Affirmative_Action
00:00:00.000 | Hello, everybody. It's Sam from the Financial Samurai podcast.
00:00:03.920 | And in this episode, I want to talk about affirmative action,
00:00:07.320 | because on Thursday, June 29th, 2023, the Supreme Court
00:00:12.360 | invalidated race conscious admissions policies used by Harvard College
00:00:17.040 | and the University of North Carolina to diversify their campuses.
00:00:21.000 | And this decision has enormous consequences
00:00:25.040 | not only for higher education, but also for the American workplace,
00:00:29.800 | which is the ultimate goal to try to get a good job, to get good pay,
00:00:33.680 | to take care of yourself, your friends and your family.
00:00:37.320 | In a six to three decision written by Chief Justice John Roberts,
00:00:41.840 | the court held that the policies violated
00:00:44.680 | the Equal Protection Clause of the 14th Amendment.
00:00:48.280 | And what's the 14th Amendment?
00:00:50.720 | Well, on July 9th, 1868, the 14th Amendment
00:00:55.480 | granted citizenship to all persons, quote, born or naturalized
00:00:59.800 | in the United States, including formerly enslaved people,
00:01:03.400 | and provided all citizens with, quote, equal protection under the laws.
00:01:08.360 | The 14th Amendment was adopted after the Civil War.
00:01:12.040 | The amendment was intended to protect the rights of former slaves
00:01:16.040 | who were subjected to discriminatory state laws, particularly in the South.
00:01:21.200 | During a lengthy oral argument in October 2022,
00:01:25.400 | the conservative justices focused on two points.
00:01:29.280 | The first point was 2003 precedence,
00:01:32.800 | included what some interpreted as an expiration date
00:01:36.320 | on the use of race conscious admissions, a line in the majority opinion
00:01:40.920 | that signaled a hope that such policies would no longer be needed by 2028.
00:01:46.640 | At the time, Associate Justice Sandra Day O'Connor said,
00:01:51.040 | We expect that 25 years from now, the use of racial preferences
00:01:55.360 | will no longer be necessary to further the interest approved today.
00:01:59.680 | That line suggested the court's acceptance of race
00:02:03.840 | conscious admissions wouldn't last forever.
00:02:06.600 | And the other point of contention was just how seriously universities
00:02:11.320 | are taking the 2003 opinions directive to try race neutral policies.
00:02:16.480 | First, the court said that the law requires schools to engage in a, quote,
00:02:20.480 | serious good faith consideration of workable race neutral alternatives
00:02:25.480 | that will achieve the diversity the university seeks.
00:02:28.760 | Before the Supreme Court ruling, nine states, including Washington,
00:02:33.200 | Michigan and California, already banned the consideration of race in higher education.
00:02:38.120 | So the decision is final now.
00:02:41.160 | But what does this mean after affirmative action has been banned?
00:02:44.880 | Well, I'm not sure too much will change because I think colleges
00:02:49.000 | will just simply do a workaround, private colleges, at least,
00:02:51.760 | who want to mold and escape their incoming class how they see fit.
00:02:57.600 | I think colleges will just say, well, here's a supplemental
00:03:01.320 | essay question that asks about your background.
00:03:03.640 | Tell us about who you are, where you come from.
00:03:07.440 | What about your heritage, your culture, your ethnicity, your race, your anything?
00:03:13.600 | And I think that's the simplest workaround you can have
00:03:16.920 | unless the Supreme Court then specifically says you cannot ask in any essay
00:03:22.240 | about anything about a background, applicant's background.
00:03:25.120 | I just don't think it really is going to change the dynamics of private colleges
00:03:31.200 | and how they select their incoming class.
00:03:33.840 | I also think there's going to be continued momentum going forward
00:03:37.920 | regarding making SAT and ACT optional or completely application blind.
00:03:44.400 | So where colleges don't accept these scores at all.
00:03:47.280 | And this is another way for colleges to select students based on a more holistic
00:03:53.440 | view instead of a more objective view in terms of the test scores.
00:03:58.560 | There's still going to be grades involved.
