Degree Inflation and Economic Mobility

Image credit: Wall Street Journal

The conventional wisdom tells us that developing human capital is the key to economic development in the knowledge economy, and that helping more Virginians (and Americans) earn more college certificates and degrees is the key to building human capital. This is a core assumption behind Virginia’s Plan for Higher Education, which aims to make Virginia the best-educated state in the country by 2030, and the Virginia Chamber of Commerce’s Blueprint Virginia 2025, which highlights the necessity of building a talent pipeline, including making Virginia “the top state for talent.”

But Frederick M. Hess and Grant Addison with the American Enterprise Institute warn in a Wall Street Journal op-ed today that the emphasis on churning out college degrees can have an unintended effect: degree inflation. And degree inflation can have a pernicious effect: disparate impact on blacks and Hispanics.

“Some 51% of employers have rejected applicants with the requisite skills and experience simply because they didn’t have a college degree, according to a 2017 Harvard Business School study,” Hess and Addison write. “If current trends continue, the authors found, ‘as many as 6.2 million workers could be affected by degree inflation’ — meaning their lack of a bachelor’s degree could preclude them from qualifying for the same job with another employer.”

The Civil Rights Act of 1964 prohibits employers from discriminating on the basis of race, color, religion, sex or national origin. When practices have a disproportionate impact on minorities in the job selection process, employers must show that any requirements are directly job-related and an accurate predictor of job performance. Given all the legal scrutiny around employment tests, such as IQ tests, possession of a college degree is one of the few proxies for aptitude that doesn’t trigger a risk of litigation.

However, as George Mason University economist Bryan Caplan explained in a Bacon’s Rebellion interview published a week ago, only a small portion of the value of a college degree is what students learn in their classes. Employers regard a college degree mainly as a signal that a job applicant has the intelligence, diligence and social conformity required to earn a degree — all attributes that contribute to making a good employee. If the higher ed system cranks out more students with degrees, he predicted, employers will demand higher degree qualifications — in effect, creating degree inflation.

Hess and Addison also worry about degree inflation and its implications. They write:

In a 2014 survey, Burning Glass Technologies found that employers are increasingly requiring bachelor’s degrees for positions whose current workers do not have one. For example, 65% of job postings for executive assistant and secretary positions call for a degree even though only 19% of people currently employed in such roles hold a degree.

“The Harvard report found that groups with college graduation rates below the national average are disproportionately harmed by the practice,” they write. Smaller percentages of blacks and Hispanics than whites and Asians possess college credentials, squeezing them out of contention for more and more jobs. And with escalating college costs creating an affordability crisis for lower-income Americans, blacks and Hispanics remain disproportionately likely to fail to complete their degree requirements — and take on debilitating student loan debt in the process.

Bacon’s bottom line: If you’re looking for institutional racism in America, this is it. The impetus behind degree inflation isn’t racism, prejudice or a desire to discriminate. As with so many things, degree inflation is driven by the best of motives. But the unintended effect is highly damaging to blacks and Hispanics (as well as to poor whites and the poor of other ethnicities). When everyone has to have a college degree to get a job, those who are poorest, attend the worst schools, and graduate with the most inadequate academic preparation are the biggest losers.

It’s a shame that the social justice warriors don’t get this. Perhaps the myopia stems from the fact that so many SJWs come from academia, making them direct beneficiaries of the degree-inflation phenomenon. It’s much less discomfiting to focus on micro-aggressions or agitate about the statues of Civil War generals than confront the real forces hindering upward mobility for minorities in 21st century America.

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26 responses to “Degree Inflation and Economic Mobility”

  1. Steve Haner Avatar
    Steve Haner

    So, do you really think the country will be better off if fewer people – especially low income people or the “first in the family to go to college” group – achieve either bachelor’s degrees or some other commercially-viable technical training? Is that what you are suggesting?

    1. CrazyJD Avatar

      Steve: Your response is what’s called the fallacy of false choice. The choice is not fewer vs. more bachelor’s or other degrees. You would prove too much by forcing an answer to your question. Obviously, there are other possibilities, one of which is that there are far more important aspects to education than whether or not one goes to college. For example, I would posit that it’s far more important that our “lower” ed institutions (elementary, middle and high school) actually turn out pupils who can read, write, spell and do elementary math.

      Perhaps unintentionally, your question actually illuminates Jim’s basic premise: that college degrees are not the most important aspect of education.

