Employers starting to buck the trend toward valuation of college degrees over technical and on-the-job skills training

Wikipedia’s entry calls it “Credentialism and educational inflation,” and describes it as “any of a number of related processes involving increased demands for formal educational qualifications, and the devaluation of these qualifications. In Western society, China, and India, there has been increasing reliance on formal qualifications or certification for jobs. This process has, in turn, led to credential inflation (also known as credential creep, academic inflation, or degree inflation), the process of inflation of the minimum credentials required for a given job and the simultaneous devaluation of the value of diplomas and degrees. There are some occupations that used to require a high school diploma, such as construction supervisors, loan officers, insurance clerks, and executive assistants, that are increasingly requiring a bachelor’s degree.”

I have one friend who tells me that all the higher-level administrative assistants in the graduate school where she works have master’s degrees. You could peruse job sites and apps and easily find medium-level jobs — non-technical, non-scientific jobs — of all sorts which require a bachelor’s degree (doesn’t matter what your major was) that previously required only related experience and a high-school diploma.

The reasons for this are varied, but one of the big reasons has been HR people — many of them degreed themselves when they need not be — who use the possession of a bachelor’s degree as a stand-in for the ability to work hard and be productive. This is despite all evidence that having a college degree alone does not translate into increased productivity or skill in these types of jobs that do not require any special training beyond the ability to learn quickly, synthesize large amounts of administrative information, be super-organized and get along with people.

The great harm this does to society is obvious because it forces people whose earning power will never exceed a certain level to take-on all manner of debt for a college degree they did not need in order to be proficient at these jobs.

Employers, including some of the largest in America, are starting to scale back degree requirements for jobs for which experience and technical skills learned on-the-job are more important than a degree, as this WSJ article by Austen Hufford explains:

Some occupations have universal degree requirements, such as doctors and engineers, while others typically have no higher education requirements, such as retail workers. There is a middle ground, such as tech positions, that have varying degree requirements depending on the industry, company and strength of the labor market and economy.

Lucy Mathis won a scholarship to attend a women in computer science conference. There, she learned about an IT internship at Google and eventually dropped out of her computer science undergraduate program to work at the company full time. The 28-year-old now makes a six-figure sum as a systems specialist.

“I found out I had a knack for IT,” she said. “I’m not good at academics. It’s not for me.”

More than 100,000 people in the U.S. have completed Google’s online college-alternative program that offers training in fast-growing fields such as digital marketing and project management, the company said. It and 150 other companies are now using the program to hire entry-level workers.

The majority of its U.S. roles at IBM no longer require a four-year degree after the company conducted a review of hiring practices, IBM spokeswoman Ashley Bright said.

Delta eased its educational requirements for pilots at the start of this year, saying a four-year college degree was preferred but no longer required of job applicants.

Walmart Inc., the country’s largest private employer, said it values skills and knowledge gained through work experience and that 75% of its U.S. salaried store management started their careers in hourly jobs.

“We don’t require degrees for most of our jobs in the field and increasingly in the home office as well,” Kathleen McLaughlin, Walmart executive vice president, said at an online event this fall. The company’s goal is to shift the “focus from the way someone got their skills, which is the degree, to what skills do they have.”

This is a very good thing to be happening.

Many of the country’s largest employers are starting to scale back the number of jobs for which they require a college degree, choosing instead to value specific job skills training over broad-based degrees from 4-year institutions.

Age discrimination is rampant, mostly unchecked

Interesting — and disheartening — research out of the National Bureau of Economic Research.

It shows that, among other things, if you move to blinded job interviews and callbacks (where the interviewer cannot ascertain the age of the job applicant, job bias against older people, the older applicants are treated better:

There is other evidence of age discrimination in hiring from nonexperimental approaches. In data from a single company hiring across multiple stores, a change in hiring procedure from in-person interviews to age-blind online assessments was rolled out over time. The in-person interviews, in which the interviewer could assess age immediately, led to lower hiring of older applicants. Older applicants fared better in the age-blind online assessments, getting more interviews — likely because of more work experience — but adverse treatment of older applicants emerged after the interviews, when age became apparent.

Not a shock, obviously. But it does point to the reasons I know several poeple in my circle alone who are over 60 and cannot find a job outside the most menial positions. These are highly qualified, higher-level intelligence individuals who are still just as sharp as ever.

FAA rejects airline’s bid to cut pilot training hours in half

A major regional airline’s push to have less training for pilots is rejected by the FAA.

