Universities have long been the gateway to white-collar jobs. But the hiring binge triggered by corporate tax cuts could shake that up.
The Trump tax cut may prove to be the catalyst for a long overdue shift in the way the United States credentials for jobs.
For white-collar jobs, there has been a steady trend towards a college degree as the standard credential since the 1950s. A recent Wall Street Journal article suggests this may be reversing.
The status quo has been a gravy train for colleges and universities. And it has been convenient and advantageous for businesses.
In the status quo ante, businesses largely incurred the cost of training employees. Relying on a college degree shifted this cost to taxpayers, parents and students. That’s obviously a bottom-line benefit to employers.
And, with the rise of job mobility, it made some societal sense as well. With employees hopping from job to job more frequently, the ability of an employer to reap the value-added of training diminished and became more uncertain.
As colleges and universities assumed an ever-growing role in training the white-collar work force, attendance soared. And degrees proliferated and became ever more specialized.
Credentials without college
This was always a highly inefficient way of training and credentialing workers. That’s not the singular focus of higher education. It’s about the pursuit of knowledge and the creation of, in terms of education, well-rounded young adults.
There are those for whom that is attractive and beneficial. But the near-monopoly higher education had on credentialing white-collar workers forced large volumes of young adults just looking to become eligible for a job into a system that didn’t really fit their needs. For them, the credentialing function could be accomplished in less time and at considerably less expense.
Nevertheless, there wasn’t really any pressure to change things. The system largely served the needs of businesses. The colleges and universities clearly weren’t going to complain. And the students who were poorly served by this near-monopoly on credentialing had neither political nor economic clout.
This system, however, is beginning to creak.
For one thing, colleges and universities have become significantly more expensive. The inefficiency of relying on them for credentialing has become much more pronounced.
For another thing, colleges and universities have gone loco.
Here, I want to make a distinction between the hard sciences and the social sciences. In the hard sciences, students still learn real-world, useful stuff. In the social sciences, they are indoctrinated in identity and grievance politics. And identity and grievance politics dominate the governance of our institutions of higher learning, so that not even the hard sciences escape the enervation.
The economy is also changing. The distinction between white-collar and blue-collar work is blurring. There are a lot of intellectual skills and knowledge required these days in a lot of production work. That makes colleges and universities even less suited to play such a dominant role in credentialing workers for jobs.
High tech was the first to accept, on a significant scale, alternatives to a college degree as evidence of being qualified for high-level intellectual work.
Trump tax-cut hiring binge lessons
The extent to which the Trump tax cut has unleashed economic energy is still underappreciated. Cutting the corporate income tax rate from 35 percent to 21 percent leaves businesses with a lot of cash to reinvest. And a lot of that is getting channeled into hiring.
In this hiring binge, companies are relying less on a college degree as evidence of qualification and are more willing to train workers on their own dime, according to the Wall Street Journal article.
Of job postings, only 30 percent listed a college degree as a requirement. That’s a smaller percentage than the percentage of working-age adults with college degrees.
That’s not a sign of job quality deterioration. The requirement to have a college degree isn’t being dropped just for warehouse jobs. It includes programmers, supply-chain technicians and middle managers.
One company shifted four marketing positions requiring MBAs into eight positions not requiring college degrees.
The Trump tax-cut hiring binge will abate. The question is whether the reduction in reliance on a college degree for job credentialing is a temporary phenomenon or the beginning of a broader acceptance of alternatives.
The gravy train for colleges and universities may be slowing down.
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