Intellegence, Hiring and College Debt

An interesting perspective, especially in the light of Caplan's book on the low value of education.

The 1964 Civil Rights Act banned pre-employment tests that were not “a reasonable measure of job performance.”

In 1971, the US Supreme Court decided a case called Griggs vs. Duke Power Co. The subject was employment requirements. Duke had an intelligence test it gave to its job applicants. They were sued on the argument that such tests are racially discriminatory. Duke lost.

The court ruled that Duke’s tests were too broad and not directly related to the jobs performed, which made them illegal.
Furthermore, the court said employers had the burden of proving employment tests were necessary for business purposes and not racially discriminatory. That’s hard to prove, so many US companies stopped using pre-employment tests at all.

Now what do they do? How does Duke test its employees for competence? They turned to college degrees. They decided that it would be a good indicator of intellectual competence and grit.

Fascinatingly, colleges test for admission, something Duke was not allowed to do. Colleges essentially became a proxy--government approved--for testing.

And this created the college gold rush where every potential employee felt he had to take out a loan and go to college--and he did.

For want of a nail....