Aviation-safety regulators rejected a proposal by a regional airline seeking to reduce the number of hours that some co-pilots need to begin flying passengers.

Indianapolis-based Republic Airways Holdings Inc. had asked the Federal Aviation Administration to allow pilots who go through a special program at the airline’s training academy to begin flying on a restricted license after 750 hours of training—half what is generally required.

The request came as regional airlines such as Republic say they are facing a shortage of pilots that has strained their ability to fly to small cities around the country. Republic operates flights for United Airlines Holdings Inc., American Airlines Group Inc. and Delta Air Lines Inc.

The FAA said in a letter to Republic on Monday that it didn’t agree that Republic’s plan served the public interest and doesn’t believe the airline’s plan would help address a “perceived pilot shortage.” The agency said granting an exemption to Republic could open the door to similar requests from other airlines.

The decision underscores the dilemma facing regional airlines, which are generally smaller carriers that play an outsize role in U.S. air travel, operating over 40% of U.S. passenger flights.

Republic’s request reignited an industry debate about a federal rule that requires aspiring U.S. airline pilots to have at least 1,500 hours of flying experience to qualify to be a first officer at an airline, unless they are former military pilots or graduates of colleges and universities with professional aviation programs.

That requirement, dubbed the 1,500-hour rule, was put in place in 2013 after a fatal plane crash in 2009 near Buffalo, N.Y., which investigators blamed on a tired crew that didn’t properly react to stall warnings. The Air Line Pilots Association (APLA), a pilots union, opposed Republic’s request and disputes that there is a pilots shortage.

If I believed anyone, I’d believe the APLA. And I’ll be avoiding any flights on Republic henceforth. If they’re trying to jeopardize passenger and pilot safety just to increase their bottom line by hiring less-experienced pilots, who knows what other ways they are cutting corners?

Greed and inefficiency, not higher wages, are the main drivers of inflation

The good people over at the Center for American Progress (CAP) are calling bullshit on the Wall Street-inspired myth that high worker wages are the main cause of inflation, and that the only way to tame inflation is through Fed rate hikes and higher unemployment.

Historically, countering inflation has been left to the remit of the interest rate policy of the Federal Reserve. In recent months, the Federal Reserve has been sharply increasing interest rates in an attempt to reduce demand, slow the economy, increase unemployment, and lower inflation. This risks sending the country into a recession. While low-income households often feel inflation the hardest, a Federal Reserve-induced recession would be far worse, as millions of the most economically vulnerable Americans could lose their incomes entirely.

Alternative methods exist to fight inflation and reduce the costs of essentials over the longer term that would not adversely affect low- and middle-income households. Congress and the Biden administration have pursued some of these alternatives, including through the newly passed Inflation Reduction Act. These measures reduce inflationary pressures by investing in domestic production, boosting the United States’ productive capacity, tackling long-standing issues of corporate concentration, and more. These efforts have been underway for some time now and have already helped ease inflationary pressures. They should also help the economy better absorb some future demand and supply shocks so that it is more robust overall.

CAP points out an economic question that much of the mainstream press seems unable to understand clearly: if worker wages are at the heart of corporate America’s inflation-causing price increases, why are corporate profits at an all-time high?

From 1979 to 2019, inflation-adjusted wages for the bottom 10 percent of households rose by just 6.5 percent; the median household saw growth of just 8.8 percent over those 40 years, while the 90th percentile of earners saw a whopping 41.3 percent growth.

Meanwhile, data from the AFL-CIO show that profits of S&P 500 companies rose by 17.6 percent in 2021—and the earnings of their CEOs grew by 18.2 percent. That’s more than twice as fast as inflation that year and almost four times as fast as nominal wage growth for regular workers. There is no evidence that typical worker wages are eating into profits either, as profit margins reached 15.5 percent in the second quarter of 2022 for nonfinancial companies, the highest they have been since 1950. (see Figure 2)

Companies could be using their profits to expand their productive capacity for the future and ease the supply constraints that have contributed significantly to inflation. They could also be using their profits to reinvest in their workforces by paying workers better. As Walmart and many other brands have recently discovered, even slightly higher wages result in lower worker turnover and higher productivity, which ultimately boost overall economic growth. Instead, however, many corporate executives have chosen to enrich themselves.

Some business executives have admitted on shareholder calls and in surveys that they have been taking advantage of inflation to boost profits by increasing prices beyond what is needed to offset any increase in their input costs.

You can read the rest at this link.

Will Calif. Gov. Newsom sign bill raising minimum wage for fast-food workers?

