Employers’ Growing Awareness: Not Every Job Requires a College Degree

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In a significant move, eleven states have announced the removal of college degree requirements from most jobs within their state executive branches. This bipartisan effort by reform-minded governors aims to reverse the labor market’s trend of imposing degree requirements on jobs that previously did not need them.

Degree inflation, which became prominent during the Great Recession, saw employers take advantage of a weak labor market to demand higher levels of education from job applicants.

Research shows that between 2007 and 2019, job postings requiring a four-year degree increased by more than 60%, even after accounting for changes in available job types.

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This phenomenon of degree inflation restricts good middle-class job opportunities for the 62% of adults without a bachelor’s degree. Traditionally, roles like secretaries or administrative professionals have been open to high school diploma holders, as the necessary skills were learned on the job.

woman exasperated

Around four in 10 recent college graduates work in positions that haven’t traditionally required a college degree.
(iStock)

However, this scenario is changing, as indicated in a recent report for the Foundation for Research on Equal Opportunity. In 1990, only 9% of secretaries held a bachelor’s degree. Today, that number has risen to 33%. A study conducted by Harvard Business School estimated that increased degree requirements could result in over 750,000 secretary positions being inaccessible to individuals without a bachelor’s degree.

This trend could be acceptable if obtaining a college degree led to higher productivity and increased salaries. The additional time and expense investment in education would be worthwhile if it yielded significant financial returns. While college education often pays off, if the number of college graduates exceeds the number of available college-level jobs, economic mobility will not be realized by all. Instead, college degrees will become more commonplace among middle-class workers.

For instance, in 1990, only 38% of prime-age workers earning between $60,000 and $80,000 per year (when adjusted for inflation) held a bachelor’s degree. Today, that proportion stands at 52%.

Research by Burning Glass Technologies and the Strada Institute reveals that around four in 10 recent college graduates work in jobs that traditionally did not require a college degree.

Furthermore, college graduates in non-college jobs earn over $10,000 less than their counterparts and face limited opportunities for upward mobility. Consequently, many struggle to repay their student loans, making it challenging to recoup the cost of their college degrees.

Fortunately, employers and policymakers are becoming aware of this issue. Since 2017, bachelor’s degree requirements have been removed from millions of middle-class job advertisements.

However, employers can do more to broaden opportunities for workers without degrees. They should ensure that automated recruiting systems do not exclude qualified applicants without degrees. Additionally, employers should explore and develop alternative credentials to assess applicants’ skills.

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For instance, in 1990, only 38% of prime-age workers earning between $60,000 and $80,000 per year (when adjusted for inflation) held a bachelor’s degree. Today, that proportion stands at 52%.

Governments can also contribute to this effort. The removal of most college degree requirements from jobs in 11 state executive branches is a significant first step. Additionally, states should ensure that occupational licenses do not mandate degrees unnecessarily. Some states, for example, require home interior designers to hold a bachelor’s degree in eight states and an associate degree in 19 others. These minimum education requirements should be reduced or eliminated wherever possible.

The federal government plays a role in fueling degree inflation by favoring traditional colleges and universities in terms of funding. While colleges offering four-year degrees benefit from Pell Grants, tuition tax credits, and subsidized federal loans, alternative postsecondary pathways like apprenticeships receive only a fraction of the funding. Consequently, employers often rely on a bachelor’s degree as a measure of competence, even though alternative pathways could prepare students for the workforce at a lower time and financial cost. Policymakers should revise funding streams to treat different pathways equally.

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A middle-class standard of living should not require a college degree. Unfortunately, degree inflation poses a threat to the opportunities of millions of hard-working Americans for upward mobility. Congress, states, and the private sector should prioritize efforts to combat degree inflation.

Reference

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