00:04:00.480 | But as any administrator knows, grades in schools are hard to compare.
00:04:06.120 | There's different GPA scales, different rigors, but grades will still be involved.
00:04:13.000 | So for the remainder of this podcast, let's talk about the pros and cons of
00:04:17.440 | affirmative action, and I want to share my views as an Asian-American about
00:04:22.080 | affirmative action, because I am debating on whether to pay private grade school
00:04:26.880 | tuition for 13 years for each of my two children.
00:04:30.000 | Can you imagine paying $500,000 for 13 years of private grade school tuition
00:04:36.200 | only for your child to go to Penn State instead of UPenn?
00:04:40.880 | And now no offense to Penn State graduates out there and students, it's
00:04:44.160 | a fine, fine university, go Nittany Lions.
00:04:46.680 | This was just a headline I read on my Bloomberg terminal back in the 2000s,
00:04:51.240 | and it has stuck with me ever since, given I think about financial returns all the time.
00:04:57.560 | As a public high school and public college graduate, my preference is for
00:05:03.320 | public schools because things have worked out fine for me, but I am only one example.
00:05:10.320 | Public schools are where kids interact with a wider range of
00:05:14.000 | socioeconomic backgrounds.
00:05:15.880 | I think that's a really good thing because the real world is diverse.
00:05:19.400 | There are also more student conflicts and fights in public schools, which
00:05:25.280 | may help toughen a kid up.
00:05:26.760 | The most violence I have ever experienced in my life all came
00:05:30.880 | from my time at public schools.
00:05:32.800 | So if you don't like violence, well, maybe public schools might
00:05:37.200 | not be the right path for you.
00:05:39.040 | But if you're okay with the occasional conflict, so long as your
00:05:41.760 | child doesn't get seriously hurt, well, maybe public schools will be fine
00:05:45.960 | because if you can survive that type of conflict and violence, I think it
00:05:50.280 | will toughen you up in the future.
00:05:51.480 | Or it could crush your soul.
00:05:53.920 | So you've got to figure out what's the best for your child.
00:05:56.880 | So first of all, let's talk about the arguments for affirmative
00:06:00.680 | action in college admissions.
00:06:02.120 | One, promoting diversity.
00:06:04.520 | Two, addressing historical disadvantages.
00:06:09.280 | Three, ensuring equal opportunity.
00:06:12.040 | Four, enhancing educational benefits.
00:06:15.680 | Five, promoting social mobility.
00:06:18.920 | Six, meeting legal and moral obligations.
00:06:23.520 | Those are the positives.
00:06:24.960 | Now, arguments against affirmative action in college admissions include
00:06:29.280 | one, reverse discrimination.
00:06:31.800 | Two, undermining meritocracy.
00:06:35.080 | Three, stereotype threat.
00:06:38.640 | Four, it disadvantages non-underrepresented groups.
00:06:43.040 | Five, lack of individual assessment.
00:06:47.360 | Six, there could be unintended consequences.
00:06:51.560 | Seven, there could be perpetuating division of races.
00:06:56.760 | The more we talk about race, it seems like the more we divide races.
00:07:01.160 | So what are my thoughts on affirmative action when I was a student?
00:07:05.480 | As someone who came to America as a high school freshman in 1991, I felt I had no
00:07:10.920 | say about affirmative action whatsoever.
00:07:13.560 | I had not suffered or benefited from my race given I grew up in Zambia, the
00:07:18.760 | Philippines, Japan, Taiwan, and Malaysia because my parents worked at the US
00:07:23.800 | Foreign Service.
00:07:25.160 | I understood my parents were middle class given they worked for the US State
00:07:29.360 | Department.
00:07:29.680 | We lived in a modest townhouse and drove an eight-year-old Toyota Camry.
00:07:34.440 | Camry was actually an upgrade from the paintless 1976 Datsun we drove in
00:07:38.960 | Kuala Lumpur, Malaysia.
00:07:40.280 | I mainly wanted to go to a public university because it was cheaper.
00:07:44.320 | I felt it was absurd to spend over $20,000 a year on private tuition at the
00:07:50.800 | time when we could spend just $2,800 a year.
