision. And some schools have had to deal with this for some time. For example, in California, affirmative action has been banned for a number of years and even an attempt to reverse that by a vote had failed. So Caroline, what’s your immediate reaction?

[00:01:14.290] – Caroline

Well, I understand that the legal arguments are very complex and that there is a good argument to say that it is unconstitutional in that affirmative action is discriminating against some group. So I certainly understand that argument and I understand the frustration of certain groups like Asian Americans who feel frustrated that the bar has been higher for them. On the other hand, I think that there’s a bigger issue here of underlying discrimination that is built into the education system and without some sort of affirmative action at some point or at many points, that will continue to be perpetuated and racial injustice in the US. Will continue to be perpetuated. And as the dissenting justices said, the US. Is not a race blind society. And you can’t pretend that education can’t pretend that we live in a race blind world. And California and Michigan have banned affirmative action. And when that went through, there was a drop in enrollment of underrepresented minorities. And despite tremendous efforts to turn that around right, I think California has spent about $500 million on outreach to underrepresented groups to try to drive enrollment upwards for underrepresented minorities. In the universities of California, the most selective university campuses still remain very unrepresentative of society at large.

[00:03:04.970] – Caroline

It is frustrating because I think it is a worthy goal to try and have a diverse school campus. I think it’s true that everybody benefits, right. One of the things that there’s a couple of things that shocked me as a foreigner moving to the US. Eight years ago, and I now have American nationality, but I came here after living in several different countries and originally from the UK. And a couple of things that relevant to this discussion that really shocked me was how segregated the US. Is still, right? And neighborhoods are very segregated still, and therefore schools are still very segregated, and that’s not the case in other countries that are also ethnically diverse. I think the US. Has done a bad job of integrating its population. And so that does affect the education system and it affects outcomes. And another thing that really shocked me, and I think is quite disgraceful is the huge disparities in the public education system. So because I live in a nice neighborhood where my public schools have really generous funding, my kids basically get pretty much like a private education. But in a public school, they have small class sizes, they have different length foreign languages, they have great arts programs, they have great music.

[00:04:35.110] – Caroline

If I drove an hour down the road, I could find schools where the budget is about a third of what my kids benefit from. Right. And they don’t have any of those things that I’ve just mentioned. I do not understand how that is legal in this country. I don’t understand how that is accepted. And of course, therefore, because of that segregation by neighborhood and the disparities in the public education system, the odds are stacked against kids from a very early age. And so colleges are trying to adjust for that. But it should have been done much earlier on, right?

[00:05:20.070] – Caroline

If we had a level playing field throughout the public education system from K through twelve, then the onus would not be so heavily on colleges to try and try and address the imbalance. But that’s a whole different discussion. Trying to address the inequalities in K through twelve.

[00:05:41.790] – John

Yeah, true. Maria, your thoughts?

[00:05:46.200] – Maria

I mean, I’ve been trying to find some silver linings in all of this. And I think one of the positive things is that once affirmative action is effectively removed, then when people complain, when people who have this sense of privilege, this sense of no less obligation, in the sense of, like, well I’m a white, upper class person, and I didn’t get into the college of my choice. And so I’m going to blame it on some quote unquote, less qualified minority. My hope is that that argument will no longer be as valid because now I do think that schools will be able to take things like adversity and things of that nature into account, but it won’t be as obvious. So I think the one silver lining, because I’m just trying to think of a silver lining, is that at least hopefully it will make it a little bit less acrimonious. There will be less of the sense of, okay, well, you minority person are here. This automatic assumption that you don’t, quote unquote, deserve to be here, which is something I have personally encountered. And this idea of like, yeah, you took a spot from someone else who deserves it more.

