Planet Money – Two Indicators: After Affirmative Action & why America overpays for subways

Intro

In this episode of the “Planet Money” podcast, titled “Two Indicators: After Affirmative Action & why America overpays for subways,” the hosts explore two distinct topics. First, they discuss the recent Supreme Court ruling against Harvard and UNC, which ended the practice of affirmative action in college admissions. Then, they delve into the reasons behind the high construction costs of American public transit projects, particularly subways.

Main Takeaways

Affirmative Action and College Admissions

• The Supreme Court ruled against Harvard and UNC, ending the practice of affirmative action in college admissions.
• Affirmative action is a general admissions practice that provides preferences based on ethnicity to increase enrollment of underrepresented minority students.
• The goal is to create a more racially diverse student body, and it’s used in 25 states and hundreds of private universities.
• An applicant’s race or ethnicity can make a difference in their chances of admission, with considerable admissions advantages for Black and Hispanic students.
• California banned affirmative action in public universities 25 years ago, providing clues to what might happen nationwide after the Supreme Court’s decision.
• The end of affirmative action in California led to a huge drop in the number of underrepresented minority students attending the most selective public universities.
• Black, Hispanic, and Native American students on average go to slightly less selective schools, while white and Asian students on average get to go to slightly more selective schools.
• Students from underrepresented backgrounds who might have gotten into top-tier schools just a year before wound up at less selective schools, leading to a 5% decline in earnings in the long run.
• The end of affirmative action was a large-scale, statewide natural experiment that provided valuable insights into the effects of race-based affirmative action programs on university admissions and long-term outcomes for students.
• Affirmative action ban had a 5% decline in earnings for black and Hispanic students who were previously admitted into selective universities.
• White and Asian students who replaced them experienced no decline or a slight decline in their future earnings.
• Black and Hispanic students gained more from the education and networks available at selective universities.
• Affirmative action increased the total size of the economic pie of California universities.
• Predictions of a nationwide version of what happened in California with a drop in enrollment for black, Hispanic, and Native American students at highly selective schools and an increase in the income gap between white and Asian graduates and black, Hispanic, and Native American grads.

America’s Expensive Subway Stations

• American public transit projects have super-high construction costs compared to other countries.
• Station design is a big explanation for high costs, with nearly 80% of the construction costs coming from building stations.
• The full size of the subway station wasn’t apparent just from walking around the public area.
• The US has a tendency to outsource a lot more of the basic design work, boosting white-collar labor costs.
• Having more engineers and designers employed on staff can keep a check on designs and plans, and hourly wages are cheaper.
• Lack of coordination between government agencies is a major driver of costs in transit construction projects.
• Fragmented jurisdictions in the US contribute to costly delays in transit construction.
• Transit builders in America try to annoy as few people as possible, resulting in more expensive drilling methods.
• Unifying disparate interest groups is critical in the US where there are many veto points.
• Not scrutinizing price tags can result in less transit getting built.

Summary

Affirmative Action and College Admissions

The recent Supreme Court ruling against Harvard and UNC marks the end of affirmative action in college admissions. Affirmative action is a practice used in 25 states and numerous private universities to provide preferences based on ethnicity and increase the enrollment of underrepresented minority students. However, the ban on affirmative action in California public universities 25 years ago offers insights into the potential nationwide consequences. The end of affirmative action in California resulted in a significant decline in underrepresented minority students attending highly selective public universities, with black, Hispanic, and Native American students on average attending slightly less selective schools. This shift led to a 5% decline in earnings for underrepresented students in the long run. Conversely, white and Asian students who replaced them experienced no decline or a slight decline in their future earnings. Despite the decline in earnings, underrepresented students benefited from the education and networks available at selective universities, while affirmative action increased the overall economic output of California universities. These findings suggest a potential drop in enrollment for underrepresented students at highly selective schools nationwide and an increase in the income gap between white and Asian graduates and black, Hispanic, and Native American graduates.

America’s Expensive Subway Stations

American public transit projects, particularly subways, have significantly higher construction costs compared to other countries. The design and construction of subway stations contribute to the majority of these costs, with nearly 80% allocated to station building. The full size and complexity of subway stations are often not apparent to the public, leading to underestimations of costs. Additionally, the outsourcing of basic design work in the US increases white-collar labor costs. The employment of more engineers and designers on staff can help control designs and plans while reducing hourly wages. Lack of coordination between government agencies and fragmented jurisdictions further drive up costs and result in delays in transit construction projects. In an attempt to minimize disruptions and conflicts, transit builders in America employ more expensive drilling methods. Unifying the various interest groups involved becomes crucial due to the numerous veto points in the US. Neglecting to scrutinize price tags can lead to less transit infrastructure being built. Understanding these factors can help address the high costs of American subway construction projects and potentially reduce expenses in the future.

Conclusion

The “Planet Money” podcast episode “Two Indicators: After Affirmative Action & why America overpays for subways” explores the consequences of the Supreme Court ruling against Harvard and UNC, ending affirmative action in college admissions. It also delves into the reasons behind America’s high construction costs for subway stations. The ban on affirmative action in California provides insights into the potential nationwide effects, including a decline in underrepresented minority students attending highly selective universities and an increase in the income gap between different racial and ethnic groups. Understanding the factors driving up costs in American subway construction projects, such as station design, outsourcing, lack of coordination, and fragmented jurisdictions, can help address these issues and optimize future transit infrastructure projects.