Saturday, July 25, 2015

Minority Wars: What is the "Brand Value" of a label?

From Breitbart

Minority Wars: Why The Next Ten Years Will Set Everyone Against Everyone

So guess what happens when you tell everyone that their worth, their ability, their right to speak on certain subjects and – shudder – their “privilege” is based on what they were born with, rather than any choices they’ve made or who they are?


This is what the future of progressivism looks like: blacks fighting gays fighting lesbians fighting trans fighting everyone else. It’s the iron law of victimhood-driven identity politics. Someone has to win, and everyone else has to lose.


If the observer can step back and gain a little bit of perspective,  one soon notices the same frantic braying that one hears over
  • Ford vs. Chevy
  • Nike vs. Adidas
  • Pespi vs. Coke
  • Android vs. IPhone
  • University of This vs That State University
  • Taco Bell vs. Subway vs. McDonalds vs. Burger King
The anger, virtol, destroyed careers and property are ultimately about defending Brand Value in a stagnating or declining market.

The value of Brand Value


Brand Value is why two otherwise similar articles of clothing (basketball shorts, for example) will vary in price from $12 to $120.

The calculation of Brand Value is a frequent exercise in Academia and in the financial world.  Anybody with access to a competent search engine can type in "Brand Value McDonalds" and in 0.36 seconds you will learn that it is valued at $37.4 Billion dollars (at least on 7/25/2015 at 10:35 EST).  Ford Corporation used it Brand Value as collateral for a $23.6 Billion loan in late 2006.

There is little stomach in Academia or the corporate world for discussion about the Brand Value of being a minority.  The topic is toxic.  It would destroy any tenure track scholar.  It would likely get any corporate minion fired.

What is the Brand Value of being the alpha minority?


The ERJ Think Tank lacks many of the resources available to larger think thanks.  Assumptions will be made and shortcuts will be taken.  The value that is calculated will be a couple of stakes in the ground, an estimate, a first order approximation.

Approximation one


Visualize a promotional situation.  Further visualize a pool of candidates with eight equally competent applicants.  One of the candidates is an alpha minority.  It is a foregone conclusion that the alpha minority candidate will receive the promotion.

The median starting salary for college graduates in 2014 was approximately $45K/year.  Assuming 3% annual raises, an amount that nullifies the effects of inflation but no gain in real bying power, that college graduate will earn $3.4M over a 40 year career.  This is a conservative estimate because it assumes there will be no "real" pay increases based on skill growth.

A typical "step" in midrange pay scale for a promotion is 25%.  Therefore, it is reasonable to assume that the alpha minority will be one pay scale higher for nearly all of their career...that is, they will make 25% more than their cohorts who are blocked in one pay grade below them.

One statistical subtlety is that on a level playing field and a pool of eight qualified candidates there is a one-chance-in-eight that the alpha minority would have received the position based on random chance.  So that 12.5% "random chance" must be backed out of the Brand Value calculation.

Brand Value (alpha minority) = $3.5M*25%*(100%-12.5%) = $765K


What does America look like? 

Let's look at that pool of eight candidates.  If that pool is a representative cross section of America then half the candidates will be women.  One person will identify as African-American (14% is 1-in-7), one Hispanic (19% is one-in-six)...one of whom will be a woman.  There is about a fifty percent chance that one of the eight candidates will identify as LGBT et al.  The position of alpha minority will be highly contested.


Seven hundred, sixty-five thousand dollars is a substantial amount of money. I understand why the position of "alpha minority" is defended with great vigor.  The anger over Rachel Dozal was two-fold:  She was obviously a woman but then self-identified as an African-American to usurp the position of alpha minority....thus blocking another out of the.$765K identity.  The other thing she did is that she diluted the Brand Value of African-American minority status as surely as a container ship loaded with counterfeit Gucci handbags dilutes the value of the real thing.


But is eight the right number? Many corporations use a self-nomination system to avoid discrimination litigation based on claims of pre-screening.

Critique of analysis:
  • The $765K is not a net present value.
    • Rebuttal:  Conservative, off-setting assumption regarding wage growth was made.
  • Brand Value is typically an aggregate value.  Analysis looks at a very specific anecdote.
    • Rebuttal: Motivation is typically based on gains reasonably anticipated by the individual.  The scope of this essay was to put "a few stakes in the ground" with the hope of illuminating the motivation behind behaviors.
  • Basic premise is racist
    • Rebuttal: Basic premise was that all eight candidates were sufficiently qualified for the position.  No claims of "less qualified"  candidates being being in the pool or promoted were ever implied.
  • Not everybody is college track.  Analysis is not meaningful for vast majority of "alpha minority"
    • Rebuttal: Non-college track will be examined in a future essay.  The comparison will be between State Corrections Position (via performance on Civil Service Exam) vs. General Labor.  This analysis is analogous to sinking a single test bore to assay the extent of an ore body.
To be continued...

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