  2. Rowinguy1 Avatar

    Which institution are you suggesting is racist here, Jim? Higher education, which provides the degrees, or the general business community which appears to be increasingly demanding them?

    1. I’m not saying anyone is racist. I’m suggesting that the unintended consequences born of the best intentions have a disproportionately negative impact on blacks and Hispanics.

      1. Rowinguy1 Avatar

        Ok, thanks, Jim. I was a little confused by the first sentence of the “Bottom Line.” Couldn’t figure the antecedents for either the “this” or the “it.”

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Our system of higher education and our “general business community” are working in close alliance to manufacture and inflate the demand for false and highly over priced false degrees. They need the ever increasing demand for these degrees in order to keep today’s corrupt system of higher education alive.

    3. There are unlimited choices compared to say 20 years ago. Many Virginia High Schools have eliminated vocational education and most pupils are on some kind of track to college. My sister was a HS Vocational teacher and is retired. But the school she taught at in Virginia does not have any vocational or occupational programs or courses any more. Most students are treated as though they must go to college.
      And, colleges and universities need these students to expand and build more buildings and spend more money. And a majority of these students borrow the money to go to college. And, more than half these students who have loan debt have no credentials to qualify them for jobs in today’s economy.
      Colleges have introduced new degree programs that require no science classes, no math classes and no advanced classes. And, this has been growing for decades until we are now reaching the crisis point.
      For example, I know two girls who got degrees from one of Virginia’s nationally recognized universities. Their degrees were in “General studies” and did not require math or science classes. In place of math they took Logic. And, instead of biology or other real science courses they took “The History of Science.”
      One of these young women got a job after a year as a receptionist at a real estate office and the other after 18 month got a job as a teaching assistant in an elementary school.
      This weakening of degrees came about initially to keep athletes on track but with expanding enrollments to all HS graduates it opened doors at many universities.
      Half of the graduates today have huge debts and have no occupational opportunities in a job market that is changing and will change dramatically in the coming decade…as Steve Case’s “Third Wave” hits our economy.
      The national student loan debt is racing toward $2 trillion and the government is printing the mooney. (Yes mooney.)

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Wade –

        Thank you again for your comments. You tell these truths with far more authority and knowledge than I can muster. What you say, and how you say it, and have just said it, should have enormous impact. These truths you speak should make us free. They leave us without any more excuses that would otherwise allow our current educational system to continue its abuse of our students and their future. It is a system that is built on lies, and bloat and gross inefficiencies. We cannot allow it to continue. To do so is reckless and immoral.

  3. Steve Haner Avatar
    Steve Haner

    An alternate explanation for what you describe is that employers are losing confidence in the high school diploma, which I understand. If I were hiring a secretary I’d be looking for at least a community college program graduate (especially a legal or medical secretary) or some comparable private program. I always needed a secretary who could correct my atrocious spelling and grammar.

    If your point is more people need to look at middle-level skills that don’t require a BA, but do require training beyond HS, then everybody gets that. But getting more and more low-income students into and through higher education is not a threat to them. Maybe somebody else, but not them.

    JD – I was typing my point about the loss of confidence in the HS diploma before I saw your post. Agreed, that’s a big part of this. And I agree that a degree is just a piece of paper (I saw The Wizard of Oz) but I think there is a valid belief that a degree demonstrates work ethic and at least some level of mastery. The reality is unskilled labor has very little value and that value is shrinking fast. The employers don’t provide the training and look to the schools.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      The value of a high school degree from a good school is being vastly underrated today in a effort to sell kids on the often false idea that they cannot succeed in their dreams and ambitions without going to a four year college. That is a lie.

      1. Andrew Roesell Avatar
        Andrew Roesell

        Dear Reed,

        What you write about the value of a good high school degree is exactly what we are doing for our children: A Classical, Christian education with Latin and math and science is where we are putting our money. After that, they will need scholarships and/ or work if they want to go to a 4-year college. We will strenuously warn them against borrowing money for a college degree, particularly in a Liberal Arts program.



        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          Andrew – You make good points. You also point up why good and excellent students suffer in today’s system as well as poor students.

          For example:

          In the 1960s, when I took the SATs, roughly 1 out of every 120 students who took the SAT scored 700 on their Verbal SAT test.

          Then, in the late 1960s, college education began its collapse. By the mid 1990’s, only 1 out of 313 SAT takers scored 700.