00:07:53.760 | It didn't make sense to me how private school could be seven, eight, nine times
00:07:59.360 | more expensive.
00:08:01.480 | I remember I was working at McDonald's, the local McDonald's in McLean, Virginia
00:08:05.480 | for $4 an hour.
00:08:06.760 | Then I got a raise to $4.25 an hour.
00:08:09.520 | I was on my feet for five, six hours a day flipping those burgers and grilling
00:08:15.840 | those sausages.
00:08:16.720 | It was no fun.
00:08:17.760 | I was thinking to myself, "Man, worst case scenario, if I went to college, I went to
00:08:24.320 | the college of William & Mary and I couldn't get a job, I would just always go
00:08:27.920 | back to McDonald's for hopefully $4.50 an hour at that time or maybe $5 an hour at
00:08:32.840 | that time and then pay back my parents the $2,800 a year in tuition."
00:08:37.520 | Virginia had the University of Virginia, William & Mary, Mary Washington, James
00:08:43.640 | Madison, George Mason and Virginia Tech at the time.
00:08:46.000 | So based on the college rankings, these were great schools, good enough schools
00:08:50.720 | for me to attend, especially for the cost.
00:08:53.720 | And I knew in high school, I knew I was neither gifted academically nor
00:08:59.240 | athletically to get into a top 20 private college, private university with
00:09:04.600 | scholarships.
00:09:05.400 | So I didn't even bother applying.
00:09:07.360 | Private college tuition was just simply too much to bear for our household and I
00:09:12.320 | wanted to pay my own way eventually.
00:09:14.560 | And it was when I got to the United States that I start learning more about
00:09:20.000 | slavery and other historical injustices against blacks and other minorities in
00:09:24.880 | America.
00:09:25.360 | So obviously I became a proponent of affirmative action because who wouldn't
00:09:30.360 | want to right the wrongs of the past?
00:09:33.040 | If we have the opportunity to help, we must help.
00:09:36.160 | Even though I was waitlisted from a couple of colleges, I never felt like race
00:09:41.360 | was a deciding factor.
00:09:42.440 | I felt like my mediocre SAT score and my 3.68 GPA simply weren't good enough to
00:09:49.760 | get in.
00:09:50.160 | My essays probably didn't sound very natural either since I used a lot of SAT
00:09:55.720 | vocabulary words.
00:09:56.800 | Oh, the irony.
00:09:58.560 | I remember my sister saying, "You sound like a robot."
00:10:01.760 | But I didn't really change because I thought that's what college admissions
00:10:06.600 | officers wanted to hear.
00:10:08.000 | They wanted to hear kids who could talk about starboard or portside for their yacht
00:10:13.840 | that they don't own, you know?
00:10:15.680 | Funny, funny words that I had no idea about, but I just looked it up in the
00:10:19.200 | dictionary and said, "Okay, this is what they want.
00:10:22.680 | So this is what they're going to get."
00:10:23.800 | And I never felt some undeserving kid got into a better school than me due to their
00:10:29.520 | race.
00:10:29.920 | Instead, I was just thankful that I got into the College of William and Mary.
00:10:33.920 | William and Mary and UVA were my two target schools and they were considered two of
00:10:39.760 | the best schools in Virginia at that affordable price.
00:10:43.800 | And yes, I absolutely did experience racism in Virginia.
00:10:46.760 | The KKK left flyers at my ex-girlfriend's home one day, maybe because they saw us
00:10:55.000 | eat at a greasy spoon diner one day in Abingdon, Virginia.
00:10:58.440 | And maybe they followed us back and they tried to threaten us.
00:11:02.680 | Yes, I've been called names during high school and college.
00:11:07.000 | I've experienced all those things.
00:11:08.720 | But as I said in the beginning, it was due to these experiences that have toughened me
00:11:15.120 | up, that have made me, well, not wilt like a flower because of name calling, that have
00:11:22.000 | made me stand up more for myself to fight for myself and now for my family.
00:11:26.920 | And you know what happened after each racist experience?
