Education and Employment Qualification Screening

Not all that long ago when you applied for a job at Target or Safeway, you submitted a resume and went through a series of interviews. The purpose, of course, was to determine if you had the intelligence, skills and personal traits that were likely to make you a success in the position. Today, personal interviews are more a last-stage hiring formality. The initial screening is done by machine -- by online inventories and questionnaires.  Employers have proven statistically that this methodology is simply a better predictor than three managers conducting interviews. and much less expensive.

Let's now look at how employers go about hiring for higher skill jobs. Historically the most convenient way to make an initial cut is to screen for a college degree?  Why? 1) Because it was a fairly good way of separating the intelligent and motivated from the rest of the pack and 2) Because there were things you learned in college that were valuable to the employer. I think it's safe to say that the second reason is no longer terribly important for many employers who aren't hiring technical degrees. Half of today's college graduates work at jobs that really don't require a college-level education, and there just aren't that many jobs where a knowledge of gender studies or art history is critical. So for a lot of people we're left with a college degree being a crude way for you to signal to an employer that you're a cut above half the population that doesn't have that degree. 

That degree, that signal, is a very expensive one. Shouldn't there be a more efficient way to identify the types of people and the traits that are success factors for employers? Shouldn't there be some sort of testing mechanism whereby a person could say to an employer, "Look I have a A85 B92 C76 D47 E67 profile. Statistically that means I'm more likely to be a good performer for you than 80% of those people with college degrees who have lower scores on the attributes that are really important to you." 

This would not stop everyone from getting a college education. There will still be lots of people of who will want that experience and that education for personal reasons. There will be a few jobs where a degree in art history or gender studies really is useful. But its utility as a mechanism to signal employers that you probably have some general intelligence and verbal skills could be supplanted by much better and cheaper predictive tools. Then let the universities that want your (or more likely the government's) $100,000 demonstrate that what they teach you in those four years really adds a lot to your market worth. Surely they are up to that challenge, aren't they?

Killing the Job Goose: New Company Formation

Want to understand why job growth is slowing down? Almost all of net new jobs come from businesses that are less than ten years old, but the number of new companies being formed is declining. It is harder to start a new company today. Virtually impossible to take one public with all the new federal regulatory requirements (e.g. Sarbanes-Oxley). You can't even open a lemonade stand legally in under 60 days in most cities.  New businesses are the goose that lays the golden eggs, and we're strangling the goose.

Something to Remember on May Day

May Day was a day for the leftists in the Seattle population (which seems to be the same thing these days)  to get together for riots proclaiming the evils of capitalism -- how badly the people of the world have suffered from the advent and acceleration of market economics. Perhaps they'll want to use this chart as a discussion point the next time they meet.