          You would think that out educators would have tried to fix the problem. But they apparently did not want to fix the real problem, because it might threaten the corrupt system they had by then built for themselves.

          So instead the educational establishment began to dilute the standards the student needed to achieve to get 700. Today, the 1960’s 700 SAT score that 1960 kid had to earn would get those very same kids a score of 760. That highly diluted 700 score today is a benchmark f0r getting into a highly selective (elite) college. This includes UVA today, except back in the 1960s the 700 score was worth a 760 today.

          Why the tremendous drop off in Verbal and reading skills?

          The reasons are many. One is that the educational establishment has not only dumbed down the testing but they have also dumbed down of reading quality of the text books students learn from and also diluted homework time and daily testing demands, all done in the name of equality. The result is nobody learns. Or at best nobody learns anywhere near close to their potential. And every body thinks learning in school is a big joke. And you can just slide by, being cool.

          That is not what I remember in high school in the 1960s. Back in the 1960s my high school classes were broken up into forms. There were 3. Greek was require in the top form. Latin was required in the middle form. Only English was required in lower form. Everyone learned at their own pace to their maximum potential. This was the old Jesuit high school model that succeed for All Kids, as best as I could tell. This included big urban schools back then in DC, where I lived.

          Today, I understand some are dumbing down college texts, thus too often giving college kids high school educations, or failing to give kids a good traditional high school education, much less college level work, much less a college level degree. That is one reason I say the system is corrupt top to bottom. The only winners are the administrators.

          1. Andrew Roesell Avatar
            Andrew Roesell

            Dear Reed,

            I have a friend who gave up teaching college in Alabama and now teaches at a religious “Prep” school in North Carolina. The low level of learning, and in some cases, intelligence, in the Alabama college, plus the attitude of the administrators made him glad to get out. It is intensely demoralizing to feel that one is constantly “casting one’s pearls” so to speak, with so little visible benefit to the learner. Better to excel in the “minor leagues” than to flounder in the “majors.”



        2. Andrew, you write about educational priorities that I agree with. The classics of Seneca’s time would still provide as a good educational foundation today as they did for our Founding Fathers, though a bit lacking in the STEM disciplines, which you would also remedy. The broader point, really, is that education — even for primary school kids — is about a lot more than passing SOL tests: it’s about learning to think, about sense of place, and confidence, and understanding enough about the world around you physically and socially and morally that you have a lifelong desire to learn more. Hopefully, many of your students have that desire when they leave your tutelage.

    2. I agree with Reed, it is a lie that a HS diploma alone is worthless. But the grade inflation Jim talks about is a fact, and secretaries today are being selected for hire only because they have a community college program under their belt. And there is some additional good that comes from the community college experience that dovetails with the “best educated Virginia workforce” theme. Whatever the justification, it’s time to consider the barrier we are placing in our young peoples’ path by not making community college, like high school, free. As Jim points out, the barrier is higher for most minorities.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Acbar –

        I fear making community college free. It fear that doing so will further devalue high school are the very time that we must muster all our resources (particularly moral) to rebuilt the quality and flexibility of our high schools as real teaching and character building institutions that arm kids to succeed in the modern world. I say this knowing that the best and last chance for the great majority of our students to get a good learning in the Arts and Sciences degree IS IN HIGH SCHOOL. Far to many of our kids within the middle and upper thirds of the bell curve desperately deserve that solid high school learning and are not getting it, killing their chances for an affordable REAL education.

        Beyond that, I agree totally with your comment that community colleges need a major retooling to give students the real tools they need to get the right kind of employment skills they need right out of high school at affordable costs that are far below the typical four year college. But this should not include liberal arts courses beyond those specifically designed to become job skills. This will cut out much of the fraud in our current four year college scam, the places where so many kids today learn nothing, or next to nothing while paying huge bills and learning so many bad habits.

      2. Now, this is the debate I would love see here: Reed, you are right on it, the nub of it. We’ve got to break the back of the cost burden we are shifting to young people today — and to their families who use up precious retirement and health contingency savings — by paying to overcome the expectations of employers for a “qualifying education” beyond high school.

