Credentialism is bad for both workers and business

A rosé cider and hard kombucha are on the menu at the Dacha Beer Garden, but only those with a bachelor’s degree, superb English speaking skills, and experience as wine or spirit connoisseurs can serve you. That is according to a recent job posting by the Northwest DC-based restaurant.

As the sector employing the largest number of Americans, the service industry has long been one available to all those who had the customer service skills and willingness to work long, exhausting hours. With degree inflation in recent decades has come the raise of education requirements for many jobs, often unnecessarily. Research from Harvard Business School has shown that even though only 16 percent of current production supervisors had college degrees, 67 percent of new supervisor openings required a college degree. Case in point — it’s unclear as to why a server position at a beer garden would strictly require a bachelor’s degree.

Via Twenty20

Putting this requirement in place, even if not explicitly motivated by ill will, would constitute a significant barrier to many potential hires and may even amount to race and/or class discrimination. The demographic groups theoretically eliminated by these requirements include young, non-college educated African Americans in the area, low-income workers, and immigrants or even bilingual Americans without “superb English-language communication skills.”

People who belong
to populations that statistically have lower rates of college attendance should
not be prevented from competing from these jobs simply as punishment for their
background. People who are entirely capable of working at a beer garden and
conversing in English should not be prevented from doing so because their
language skills are not on par with native-born Americans.

Not only could these prerequisites easily amount to racial and class discrimination, it’s bad for business. By making these credentials necessary for getting hired, jobs become harder for employers to fill, and the turnover rate rises. This is because college graduates are more likely to leave for other opportunities with higher pay or career opportunities more aligned with their interests. The indirect cost to the employer grows, as time and money are wasted looking for and training hirees, only for them to leave after a short period of time. Furthermore, credentialism often leads to an inefficient use of skills for non-credentialed workers. An NBER paper found that 16 million out of 71 million working high school graduates had the skills and capacity to enter high-wage work, but 66 percent of them were instead engaged in low- or middle-wage work. A significant obstacle barring these people from accessing that work is the credential requirement; the productivity of these workers could grow significantly if they could bypass this obstacle.

After some public shaming, Dacha changed their job requirements to eliminate the need for a bachelor’s degree and superb English skills, and they will be better off for it. Even employers like Google and Apple have ditched their degree requirements, recognizing skills as the best predictor of ability and performance. Other employers in service or other industries would be wise to follow suit.