I have known personally three people in my life who were fast-food franchise owners. (This was long before the pandemic-related wage pressures that caused many fast-food restaurants to nominally raise wages.)

The owners were all rich. Not “I own my own jet” rich. But “ginormous house with a pool and several expensive foreign cars” rich. “Extra house just for vacations” rich. “Send their kids of to pricey private schools” rich.

I knew none of them well enough to say to them at a party, “Don’t you feel guilty living the way you do and paying your employees so poorly that the rest of us — the taxpayers — have to pick up the slack by providing public assistance to them? Guilty that some of your people are paid so poorly that, even with just one kid, they qualify for government assistance, while you have a four-car garage and a pool? You couldn’t spare just a few more dollars per hour for not that many people on your staff?”

It would have been a rhetorical question, of course. None of them would have felt guilty because that’s just who they were.

Related to that, the California Legislature passed a bill that would, among other things, raise the minimum wage for many fast-food workers to $22 an hour starting next year.

The Wall Street Journal reports of the massive mobilization effort to get Gov. Gavin Newsom to veto the bill, even after the governor and his underlings have already significantly watered it down.

Restaurant operators and business advocates mobilized Tuesday to try to persuade California Gov. Gavin Newsom to veto a bill that would set wages for fast-food workers, a move they said could increase costs and set a precedent other states and cities might follow.

The effort is being pushed by franchise owners, including many who would have to take on the cost of paying workers a minimum wage as high as $22 an hour starting next year, set by a government-run council created by the bill. Chains that operate their own restaurants, such as Starbucks Corp., Chipotle Mexican Grill Inc. and In-N-Out Burger, would also be affected.

Groups representing restaurant companies and owners said they plan to launch an advertising campaign and deploy franchisees and business leaders to attempt to persuade Mr. Newsom, a Democrat, to veto the bill, which they say is the latest evidence of California making it difficult for businesses to thrive.

“Every resource at our disposal will be used to ensure our entire membership is asking the governor to veto this bill,” said Jot Condie, president of the California Restaurant Association. He said he fears the wage-setting council’s authority could later be expanded beyond the fast-food industry.

The bill, known as the Fast Act, passed California’s Legislature on Monday. It was backed by labor unions, which say a government council setting minimum wages for fast-food workers could create a model to ensure fair wages and other protections for hourly workers in an industry where unions have struggled to organize workers. this to other states,” said Mary Kay Henry, international president of the Service Employees International Union.

Fast-food franchisees have to be complete idiots not to be made fabulously rich by owning these restaurants. They can afford to pay higher wages and still make tons of money.

Aside from that, the costs to society of these restaurants is huge. There are the aforementioned facts about how much society picks up the financial slack — just as it does with Walmart, Target, etc. — when these fast-food employers pay so far below a living wage with few, if any , benefits. But there are also the health care costs of having these awful (delicious, but awful) restaurants everywhere, beckoning passesrsby to eat convenient, grossly unhealthy meals, the low price of which is subsidized by taxpayers everywhere — including the health care costs of treating all that diabetes and cardio-vascular disease.

So what if fast-food owners have to raise prices? That might mean fewer restaurants in the long-term which, overall, would not be a bad thing. But I suspect that even if every hamburger in California fast food had to be raised by a dollar to keep franchisees and their corporate overlords swimming in money, people would flock to the places because they’d still be cheap and fast and easy.

If you’re over a certain age, $22 an hour seems like a lot. But it’s really not, in today’s dollars. It’s a subsistence wage by today’s standards. Remember also that if the minimum wage had kept up with worker productivity, it would be $26 per hour.

You can read the rest of the WSJ article here.

Walmart, national employment firms, milk job placement program for billions while giving crappy temp jobs to clients of the program

I had never heard of the Work Opportunity Tax Credit (WOTC) until I read the article mentioned.

WOTC was meant to help low-income communities and hard-to-place workers find jobs, with subsidies to employers who gave these potential employees a chance in entry-level positions, helping get people into permanent employment.

But, of course, that’s not how Wall Street has done it, because Wall Street is a giant blood-sucking money funnel that will find any way to cheat that it can.’

Instead of helping down-and-out Americans, huge corporations like Walmart, along with massive employment agencies like Kelly and others, have used the money to subsidize shitty dead-end temp jobs that they would have had to fill anyway, but now they can fill those jobs AND get paid money on the side for doing it.

When Congress passed the [WOTC] to encourage businesses to hire and retain marginalized workers, lawmakers made it clear that the credit should be used for permanent employment — not dead-end temp [jobs].