00:11:30.680 | Well, it made me open my eyes even further and lit a fire in me to achieve financial
00:11:36.840 | independence, ASAP.
00:11:38.720 | And that meant studying hard, networking, getting the best job I could, putting up
00:11:44.280 | with BS at work, continuing to grind and grind and grind so that one day I could be
00:11:50.280 | beholden to no one.
00:11:51.720 | So I appreciate those difficult experiences.
00:11:54.520 | So what now?
00:11:56.200 | What are my thoughts on affirmative action as a father of two children?
00:11:59.680 | Over 30 years have passed since I first applied to college.
00:12:03.720 | And I have been wondering how long affirmative action in college admissions would
00:12:08.240 | continue. And now I know on June 29th, 2023, that it's supposedly not going to
00:12:14.480 | continue anymore. I do believe society should still take action to right historical
00:12:19.480 | wrongs. The dilemma, the question is to what degree?
00:12:24.120 | When I see Asian-Americans with 1500 plus SAT scores and 4.0 plus GPAs regularly get
00:12:31.520 | rejected by top 20 private universities, I feel like there's no hope for my children to
00:12:37.440 | getting into any of those top universities.
00:12:39.440 | I don't want them to try really hard during grade school only to be told 13 years
00:12:45.240 | later they aren't good enough because of their identity.
00:12:47.960 | I think all of us would agree that would really stink.
00:12:51.360 | We also know that many private universities game the system by accepting wealthy,
00:12:57.480 | underrepresented minorities from outside the U.S.
00:13:00.200 | to help fulfill their diversity requirements.
00:13:03.160 | And that's not right since we're trying to help Americans who were screwed over in the
00:13:08.560 | past, not people from other countries.
00:13:11.040 | So today, I feel that affirmative action based on wealth and whether one has a
00:13:16.920 | disability seems like a fair solution.
00:13:19.280 | If you are poor, you may not have the same family support and resources to do well in
00:13:25.440 | school. I didn't grow up poor, but I still had to go to the library or Barnes and Noble
00:13:30.240 | and flip through those Princeton SAT preparation books that cost like $30 at the
00:13:35.880 | time. And I couldn't afford to buy those.
00:13:38.080 | I thought I was learning how to be a better test taker by skimming the questions and
00:13:42.560 | answers. But in reality, I was fooling myself by just looking at the book and not
00:13:48.080 | really going deep.
00:13:49.040 | My rich classmates at McLean High School, on the other hand, had parents who sent them
00:13:54.240 | to $2,500 Princeton Review SAT courses.
00:13:57.640 | Of course, they ended up scoring better than me.
00:14:00.200 | Well, I don't know. Maybe that's an excuse, but I think there's a high correlation with
00:14:05.280 | paying for those Princeton Review classes and doing better on the SATs.
00:14:08.920 | Otherwise, those classes wouldn't be in business.
00:14:11.880 | How is a middle class or poor kid supposed to pay $2,500 to take those classes?
00:14:17.800 | No way. I had wealthy classmates.
00:14:20.480 | One guy named Conrad, he went to Columbia and another woman named Maureen, she went to
00:14:25.680 | Dartmouth. They were rich.
00:14:27.440 | Their parents were rich.
00:14:28.960 | It was obvious. And they were able to get ahead.
00:14:31.400 | And like I said earlier, I knew we weren't rich, so I was happy, happy to go to a local
00:14:38.560 | state university.
00:14:39.600 | I also strongly, strongly believe we should fight for those with disabilities.
00:14:45.000 | Roughly 15 percent of the world's population, one in five, has some sort of disability,
00:14:49.920 | minor or major that may make it more difficult to compete.
00:14:54.560 | For example, let's say you have a visual impairment where no matter whether you have
00:15:00.040 | contacts or glasses, these things cannot correct your vision to 2020 like most other
00:15:06.840 | people. If this is the case, you may have a more difficult time seeing the chalkboard or
00:15:11.920 | the whiteboard in class.
00:15:13.600 | The questions on exam may also be harder to read because the font size is too small.
00:15:19.120 | As a result, you might zone off or just pretend you can see as a teenager just to fit in.