        It makes no difference whether that expectation has arisen from job applicant credentials inflation, or the perverse moneymaking incentives of the higher educational institution, or faculty greed, or pressure on the students themselves to keep up with their peers, or all of the above: it’s there, and it is doing harm to so many who take the plunge and end up loaded with debt, and it leaves those who don’t take the plunge so far behind. We talk about the growing wealth differential in this country, we experience the political turmoil that is Trump, and somehow don’t make the connection to the differences in educational opportunity that become differences in economic opportunity.

        BUT — simply throwing money at subsidizing the four year residential college experience would be an extravagant solution. And simply turning our community colleges into crude proxies for liberal arts schools would be misguided as well as wasteful: they serve different purposes, different students, different goals, have different efficiencies. That’s why they are such a better solution for so many kids. But oh, how much of that task would be obviated if it were possible to “rebuild the quality and flexibility of our high schools as real teaching and character building institutions that arm kids to succeed in the modern world.” In high school, we already have the institution and the captive audience for passing along society’s finest mores, yet we squander that opportunity on the backs of overwhelmed, underqualified teachers and sloppy bureaucracy.

        Of course — if we could do the job right during high school, there would be no need for unemployable HS graduates and the demands from employers for higher credentials. But that’s where we are. And that’s what is driving all that student debt.

  4. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    I agree with much in this article. But it greatly understates the problem – its scope and its depth, and the vast harm it does to the great majority of all kids in college in ways that are almost too numerous to mention.

    Most all of our society and culture contribute mightily to feeding this problem instead of solving it. But serious educators know the harm that is going on. Like so many of us, few can find the courage to stand up against it, and speak the truth. To speak and act on the truth, unless properly handled, will threaten a crisis in Today’s higher education that is grossly overbuilt and over-funded, as well as bloated and grossly inefficient. This system will only get worse and worse, trying to maintain itself, absent courageous action. The alternative is collapse that forces great change. This collapse is inevitable, absent action now.

    Here is a statement I agree with:

    It’s a shame that the social justice warriors don’t get this. Perhaps the myopia stems from the fact that so many come from academia, and are direct beneficiaries of the corrupt system. It’s much less discomfiting to focus on micro-aggressions or agitate about the statues of Civil War generals than confront the real forces hindering upward mobility for all Americans today, save for our cognitive elite who are ever more concentrated within the top 5% of our high school graduates. But even these young elites will suffer greatly. They are increasingly unable to keep our republic alive.

  5. Steve Haner Avatar
    Steve Haner

    Maybe we should impose a bunch of tariffs and try to rebuild all those low skill industries where a simple HS diploma is sufficient, or even is not required! But in the world we have, unless you want to punch a cash register or pass out parking tickets, a real technical skill either learned during HS or better still in a coordinated program with the community college (dual enrollment) is required. I don’t advocate free community college but it needs to remain affordable, and I love the programs where employers help with the bills if the students get hired.

    Show up at Newport News Shipbuilding with a HS diploma a clean record and a clean drug test and yes, you will get a job, but you go right into training (which might take place at a community college) and if you want to succeed and make it into leadership, that training is just the start. The heart of that place is its Apprentice School, which has its 100th anniversary next year. It grants no degrees but its education output is second to none. Based on what I’ve seen that place produce, none of the arguments above weakens my conviction that education – rigorous and tough – is our only hope.

    Yep, the quality is badly slipping but I do not blame the schools entirely. As noted earlier, too many distractions, too little willingness to work, too much of the Lake Woebegon effect (all the children are above average.) The quality sucks, even in places you’d expect better. But when you find it, wow, stand back. When the SAT’s were higher, especially the English scores, how many books had those students read by graduation? How much composition was required in class? Was the phrase “binge watch” in the lexicon? The screens are making them all stupid.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      I agree with most everything – indeed perhaps everything you say Steve. Perhaps only another WW 11 will get us back on track. The more I look at this the more I come to realize the problem mostly moral. And the kids are crying for help. Most all of them. They want boundaries, They want to learn, and deeply know what is right from what is wrong. They want truth, not excuses. And they want a chance of built a life for themselves. But we are destroying their chances for a such an opportunity, or for any meaningful chance for it. Hell today, you got graduate for post grad school to have a chance to marry. Much less build a family.

      1. Steve Haner Avatar
        Steve Haner

        Interesting you would mention the war because it was the wave of higher education funded (subsidized) through the GI Bill and other federal programs that built that post-war society we all remember (probably through rose-colored glasses.) I guess Jim would have been issuing dire warnings…. My dad got his degree at Tech, and those land grant schools were created by….federal funding! Oh Dear God it’s everywhere! Didn’t they understand the dangers??