Instead, the $2 billion program is now handing out hundreds of millions of dollars a year in subsidies for the very jobs lawmakers wanted to avoid rewarding. ProPublica analyzed data from nine states’ WOTC applications and found that nearly a quarter of the jobs certified for the tax credit between 2018 and 2020 were with temp agencies. The numbers become even more striking when the analysis is limited to one eligible group — workers with felony records. Thirteen of the top 14 employers certified to get credits for those workers were temp agencies.

In addition, some of the credit’s biggest beneficiaries are temp agencies with long records of labor violations.

Express did not respond to multiple calls and emails. Tennant, which benefited from Bush’s work but wasn’t eligible for the credit because it wasn’t his direct employer, declined to comment.

Coming out of the welfare reform movement of the mid-1990s, the WOTC aimed to give groups like food stamp recipients, residents of high-poverty areas and formerly incarcerated people access to long-term employment. In exchange, companies could write off thousands of dollars from their taxes for each worker they hired.

But the program’s rules didn’t match that intent. To receive the minimum tax credit — worth 25% of a worker’s wages — a company need only employ a worker for 120 hours, or about three weeks of full-time work. Employers can get the maximum credit — 40% of a worker’s wage, up to $2,400 — after just 10 weeks. The criteria say nothing about type of employer or the quality of the job and don’t forbid companies with a history of workplace violations from participating.

In the absence of tighter rules, the WOTC has become a financial boon for large low-wage employers with high turnover, including Walmart, Dollar General and Amazon. Those three companies are the top recipients of the tax credit in ProPublica’s analysis.

Walmart and Dollar General did not respond to requests for comment. Amazon spokesperson Barbara Agrait said, “Like many other companies, we utilize the Work Opportunity Tax Credit and we believe it helps to break down barriers some may face when seeking employment and encourages a strong and diverse workforce.”

But few industries have benefited as much as temp agencies.

Corporate filings by publicly traded temp agencies reveal how big a windfall the tax credit has been. One company, Kelly Services, reported receiving tax credits, “primarily” WOTC, worth $164 million over 10 years, or 48% of its U.S. pre-tax earnings. TrueBlue, which owns the day-labor firm PeopleReady, reported receiving tax credits — also described as “primarily” WOTC — worth $114 million over the past 10 years, or 29% of its pre-tax income. The credits reduced TrueBlue’s federal income taxes by 69% and Kelly Services’ by 73%.

“Everybody’s winning except the formerly incarcerated person,” said Andrea C. James, executive director of the National Council for Incarcerated and Formerly Incarcerated Women and Girls.

A few years ago when I was in-between jobs I registered with some temp agencies. Even got a temp job through one, but it was a local agency and not one of the national ones.

To this day I still get emails from the temp agencies and I am amazed at how shitty their job matches are — when I specifically asked to only be notified about jobs in one particular field.

They love to send me nursing jobs. Nothing in my background, work experience or job-match preferences would even hint that I want a nursing job.

I concluded that the national job search agencies are kind of scammy.

This only proves it.

You can read the rest of Emily Corwin’s ProPublica article at this link.

When returning to the office also means dealing with co-workers’ annoying habits

Sarah Needleman’s newly posted article up at the Wall Street Journal is a reminder that returning to office work means returning to life around co-workers who smack their lips when they eat and hum loudly at their desk.

It didn’t take long for Gary Bush to become reacquainted with the harsh realities of office life after two years of working out of his home in Fort Wayne, Ind.

Within a matter of days, the sales manager for an auto dealership found himself having to break up a spat between two employees over a large container of apple juice. One said she brought it in and left it in the office refrigerator to drink later that day. The other conceded to consuming most of it, but argued that he wasn’t at fault because it wasn’t labeled as hers.

“Any little thing that happens they come to me,” said Mr. Bush, 36 years old. “It’s like I’m a babysitter.”

When Andrew Hashem resumed working in an office for a Chicago-area software company, he figured that stepping into a glass office and closing the door to make a phone call would be enough to discourage colleagues from interrupting him. “They would knock, I’d point to my headset and they would still come in,” he said.

A new makeshift bar set up near Mr. Hashem’s desk for Wednesday afternoon social gatherings added to his discomfort. The fun would often start while he was still on the clock, but many of his peers weren’t.

“I could hear them having loud conversations and playing music,” said the 35-year-old, who recently changed to a fully remote job with a healthcare company. “It made it really hard to concentrate.”