00:15:25.320 | At the very least, you may need more time on your exams.
00:15:29.720 | So hopefully the parents or you speak up for yourself in terms of what you need to equal
00:15:36.040 | the playing field. However, if you tend not to speak up or if you don't speak up at all,
00:15:41.360 | you may fall behind your peers who get to learn in full 2020 vision.
00:15:45.760 | If you were born with a disability that makes it more difficult or impossible to see, hear,
00:15:51.680 | move, process, socialize and understand, competing will likely be more difficult.
00:15:59.840 | So why not fight for those who were born with disabilities that make it more difficult for
00:16:05.960 | them to compete? I think it's a no brainer.
00:16:08.360 | I think it's a no brainer.
00:16:11.600 | Over 60 years after affirmative action was introduced, I'd prefer to see economically
00:16:17.440 | disadvantaged kids from all races and kids with disabilities from all races get more
00:16:24.480 | help instead.
00:16:25.600 | In a very big way, I am also an educator.
00:16:29.440 | Financial samurai should be for everyone.
00:16:32.160 | When I write my articles on financial samurai or I'm recording podcasts on the
00:16:36.760 | financial samurai podcast, I'm not thinking about race of the reader or the listener.
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00:17:09.040 | trying to gain financial freedom sooner rather than later.
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00:17:15.400 | All the content on financial samurai is free, including my weekly newsletter at
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00:17:23.480 | And it's free because my main goal is to help educate folks about money.
00:17:30.360 | I've already got my quote endowment, which consists of our investments that generate
00:17:36.240 | livable passive income.
00:17:37.480 | So charging a fee to access my content doesn't feel right.
00:17:41.720 | It's not my main goal to make money.
00:17:44.360 | Money will come on the side.
00:17:46.240 | But really, it's the stories that I hear from you through your emails and your
00:17:51.360 | comments that say so and so article or so and so podcast episode five or six or seven
00:17:56.920 | years ago helped make a difference because, man, since starting Financial Samurai in
00:18:01.240 | 2009, so many of our lives have changed and hopefully for the better.
00:18:06.120 | Right. We became fathers and mothers.
00:18:09.320 | We changed jobs and joined startups or joined big corporations.
00:18:14.400 | We got fired, but hopefully we got a severance.
00:18:16.920 | We were able to save and invest for the future and benefit from the bull market.
00:18:22.880 | Our parents passed away, but we were able to manage their estate in an orderly
00:18:28.320 | manner. Life continues to change and go on.
00:18:31.680 | And that's why I'm going to continue to write and record.
00:18:34.160 | I don't want anybody to be excluded from learning about personal finance if they want
00:18:38.760 | to. But maybe some universities do in order to maintain their air of exclusivity.
00:18:45.640 | What I think will be really interesting going forward is whether affirmative action for
00:18:50.680 | legacy students will go away, because if you look at the legacy student data admissions
00:18:55.720 | rates, they are way higher.
00:18:58.240 | We're talking five to eight X higher than the general pool.
00:19:03.280 | So if you just happen to be born into a wealthy family where your parents went to these
00:19:08.560 | prestigious schools, well, is it fair that you got a, let's say, 33 percent acceptance
00:19:14.960 | rate chance versus the general pool of five point nine percent?
00:19:19.120 | If your parents are able to donate 50 million, 100 million dollars to a school wing, is
00:19:24.880 | it fair that you face a 42 percent acceptance rate if you're on the dean's interest
00:19:30.440 | list versus a six percent rate if you're not?
00:19:32.960 | Or if you're a child of faculty or staff, is it fair that you have a 46.7 percent
00:19:39.000 | chance of getting in versus only a six point six percent chance?
00:19:42.560 | Maybe it's fair. Maybe it's not.
00:19:45.200 | But if we're trying to diversify the student body or if we're trying to be fair,
00:19:50.640 | well, I think legacy admissions probably has to change.
00:19:55.480 | In conclusion, let's agree that the ultimate goal of affirmative action is to provide
00:20:01.120 | upward mobility for historically disadvantaged people.
