Hess and Addison argue that the rise of the diploma as a signaling mechanism dates back to the Civil Rights Act. As late as 1963, 84 percent of jobs required some sort of general aptitude or job-specific test during the interview process. When the Civil Rights Act of 1964 was drafted, though, it included language aimed at ensuring these interview exams were not stalking horses for discrimination. In the 1971 Supreme Court decision, Griggs v. Duke Power Company, the court ruled that employer tests were only acceptable if the material was job related (as opposed to general or aptitude based), and in cases where pre-employment tests have a disparate-impact on protected groups, employers must show both that the test is predictive of job performance and that there is no less-discriminatory method of separating out unqualified applicants. Grant and Addison argue that the fear of being sued pushed employers away from tests and toward the pursuit of BA holders, which serves to signal a set of core competencies, many of which are what we consider basic character and social skills, rather than hard skills.
One way of understanding recent history, therefore, is that changes in the law led employers to place a higher value on college diplomas at the same time that the availability of middle-skill jobs came under pressure from the rise of offshoring and automation. Both of these trends contributed to the polarization of the U.S. labor market, which provides high-skill, high-wage jobs at one end and low-skill, low-wage jobs at the other, with a hard-to-bridge chasm in between. Understandably, policymakers responded by devoting more resources to the higher-education industry, which was meant to act as just such a bridge.
But whatever hopes we had for higher education acting as our bridge from the Industrial Age to the Knowledge Economy, conservative thinkers are now urging a different path. For their part, Hess and Addison argue that we need to once again allow employers to select for skills, rather than for crude proxies of skill. They call on a sympathetic administration to begin bringing legal action against employers who insist upon college degrees for seemingly low-skill jobs under the same Griggs v. Duke Power Company precedent. College degrees are far from evenly distributed across racial and ethnic groups, and the fact that BA requirements have not already been challenged on these grounds is evidence of the rarefied place college education occupies in our culture.
While Grant and Addison focus on the demand for higher education, which they see as inflated by a signaling mechanism run amok, Oren Cass’s recent report focuses more on the supply of post-secondary opportunities suited to the non-college-bound. Specifically, he calls for shifting federal subsidies from traditional higher education to a new workforce training grant that would give employers a larger role in preparing the non-college-bound majority for success.