[00:06:56.150] – Maria

So I’m hoping that at least if we eliminate the formal affirmative action, then hopefully that’ll start eliminating, hopefully some of these things. Although I’m sure that people will always find reasons to be biased against others. But I think Caroline made a really good point. I mean, the, the higher education system has been trying to for generations now, atone for the sins of the public education system and the K through twelve in the US. Right, which is primarily driven by property taxes. So the reason why the better neighborhoods get the better schools is because they have more property taxes. For the most part. That’s usually how it works. And so it’s really kind of sad that when someone is born, it has nothing to do with their effort or their desire. It’s just if they’re born into a lower income to the lower income family, that means they’re probably living in a lower income community, which means they’re probably going to a school that has less funding. And so how do you even escape the gravitational pull of that stratum that you’re born into? And I do think that the US. As Caroline said, they have done a really bad job of trying to truly remedy that.

[00:08:10.010] – Maria

And so I do think that schools are going to need to try to find other ways to account for diversity. One thing that I thought was interesting was that when California banned affirmative action, one of the medical schools, I believe, tried to put in place something that I think they called like, the Adversity scale. And so they weren’t allowed to ask you about your race or your ethnicity, but they weren’t allowed to ask you things like what was your parents household income, perhaps, or what was their level of education, or were you working to provide for your family’s income? These sorts of different variables that get at without asking about race overtly that get at. What obstacles have you overcome? And if you have overcome obstacles, then it’s only fair. If you’re working 30 hours a week at the supermarket to try to augment your family’s income, then obviously those are 30 hours a week that you don’t have to take the AP courses or to study for the SATS. So I do think that we definitely need to, regardless of someone’s race, we’d have to look at what obstacles have they faced? And if those obstacles have had a material impact, an undue material impact on their academic performance, then we cannot judge simply on academic performance alone.

[00:09:25.200] – John

Yes. And this is another area that is gathering more and more attention income. So, Scott Galloway, who we know is a fairly provocative professor at NYU, stern noted after the Supreme Court decision that affirmative action is broadly unpopular. It’s highly vulnerable to legal challenges, it disproportionately helps upper middle class students of color, it pits working class people of different races against one another. And his argument is that financial aid and admissions preference should be given based on income, because, after all, poor students do have a more challenging time applying and achieving high test scores that are so instrumental in admissions in higher education. In fact, there was a survey out that found that one in three Americans supports income based admissions to higher education institutions. And then there was another survey that showed those who agree with income based admissions 68% strongly or 37% somewhat agree that colleges should implement a quota system based on accepting a certain percentage of economically disadvantaged applicants each year. And then there are some people who say, well, if you’re a first gen college student, you should be given a preference over others. So both these other measurements, whether you’re first gen or what your income is, could in fact achieve the same diversity goals.

[00:11:09.370] – John

Of course, they could also be subject to legal challenges in the future, because if they’re mere substitutes for race, as I bet you, some people will be able to show, you’ll have yet another legal challenge to this. And it’s worth noting that the legal challenges were largely brought to light by Asian Americans who felt greatly disadvantaged in the admissions race more than any other, and who really challenged it. What do you think of income or first gen status as a piece of the admissions puzzle?

[00:11:50.270] – Caroline

Caroline well, I think it could be a proxy. My concern is that the US. Is still majority white country, I believe, and the majority of poor people are still white. And therefore it’s not going to be a perfect proxy, right? There’s still more poor white people than poor black people in the US. As Pete Johnson, my colleague Pete Johnson wrote in or contributed to your article. John, the UCS have have tried to incorporate diversity using different methods without being able to use the tick box approach right, to encourage diversity. And I don’t think there is any ideal proxy that will generate the same mix. And as you said, I think that there are going to be groups that are hostile to race based admissions that are going to monitor things very carefully, and they’re potentially going to make life very difficult for admissions officers. There’s potentially going to be litigation, right. If they see that the mix doesn’t change, if they see that the diversity that the schools have currently, if that doesn’t change over time as a result of this decision, then they may bring court cases against the admissions office. And so to what extent then, can the admissions office really seek to maintain diversity if that’s they’re facing legal challenges?

[00:13:26.380] – Caroline

I think that the admissions officers are potentially in a very difficult situation.