00:20:04.880 | After generations of discrimination, the compounding effects can be extremely
00:20:10.840 | detrimental. We all know the positive compounding effects of
00:20:15.680 | investing and we can see how that really builds over just 10 years, 20 years.
00:20:20.920 | But if we're talking about getting shut out from opportunities such as housing, jobs,
00:20:25.840 | colleges for generations, well, of course, the playing field won't be level.
00:20:31.680 | And we should do things to help those who have been disadvantaged.
00:20:36.240 | Unfortunately, affirmative action in college admissions is often perceived as a zero
00:20:41.280 | sum game. And now it's gone.
00:20:44.000 | So we've got to figure out different ways to move forward, whatever side you're on.
00:20:50.480 | I believe the best policy is to control what you can control, except that society is
00:20:57.880 | the way it is, except the Supreme Court rulings for whatever they may be.
00:21:02.640 | You can do things as a parent and as a student to help ensure that you're going to do
00:21:08.800 | better in life. Some of the things include spend as much time with your children as
00:21:12.640 | possible to educate them about the ways of the world.
00:21:15.200 | Have a harmonious relationship with your significant other to provide more love and
00:21:20.880 | support at home. Maintain or start a lifestyle business until your kids graduate
00:21:25.480 | college to teach them business and provide career insurance just in case they can't get
00:21:30.120 | a job. You might want to write multiple books.
00:21:33.160 | Doesn't have to be a traditionally published book.
00:21:35.040 | It can be e-books to set an academic example about the importance of reading and
00:21:39.880 | writing while your kids are in school.
00:21:42.680 | You can teach them a second language to provide them with more opportunities if the
00:21:47.720 | English world shuts them out.
00:21:49.640 | You can invest and maintain a rental property portfolio so that they have housing
00:21:54.880 | security just in case.
00:21:56.960 | You can take out term life insurance policies so that they will be fine if you were to
00:22:03.240 | die prematurely.
00:22:04.320 | You can teach them communication skills to help them build a better personality and
00:22:10.120 | better ways to connect with other people.
00:22:12.760 | You can encourage them to try harder and build grit because effort is what they can
00:22:18.480 | control. And finally, you can teach kids to love who they are to help build their
00:22:24.280 | confidence and self-esteem.
00:22:26.680 | I think spending more time educating our own children is the biggest win.
00:22:31.400 | We shouldn't outsource all our children's education to schools.
00:22:36.120 | It doesn't make sense.
00:22:38.000 | I think if we can spend more time on the weekends and the mornings and the evenings
00:22:42.080 | talking about practical education, practical knowledge, I think that's going to go a
00:22:47.960 | long way to helping them succeed.
00:22:49.760 | Where you go to college matters, but whether you go to an accredited four-year
00:22:54.720 | college or not matters way more.
00:22:57.280 | Either go to a trade school or go to a reputable college that is affordable.
00:23:01.760 | The more affordable education you can get, generally the better.
00:23:06.160 | The thing is, most of us aren't attending one of the top 25 private colleges in the
00:23:10.960 | nation. Therefore, affirmative action probably has little to no effect on the
00:23:15.600 | majority. Schools like Harvard and UNC Chapel Hill, these are elite schools.
00:23:20.760 | And just be frank, most of us can't get into these elite schools.
00:23:25.480 | I know I couldn't, but I still turned out OK because I was able to go to college and
00:23:30.040 | apply my knowledge and learn and build practical skills.
00:23:33.960 | All right, everyone, I hope I provided a balanced view on a very contentious topic.
00:23:39.800 | I know it's not easy, but I hope we can all have an open mind and move forward and
00:23:44.200 | take action to better our lives and the lives of people around us who we care about.
00:23:49.200 | If you enjoyed this episode, I'd love a positive review.
00:23:52.680 | Please don't forget to subscribe to my weekly newsletter at FinancialSamurai.com/news
00:23:59.640 | And to read the best personal finance book out there, In My Biased Opinion, pick up a
00:24:04.160 | copy of Buy This, Not That at FinancialSamurai.com/buythisnotthat.
00:24:10.880 | Take care, everyone.