Until 1960 or so, the percentage of people getting college degrees was relatively low. There was plenty of work for people who had ‘merely’ graduated from high school, and a high school graduate could support a family.
Then came the Vietnam War, where the United States government would happily enslave high-school graduates, but not students in college. The number of students entering college zoomed upward, and the number of colleges proliferated.
But the war ended in the early 1970’s, and the U.S. government stopped enslaving young men, although it does reserve the capability to start doing so at any time.
Yet, despite this pressure, the number of people entering college continued to increase. Why? Quite simply because it started to become difficult for a high school graduate to find a job. An increasing number of companies started demanding a college degree for jobs that clearly don’t require anything more than the education that could be acquired at a half-way decent high school.
Why would employers do this? What could prompt such a strange change? As usual, dig down into the matter, and the answer becomes clear. In a paper posted at the John William Pope Canter for Higher Education, Bryan O’Keefe and Richard Vedder argue that the reduced employment opportunities for high-school graduates and the resulting rise of the higher education bubble is an unintended consequence of the 1964 Civil Right Act, namely this part of Section VII:
It shall be an unlawful employment practice for an employer –
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.
At the time this law was passed employers routinely classified prospective employees via pre-employment testing. This testing was used to determine things like knowledge, technical aptitude, personality compatibility and, yes, the race of applicants. At the time the law was being debated, its opponents raised the objection that this law could outlaw non-racist testing alongside racist testing. To which the proponents of the bill replied:
There is no requirement in Title VII that employers abandon bona fide qualification tests where, because of differences in background and educations, members of some groups are able to perform better on these tests than members of other groups. An employer may set his qualification as high as he likes, he may test to determine which applicants have these qualifications, and he may hire, assign, and promote on the basis of test performance.
Of course, like Madison’s claims that the Federal Government would obviously be limited to the powers described in Section 8 of Article I of the U.S. Constitution, these legislators claims did not survive actual contact with the courts. In the case Griggs v. Duke Power, the U.S. Supreme Court described what criteria can be used for pre-employment testing:
- A test where members of one race performed more poorly than members of another race – demonstrating a “disparate” performance – was assumed to be discriminatory with respect to race, even if that was not the intention of the test.
- Tests with disparate results are illegal unless the test has a direct business necessity.
Since, most businesses weren’t interested in wasting money on tests that were not necessary to screening out unfit employees or identifying the most fit employees, they were stunned. The Supreme Court had a very complicated definition of what constituted “Direct Business Necessity”, one that was difficult to meet and gave considerable deference to the employee of the Equal Opportunity Commission who was deciding whether or not to accuse a company of illegal discrimination. Only the simplest tests, such as requiring a prospective driver to pass a driving test could reasonably pass muster. Other tests, which businessmen clearly felt were useful to reducing the risk of hiring the wrong person for the job, now could get them sued.
Companies began casting about for a way to screen out the-incompetent or unfit in a way that would not result in them being sued. The simplest solution is to demand a college degree. Any racial discrimination demonstrated in the pool of degreed people would be the colleges’ liability, and the business could get on with the business of hiring new employees without being worried about lawsuits.
It has taken thirty years for this unfortunate unintended consequence to play out;
- People entering the workforce have been kept idle for four years unnecessarily.
- People entering the workforce are saddled with debts that are difficult to pay off.
- Colleges have gotten away with lowering educational standards because their graduates are in such high demand.
When summed across the millions of people who have entered the workforce in the last two decades, the economic costs imposed by this well-intended but horrendously misguided effort are staggering. They include
- Almost 100 million man-years’ lost productivity.
- An additional 10 million man-years spent paying off college loans
- Increased pressure on children to engage in organized activities designed to win the child a scholarship at the expense of their personal development.
Had the proponents of the Civil Rights Act limited their aim at racial discrimination by the government, they would have been crafting a very socially beneficial law. But by seeking to use the law to force people not to racially discriminate, they wreaked massive damage on the economy. Ironically, this damage disproportionately affects minorities who are far more likely to be at the mercy of awful government schools than other ethnic/racial groups.