Throughout the COVID pandemic I have worked full-time and not worked from home once.

I am definitely a person who is more productive around other people.

But if you’re more productive without Bob from accounting stopping by your desk to regale you with stories about his fascination with whiskey and cigars, I feel for you.

You can read the rest of the article here.

Would you move to rural Iowa if a company had really nice amenities?

That’s a gamble that Pella, the $2 billion-a-year window and door maker, is making as it upgrades its facilities — including a child care center — to match what it thinks today’s job seekers really want.

Pella says it will take time to increase its local workforce. Currently, about 2,550 people work for the company in the town, but only about 640 live there. The others live and commute in from neighboring Iowa communities.

“We can make an investment now knowing that the payback may not be next quarter and maybe in a few years,” says Mr. Yaggi, whose company employs roughly 10,000 workers across 14 states.

Pella executives say the company tried more traditional solutions to boost its ranks. It raised pay, automated some tasks in factory work to widen the appeal, and doubled down on recruiting from the local high school and college—but with limited success. Tapping a larger labor pool isn’t easy. Some candidates relocating may fret about adjusting to life in an overwhelmingly white town with more than two dozen churches and two bars, they say.

“We can bring in all the amazing talent from across the country, but if they get here, and they don’t see themselves reflected in the community, they don’t feel at home,” says Nicolle Picray, a company spokeswoman.

Absent interventions from Pella, Andrew Kreifels says he wouldn’t have joined the company. Mr. Kreifels moved here with his wife and two children from suburban Detroit earlier this year to run Pella’s strategy and business development team.

After rounds of interviews, problems kept surfacing. He couldn’t secure spots in local child-care centers, ending up on wait lists instead. Options for local housing were limited, he says, and the idea of at least a 45-minute commute to the office from Des Moines wasn’t appealing.

“If you’ve got a dual-career household, of your top 10 priorities, the first five are child care,” says Mr. Kreifels. “I vividly remember saying to my now-manager, ‘It’s just too much, I don’t think we can do it.’”

The 10,000-person town is only 44 miles from Des Moines (282 miles, Minneapolis; 315 miles, Chicago) so it’s not the middle of nowhere, depending on how you define middle of nowhere.

You can read the rest of Charity L. Scott’s Wall Street Journal article at this link.

Molengracht Canal, Downtown Pella.

Uber to give more control to drivers over which riders they choose to accept

At one point between jobs I was a rideshare driver full-time. Uber and Lyft.

Once I figured out what I was spending on gas and and unpaid waiting/travel time, combined with upkeep and repairs on any car that gets driven that much, I realized I was making less than minimum wage.

Add to that the daily aggravations of riders who summon you for 6-block jobs where they tip nothing, or drunks who try to eat messy food on your leather seats, or rude passengers with screaming kids.

Well, it was all too much and this was before COVID and sky-high gas prices.

Before I mention the article I’m highlighting here, let’s take a look at Uber’s stock price over the last year. (See below.)

Not good.

Anyone who’s paid attention could tell you that Uber’s business model was unsustainable. It’s formerly explosive growth was dependent on investors willing to throw money at the unprofitable company, combined with a need for a steady turnover of drivers who stay just long enough to realize that driving for Uber is a losing proposition over the long term.

Now, investors are drying up and drivers are getting harder to come by.

So Uber is making a huge change:

Uber announced a series of new features Friday aimed at enhancing driver experiences on the ridesharing app as drivers continue to contend with high gas prices and inflation rates.

Drivers across the U.S. will be able to see exactly how much they’ll earn and where they’re going before they accept a trip. They’ll also be able to see more than one trip request at a time by using a new feature called Trip Radar. Uber said those changes will also help lower wait times for riders.

The company also announced the Uber Pro debit card and checking account, which offer drivers up to 7% cash back on gas at select stations. Drivers’ earnings will be deposited directly into the account.

The updates and debit card are rolling out over the coming months.

It’s the latest move by Uber to try to support drivers. The company added a surcharge on fares and deliveries in March in an effort to help offset rising fuel prices. The new options may help the company keep existing drivers and attract new ones.

One of the things that most pissed me off as a driver was if I turned down a rider who was too far away to make the trip profitable, it counted against me in terms of my overall ratings and the benefits I could access on the Uber app.

So this will be a welcome change, I am sure.

I still doubt it will make driving worthwhile because the economics just aren’t there to offer cheap rides and still compensate drivers as they should be compensated.

Actually, Uber and Lyft rides aren’t all that cheap any more, either.

You can read the rest of the article here.