[00:13:32.790] – John

And even though this decision was widely anticipated, I mean, no one really thought that this conservative court would uphold affirmative action. It it feels like many schools are caught a little bit flat footed only because the responses have been fairly vague and basically exploratory. At the Kellogg School, Francesca Corneli, the dean, said, basically they’re going to be work to determine how we will comply with a decision while continuing our work to advance diversity, equity and inclusion on our campuses. But determining how and figuring out what to do seems difficult, let me put it that way. Right. I understand that Kellogg and other schools are committed to having diverse classes of an important part of what any graduate education is about. Because after all, people are going to be working in diverse cultures with lots of different kinds of people who share different kinds of or don’t share their own cultural values and bring them to work. And they’re very different in learning how to work with people across the variety of these cultures, languages and beliefs is a crucial part of being effective in the world of work. Maria, what do you say? Is there a substitute to race to ensure diversity?

[00:15:11.330] – Maria

I wish there were, because that would certainly make things a lot easier for all parties involved. I think the one thing that becomes a little bit tricky with using only something like income as a substitute is that the reality is, as any statistic about something like, say, police brutality against African Americans shows, that the color of one’s skin does, unfortunately, impact even one’s ability to move freely and walk down the street minding one’s own business. In some cases, sadly enough, and so someone’s income is not going to whether someone is if someone is white, they are not going to face that sort of automatic, visceral discrimination that I think people from different races might face. And so in that case, the income level, while certainly a pretty strong proxy for Adversity, is not the only proxy. And because I think it’s such a shame, right, because the United States has just sort of kicked the can down the road for 200 years now of, okay, what are we going to do? Well, the next generation will figure it out. And so now all of these ghosts of our country’s past are coming home to roost.

[00:16:28.580] – Maria

And because things were not done aggressively to squash some of these things generations ago, now we find ourselves in the situation where we are. So I definitely think that income is a great place to start, right? First gen. Absolutely great place to start. But I don’t think that it captures fully some of the challenges that people from different racial groups face.

[00:16:50.720] – John

Yes. And it should be pointed out that this Supreme Court decision is occurring at a time when overall minority numbers have declined at four of the top ten MBA programs and at 20 of the top 30. We have a story on this as well, which you can look at. So even before the decision, you have minorities deleting US MBA programs falling. In fact, two thirds of the top 30 have reported declines. So it’ll be interesting to see in the data a year or two from now the full impact of the decision. I’m assuming that it will basically accelerate the decline as it has in Michigan and in California, where these bans had been in place for years. Which is sad news, really, because everyone deserves an equal opportunity to get a great education and to move forward. We do think that higher education is an equalizer of sorts and a real great tool to climb the socioeconomic ladder. And being denied the opportunity to go to a great school and get a great education will have a meaningful impact on generations of people, really. So I am also hopeful that schools will figure out a way around this.

[00:18:17.220] – John

Right. Caroline?

[00:18:18.850] – Caroline

Something that I think is quite interesting, John, is that when you look at the Supreme Court, three members of the Supreme Court were beneficiaries of affirmative action. Right. And Justice Sotomayor has been very forthright about that in her proclaiming that she was a beneficiary of firmative action and that she got into Princeton despite not having equivalent scores to some of her classmates, and yet she graduated top of her class. Right.

[00:18:50.320] – Caroline

So case in point of somebody who might not have got in otherwise and was clearly in the right place at the end of the day. I also thought it was very interesting that they’ve carved out military schools. Right. So the fact that military schools are not subject to this ruling means that they do recognize that diversity in leadership is critical. Right.

[00:19:19.960] – Caroline

So why is that critical for the military, but it’s not critical for government or for business or for any other institution or function, right. As one of the justices says, well, clearly the court has decided that affirmative action is okay for underrepresented minorities as long as they’re destined for the bunker and not for the boardroom. I found that rather bizarre that they’ve carved that out, because that is clearly a recognition of the importance of diversity in in leadership roles.

[00:20:00.350] – John

Yeah, that’s very true. That’s ironic, in fact.

[00:20:04.510] – Caroline

Yeah, it’s it’s very ironic. So so I hope that schools will find ways to continue to promote diversity. I think that schools will end up having to invest a lot more in their outreach efforts. And as you said, California spent vast sums of money on these outreach efforts to try to generate more applications and bring in candidates from underrepresented groups. And so I think that schools will end up having to do the same.