      2. Andrew Roesell Avatar
        Andrew Roesell

        Dear Reed,

        The old joke of the early Cold War was that if WW III will be fought with atomic bombs, WW IV will be fought with sticks and stones. No more wars, please! What we need is repentance and a return to the standards that still existed, though they were being eroded, before the 1960s collapse. Wars provide a short-term “focus” only. Societies that rely on wars as self-justification for their existence are both dangerous — and doomed.



        1. Steve Haner Avatar
          Steve Haner

          I wasn’t actually advocating another war to boost educational attainment. 🙂

  6. LarrytheG Avatar

    maybe a little late to this party…. but as usual , I try to get context by widening the focus to include other counties…. especially our peer industrialized competitors.

    Now all of those other countries also have the govt involved in education – at the primary and tertiary level and for some reason they all seem to be doing well… and we…not as well as we might, certainly ranking down the scale in comparisons … and from some points of view – downright terrible in most all areas.

    I’m of the view that never before in our history have there been so many ways for people to pursue an education except perhaps those folks who are trapped in economically poor neighborhoods with correspondingly poor neighborhood schools. Those kids are trapped by circumstances they have no control over and their fate , at best tenuous… because they truly do not get a basic education that will propel them through follow-on education cycles.. even with “help”, financial and otherwise; if they lack the fundamentals.. it’s going to be a rough ride.

    So .. what are we not doing that all the other industrialized countries are apparently doing with success?

    or maybe even a more wide open question.. what do we need to do to reform?

    I just don’t accept the ” we’re all messed up …and we are doomed, there is no way out”…. narratives.

    Not so much an optimist as much as I am a realist… to wit: we can sit around cursing the dark…from now until doomsday… or we can get off our collective fannies and work to get to a better place… if we could actually agree on how to do it!

  7. LarrytheG Avatar

    One of the questions we need to ask ourselves is this. Why, in today’s world where there are a plethora of options to become educated, far, far more than decades ago when there was no internet and school “choice” was really not even a concept – why – in today’s world are we failing to become educated to minimal standards – needed in the 21st century economy and equivalent to what our peer competitors are accomplishing?

    We can come up with all kinds of blame but can we take collective responsibility?

  8. College for all — but not college degrees // Joanne Jacobs

    More first-generation, low-income students are going to college — but not completing a degree, writes David Leonhardt in the New York Times. “The college-graduation rate for these poorer students is abysmal,” he writes.

    His chart, based on a new study in Demography, shows the growing graduation gap.

    Employers aren’t impressed by job applicants with “some college,” but no degree, writes Leonhardt.

    Since 2000, the average inflation-adjusted wage of workers with some college credit but no degree has actually fallen, by 2 percent, according to a recent report by the Economic Policy Institute. The average wage of college graduates is up 6 percent.

    College dropouts often “have to repay college debt without the extra earning power of a degree,” he writes. It’s “the worst of both worlds.”

    Already, some colleges have started to make impressive changes. Georgia State has raised its six-year graduation rate sharply. A network of 11 universities, including Kansas, Michigan State and the University of California, Riverside, are working together — imagine that — to share student-success strategies. In New York, community colleges in the CUNY network have created a program that nearly doubled graduation rates.

    Lavishing high-need students with support has improved graduation rates at the University of Texas and Wayne State in Detroit, writes David Kirp, a professor of public policy at Berkeley.

    UT has raised its four-year graduation rate and halved the gap between all students and first-generation, low-income and minority students.

    Wayne State lowered admission requirements to admit more students, then saw its graduation rate fall sharply, writes Kirp. Only a third of students — 13 percent of African-Americans, earned a degree in six years. Three years ago, the university started to turn that around.

    Both UT and Wayne analyze students’ grades, scores and other records to predict who’s likely to struggle. These students get help from the first day, before they ask for it.

    Advisers and counselors reach out, upperclassmen are hired as tutors, and “learning communities” of like-minded students offer a haven in the sometimes overwhelming big-campus environment. Bureaucracies that turned seemingly mundane activities like registering for classes into Kafkaesque experiences — “getting Wayned,” students at Wayne State used to call it — are being streamlined.

    UT offers its weakest students paid internships linked to their academic interests, writes Kirp. Wayne State provides “a summer program combining remedial math and reading with college-survival skills like time management.”

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