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Eleven states — and counting — have announced that they will remove college degree requirements from most jobs in the state executive branch. This welcome movement among a bipartisan group of reform-minded governors aims to reverse one of the defining trends of the labor market over the past several decades: college degree requirements for jobs that did not formerly need them.
This phenomenon, known as degree inflation, accelerated during the Great Recession as employers exploited a slack labor market to demand higher education levels from job applicants.
One study shows that between 2007 and 2019, the share of job postings requesting four-year degrees rose more than 60%, even after accounting for changes in the types of jobs available.
STUDY SHOWS EMPLOYERS ARE PUSHING TO GET WORKERS IN-OFFICE ON MONDAYS
Degree inflation closes off good middle-class job opportunities to the 62% of adults who lack a bachelor’s degree. For example, the role of a secretary or administrative professional has traditionally been open to job applicants with only a high school diploma. New secretaries have usually been able to learn their duties on the job.
Around four in 10 recent college graduates work in positions that haven't traditionally required a college degree. (iStock)
But that is changing, as I show in a recent report for the Foundation for Research on Equal Opportunity. In 1990, just 9% of secretaries had a bachelor’s degree. Today, the share is 33%. A Harvard Business School study estimated that rising degree requirements could close more than 750,000 secretary positions to workers without a bachelor's degree.
This trend might be benign if college degrees made workers more productive, raising their salaries. Young jobseekers might have to attend school for longer periods, but a significant increase in earnings could make the additional time and expense worthwhile.
It’s true that college often pays off. But if the number of college graduates rises faster than the number of college-level jobs, not everyone will realize economic mobility; college degrees will simply become more common among middle-class workers.
For instance, in 1990 just 38% of prime-age workers earning between $60,000 and $80,000 per year (in today’s dollars) had a bachelor's degree. Today, the proportion is 52%.
Around four in 10 recent college graduates work in jobs that have not traditionally required a college degree, according to research by Burning Glass Technologies and the Strada Institute.
College graduates in non-college jobs earn more than $10,000 less than their peers and have more limited opportunities for upward mobility. As a result, many do not earn back the cost of their college degrees and struggle to repay their student loans.
Fortunately, employers and policymakers are starting to wake up to the problem. Since 2017, bachelor’s degree requirements have disappeared from millions of middle-class job advertisements.
But employers can do more to expand opportunities to workers without degrees. Firms should ensure that automated recruiting systems do not filter out qualified job applicants without degrees. They should also work to identify and develop alternative credentials to assess applicants’ skills.
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For instance, in 1990 just 38% of prime-age workers earning between $60,000 and $80,000 per year (in today’s dollars) had a bachelor's degree. Today, the proportion is 52%.
Governments can help as well. The removal of most college-degree requirements from jobs in 11 state executive branches is a welcome first step. States should also ensure that occupational licenses do not unnecessarily require degrees.
For instance, in eight states home interior designers must have a bachelor’s degree, and 19 other states require an associate degree. States should reduce or eliminate such legal minimum education requirements wherever possible.
The federal government fuels degree inflation by keeping a thumb on the proverbial scales in favor of traditional colleges and universities. While colleges offering four-year degrees benefit from Pell Grants, tuition tax credits, and subsidized federal loans, alternative postsecondary pathways such as apprenticeships must make do with only a fraction of the funding.
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Employers therefore rely on the bachelor’s degree as an indicator of competence, even if alternative paths could prepare students for the workforce at a lower time and money cost. Policymakers should overhaul these funding streams to treat different pathways equally.
A college degree should not be a prerequisite for a middle-class standard of living. Unfortunately, degree inflation threatens to deny millions of hard-working Americans a fair shot at upward mobility. Congress, states and the private sector should make fighting degree inflation a top priority.