[00:20:34.880] – Maria

Right.

[00:20:35.070] – Caroline

They’re going to have to put a lot more money into that.

[00:20:39.340] – Maria

I’m so glad that Caroline brought up the example of Sonia Sotomayor, because it got me thinking about my own story. And it was so interesting, because when I was in high school, I thought I had prepped for the SATS. I had maybe looked at a couple of practice questions, and I think relative to perhaps perhaps some of my peers, perhaps I had studied more when I got to Princeton and I met everyone else, and I realized, oh, my gosh, I had been so naive. Right. I had had no idea just how much time and effort and how many resources had gone into preparing everyone else. So what happened was that later, when I applied to business school, now, this time, I entered that process with a lot more sophistication. And this time I actually really studied and I took practice tests and I would quiz myself and take I would do little problems on my morning commute and my evening commute to and from work. And so the result was that when I was applying to college, my SAT scores were below the average, but marginally below the average. Marginally below the average. And yet when I applied to business school, my GMAT scores were notably above the average, at least for the class at the time.

[00:22:03.770] – Maria

And so one of the things about my own personal story here that is so chilling to me, that is so scary to me, is that in both cases, it was the same me, it was the same brain, it was the same raw intellectual horsepower. The only difference was one of savviness and understanding what was required. And so one of the things that I think is kind of chilling about the argument that, well, these admissions should only be based upon test scores is that I personally am an example of the difference that a little bit of, I don’t know sophistication or knowledge of the process can make. And second of all, I think on this podcast we have spoken so many times about how MBA admissions is a holistic process. And there’s a reason for that. It’s not just because it sort of sounds politically correct to do, but because business schools are trying to admit people who are going to go out into the world and do well in some sort of leadership or managerial capacity and the skills that are needed. There might be some overlap, obviously, between being intelligent and being a good leader, but it’s not a completely overlapping circle, right?

[00:23:28.450] – Maria

And so we’ve all met people, I think, who are very good at academic settings or are very skilled at filling out multiple choice scantron forms. They don’t do scantrons anymore, but you know what I mean. And yet these are some people who are geniuses, perhaps by that metric, but then they go out into the business world and they cannot work with others. They are very bad teammates. They argue with everyone and everything around them and so they get fired time and time and time again. I think we’ve all seen examples of that. And so that’s why the business schools have long used a holistic process, because they know this. And perhaps one of the upsides about COVID was that because those initial at home tests were so buggy, it led to perhaps probably, I think for the first time, test scores being either optional or you can get a waiver for the test and sort of making that more of an accepted way to run your admissions office, hopefully in the wake of the Supreme Court decision. That is a trend that will now continue because now there’s been it would not be an experiment to do it that way right now.

[00:24:44.970] – Maria

There’s been at least some sort of precedent where admissions offices have let in people perhaps without a test score or with some other metric submitted in lieu of a test score, and they’ve seen how those people have succeeded in the programs. And so my hope is that that is just a trend instead of just being a temporary thing because of COVID Perhaps that is something that will continue.

[00:25:09.650] – John

Going forward and even beyond the actual effects of the decision. You also wonder, to what extent does a ruling like this discourage minority candidates from even trying to apply to an elite business school or an elite school of any kind? There is this. The psychological impact of it could be as great as the actual impact. If you’re out there and you’re a minority student, don’t be discouraged. If anything, be motivated to go and go for it more than ever before, because that’s really important. You don’t want to see even fewer people in the pool to begin with who can have a great education and really benefit from one.

[00:25:58.150] – Caroline

And we’re already getting those questions from candidates who are from those backgrounds and are asking, is it going to make it hard for me to get in?

[00:26:05.820] – Maria

Right.

[00:26:06.140] – Caroline

So those concerns are already being expressed.

[00:26:10.630] – John

It will discourage a lot of people and persuade them not even to try, which is a shame. Really is a shame. And I’m glad. Of the three justices that you mentioned before who were beneficiaries of affirmative action, you didn’t mention Clarence Thomas. Thank you for not doing that.

