North Carolina reaches for the STARS

On March 13, 2023, Gov. Roy Cooper issued an executive order that removed college-degree requirements from most jobs in state government.

“You don’t necessarily need to have a degree to be great at your job and North Carolina is in need of talented people who can get things done,” Cooper explained. “This order makes it clear that we recognize the value of work experience and don’t want the lack of higher education to be a barrier to starting or advancing in a state career.”

North Carolina’s action was hardly unique. Other employers have also excised degree requirements from jobs that never truly required college-level training to perform. Twenty-five states have done so in the past two years, by either legislation or executive order. There’s even a trendy term for the phenomenon, STARs, an acronym for workers “skilled by alternative routes.”

Welcoming STARs into state jobs isn’t about denigrating the value of a college education. There are certainly professions for which undergraduate or graduate training is and ought to be a prerequisite. For many others, however, insisting that new entrants have college degrees was never about ensuring a proper fit between position and worker.

In some cases, unions or other organizations representing existing workers pressured governments or private employers to institute degree requirements as a means of reducing competition for jobs and, thus, protecting their interests. For other professions, employers instituted college-degree requirements as an imperfect substitute for testing and other objective evaluations of job applicants that federal courts struck down for having a “disparate impact” — most famously in the 1971 case Griggs v. Duke Power, involving hiring practices at a facility in Draper, North Carolina.

I agree with legal scholars who think the US Supreme Court erred.

“If Griggs was right,” wrote Gale Heriot, a law professor at the University of San Diego and member of the US Commission on Civil Rights, then federal law “has taken conduct that is considered odious by nearly all Americans and has defined that conduct to include things so far beyond its core case that essentially any pattern of activity in which an employer might engage as an employer is covered.”

On its own terms, Griggs shouldn’t have kept employers from using tests, surveys, or demonstrations to assess directly the ability of applicants to do good work. In practice, though, companies concluded the risks were too great. Requiring a college degree was easier to administer and seemed like a safer harbor against litigation.

For those lacking either the interest or self-discipline to obtain a college degree, the resulting “credential inflation” became a significant barrier to professional advancement and higher incomes. North Carolina and other states are right to deflate it. But how big a difference will such reforms make now?

A study just released by the National Bureau of Economic Research sought to answer this question. The authors found that actions such as Gov. Cooper’s executive order have, indeed, increased awareness of the existence of the “paper ceiling” in employment while markedly reducing credential inflation. They calculated a 2.5 percentage-point drop in degree requirements for every year the new policies were in place.

In nine of the 10 occupations most opened up to worker STARs by the reform — including operations managers, software developers, and marketing managers — salaries exceed the national median wage.

As for state government, ending credential inflation will reduce vacancy rates. Harvard Business School professor Joseph Fuller explained the problem well. “It is increasingly difficult for state governments to attract certain kinds of talent,” he told Carolina Journal. “Especially those where salary and benefits are, or are perceived, not to compete with the private sector. There are 35 million Americans with some college but no degree. These are not high schoolers; these are people with 25 years of experience, like coders or programmers who don’t have degrees.”

So, by deflating the credentialism bubble, we’ll help workers enter new occupations while also improving public services. Sounds like a win-win.

John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history.