[00:26:33.550] – Caroline

Good old Clarence Thomas. He’s not your favorite justice, John.

[00:26:39.230] – John

No, I’ve never met him at one of the elite clubs that he’s a member of.

[00:26:43.250] – Maria

Yeah.

[00:26:43.890] – John

Never really given him any money or allowed him to stay in one of my homes. But hey.

[00:26:51.330] – Maria

I find that when it benefits somebody else, it’s unfair affirmative action. But if you manage to achieve an elite position, it’s because you did it on your own merit.

[00:27:02.670] – John

Hallelujah.

[00:27:05.110] – Maria

Sure is interesting how someone’s judgment and perspective changes as to whether or not it’s benefiting them or someone else.

[00:27:12.360] – John

So true. So there you have it. I think the takeaway here is we’ll see how schools actually deal with this. I do suspect that they’ll put other measurements in place to try to at least maintain or at least diminish the impact of the ruling on their efforts to craft a diverse class of candidates in their programs. And again, I’ll just say it again, if you are in this minority class, do not feel discouraged. Apply. Be motivated to apply. You deserve to apply and to be considered fairly. And you shouldn’t be dissuaded from doing so because a conservative court ruled against affirmative action. This is John Byrne with Poets and Quants. You’ve been listening to Business Casual, our weekly podcast.

Business School News | General | P&Q Podcast "Business Casual"
The Supreme Court’s Affirmative Action Decision
Maria |
July 13, 2023

Video transcript, for you skimmers out there: 

I love the fact that they. Report on this metric, right? The salary percentage increase, I think is an incredibly valuable metric because there are so many business schools out there that are great for so many people. And at the end of the day, these programs are in fact able to do what a lot of business school applicants are hoping for.

They are in fact able to provide a real change in the trajectory of someone’s career. They are, in fact, able to help people leapfrog. Into a higher career stratum than they would’ve otherwise been able to be in. So from that perspective, I love the fact that the FT reports on the salary percentage increase.

So valuable. I think it helps, when sometimes I talk to people at the beginning of the business school journey, I will frequently hear something like, well, it’s M seven or bust, you know, it’s Harvard, Stanford, Wharton, or bust.

And I’m often like, look, slow your roll, man. There are so many programs out there that are going to get you. They might not be the first ones that you think [00:01:00] of, but wow, does that even matter? I mean, whew. Look at some of these numbers. $170,000. That is nothing to sneeze at, especially if it’s one and a half times more than what you were making before business school.

I mean, wow. , That is life changing. , And these schools can really change people’s lives. And I think it’s important to have this metric available because I think it helps open people’s eyes. To, To be a little bit more open-minded. , And I think that’s wonderful.

Where my little quibble is. Is that I believe this is an important metric to report upon. However, I do not believe that it is a metric that should have significant amount of weight in the rankings because if we think about what is the purpose of a ranking, it is meant to be some sort of a representation of relative quality.

Now rankings. The entire concept of them is flawed the entire, for me, the entire concept of an ordinal ranking is ridiculous. Like school versus two versus four, versus seven versus six . You know, like, there, there’s sort of [00:02:00] these tiny miniature marginal differences. I think that school rankings should instead be in buckets.

Like, here is the top bucket, and then here is the also very good, but just underneath the top bucket, the next bucket. Um, but no one, no one listens to me. Uh, but so anyway, to the extent that a ranking. Is intended to be some sort of a measure of a program’s quality. I don’t think that this metric is one that should be included in the weighting.

Look, again, . Life-changing levels of improvements in salary. But when I look at, okay, so these were the top five programs by the salary percentage increase, but now when I look at it by the weighted salary, right, the top five US programs, by weighted salary, it’s not entirely accurate to say that.

Well, these programs, you start with people who have lower incoming salaries and they end up in the same place as the other programs. The numbers do not [00:03:00] really, , the numbers would tell a slightly different story. So if you look at the weighted salary a few years out for the top five programs by salary,

we’re talking about a $70,000 a year difference, roughly 240 a year versus 170 a year. That’s about a 40% difference, which I don’t think is a small, you know, if we were talking 5%, even 10%, I’d be like, yeah, 10%, that’s nothing. It’s, you know, nothing but 40% I do think is a pretty, I think it’s a pretty significant difference, uh, that is worth noting.

And so. Your point about like, well, they were letting in the people who were already on a, you know, if you were making, let’s see if we can, if we figure out, okay, so if we take this, these numbers, then we can sort of back into what’s an implied pre MBA salary, you know, that would indicate maybe something in the mid sixties before MBA versus, you know, one 10 something, [00:04:00] 1, 1 10, 1 15, for these other programs.

I get your argument. Your argument is like, look, these people were already clearly high achievers prior to business school, and so, mm-hmm. Is it not true then that the business school, like they would’ve continued to be high achievers And in fact, this is true, some of the most successful, financially successful people I know skipped business school altogether and they didn’t need it.

, However, I think GMAC often does, polls or surveys of MBA graduates, and I think the vast majority of them, at a minimum say that they’re glad that they went to business school, that they do feel that it was worth, their time. So. How much of this is,, nature versus nurture.

We, we will never know. , But I would gently push back on the fact that I, because these numbers essentially to the extent that they’re lower than say these numbers, it effectively penalizes thes e schools in this ranking. And for that reason, I don’t think that it should be part of the ranking because you’re penalizing a school for letting in more successful people.

But there’s a benefit. [00:05:00] To attending. Like, first of all, if you are a more successful person, think of the opportunity cost that you’re giving up. So the fact that these schools are able to lure away people to give up two years of their salary, in order to go to business school in the first place, I think is a pretty good indicator of the desirability or the perceived desirability of those programs.

Also, I do think that there is merit to thinking about like, who are my peers going to be in a business school? and. If a school is attracting people who were more successful prior to business school, I actually think that that is an indicator of the quality of the school, not only because it shows the people that are willing to give up those two years of salary, but also think about who the peer group is once someone is in the school.

Right? That means that if you are attending one of these schools. This percentage isn’t as high, but you’re surrounded by people who, prior to business school, were already achieving on a different level. And also after they graduate, they continue to achieve on a different level. True. The slope is not as sharp.

Right. But the.

[00:06:00] Result is a larger number. So I think that this implies that perhaps at the school itself, you might be surrounded by people who are driven. some people might say more competitive, which might not be everyone’s cup of tea, but people who are more driven and also after they graduate, they continue to be driven.

And so I think that also implies something pretty powerful about the ultimate benefit of the network because business school isn’t just the two years you go there and it’s not just that first job you get out of school or that third job you have five years out of school.

it’s also who’s your network gonna be and, and who are you gonna call 10, 15, 20 years after graduation? To invest in your company or to partner with your company or to start a company with. so I do think that there is value to attending a school and to have your peers during school and after school be people who were, for lack of a better term, high performers.

[00:07:00] I don’t think that this should be punished because I do think that this does yield a better business school. Experience and a better result in the long term. And so my quibble, again, I love this metric. I think this is an amazing metric to provide, but my quibble is that this should not be given honestly, any weight at all, and certainly not the high level of weight that it’s given, because again, you’re punishing the schools that, you know, you’re basically indicating that I, what I would say is an indication of quality.

An indirect indication of quality, but an indication of quality all the same. You’re basically punishing the schools that have sort of higher quality, quote unquote, coming in. And, and that to me is. Counterintuitive and kind of wrong. And so that’s why I continue to think that this should not be, uh, reported upon.

Absolutely. Tell us. It’s important. I think it’s great to know. I love using this information, but I don’t think it should be used in terms of like, let’s figure out which programs are the , [00:08:00] quote unquote highest quality programs. But what do you think? What did I miss? let me know. Thanks.

Maria

New around here? I’m an HBS graduate and a proud member (and former Board Member) of AIGAC. I considered opening a high-end boutique admissions consulting firm, but I wanted to make high-quality admissions advice accessible to all, so I “scaled myself” by creating ApplicantLab. ApplicantLab provides the SAME advice as high-end consultants at a much more affordable price. Read our rave reviews on GMATClub, and check out our free trial (no credit card required) today!