Australian government and industry should readjust their job qualification to meritorious appointments to ease record unemployment
from the White House
On Friday, President Trump signed an executive order directing federal agencies to fill job vacancies based on merit, rather than require a minimum level of education for candidates seeking open positions. The order rightly recognizes that a job candidate with several years of relevant experience may be just as qualified, if not more so, than one who has collected a stack of advanced degrees.
“Employers adopting skills- and competency-based hiring recognize that an overreliance on college degrees excludes capable candidates and undermines labor-market efficiencies,” the order reads. “Currently, for most Federal jobs, traditional education — high school, college, or graduate-level — rather than experiential learning is either an absolute requirement or the only path to consideration for candidates without many years of experience.”
The order still allows federal agencies to prescribe minimum educational requirements for job candidates if the degree is legally required by the state or local government where the federal employee will be working. Additionally, they may consider a candidate’s education if the degree “directly reflects the competencies necessary” to do the job.
In other cases, agencies must fill job openings based on the “specific skills and competencies” that the positions require. An agency seeking a computer programmer will not be allowed to turn away a candidate with several years of relevant programming experience simply because he hasn’t had the time or money to go back to school for a master’s degree.
Instead, federal agencies will develop assessment practices to determine a candidate’s skills and qualifications for the job. These may take the form of formal skills tests or some other means of assessment, but cannot rely only on job candidates’ self-evaluations of their skills. Changes to job classification and qualification standards will take effect within 180 days.
The administration’s move strikes a blow against credential inflation, the phenomenon of increasing education requirements for job openings even though the skills required to do those jobs have not meaningfully changed. A 2017 Harvard Business School report found that postings for dozens of common jobs now typically request bachelor’s degrees, even though a majority of people currently working in those jobs do not have a college education. Examples of jobs that have suffered from credential inflation include lower-level managers, secretaries and administrative assistants, and child care workers.
Credential inflation shuts out experienced, qualified job candidates who are perfectly capable of filling certain roles simply because they lack the right piece of paper. It also deprives employers of a pool of talent. Most perniciously, it convinces young jobseekers that they need a bachelor’s degree or even a graduate degree to succeed in the labor market, forcing them to spend tens of thousands of dollars and years of their lives pursuing unnecessary credentials.
The federal government has been among the worst drivers of credential inflation. Nearly 30% of federal workers now have a master’s degree, up from just 15% a quarter century ago. Though degree requirements for private sector jobs have also increased, credential inflation in the federal civil service has been especially pronounced. As the nation’s largest single employer, it’s fitting for the federal government to lead the way in questioning whether such intensive education requirements are necessary.
People with lower levels of education have been hit hardest by the current recession. Unemployment rates for those without college degrees have soared into the double digits. Historically, credential inflation has accelerated during recessions as employers take advantage of the weak labor market to ratchet up degree requirements on open job postings. This makes it even harder for people without college degrees to find well-paying jobs.
It doesn’t have to be that way again. Governments and private employers alike should recognize that unnecessary degree requirements are not just unfair to qualified workers without sheepskins, but also a self-inflicted handicap on their own ability to find great employees in the broadest talent pool possible. The administration’s executive order is an important first step toward reversing credential inflation in the federal civil service and in the broader labor market. Hopefully other employers will follow.
Queenslanders living in an economic backwater
19 January 2016: Federal Member for Kennedy Bob Katter has written to the Prime Minister today urging him to intervene in the situation concerning Queensland Nickel, owned by a Clive Palmer company and provide bridging finance to the company until the market recovers.
The company employs nearly 1,000 direct jobs and according to Mr Katter is now in grave jeopardy unless the Government intervenes.
Mr Katter said in his letter to the Prime Minister that the industry was going through the standard ‘boom and bust’ cycle.
“For the past fifteen years the price of nickel has averaged $25,000 per year, it is now $8,000 per year.
“China is suffering a normal ‘boom and bust’ cycle; minerals live with a ‘boom and bust cycle’.
“Nickel is used in the production of stainless steel and in turn these alloys are used in the production of many electronics, power tools, transport and emergency power supplies.
“Nickel is of immense commercial value. Its long term outlook is solid.
“World bank projections are for $20,000 per tonne within the next few years,” Mr Katter said.
Clive Palmer says the placing of Queensland Nickel into receivership has “nothing to do with me.”
Mr Katter said that in the 1980s the Queensland Government had no hesitation in providing a loan guarantee for $40 m (the equivalent of nearly $100 m now) to get Queensland Nickel running.
“The tax revenue from an operation bringing, we are informed $800 m per year, generates a tax revenue of at least $200 m.
“The loss of one of the bigger nickel refining plants in the world would be yet another blow to the North Queensland and Australian economy.
“Last year we saw the closure of Australia’s last motor vehicle plant and white goods plant.
“There is not the slightest doubt that the Australian people believe that they are, or will very soon be, living in an economic backwater.
“We urge immediate Government action to assist this situation, put in place strict guidelines, and provide bridging finance until the market recovers,” Mr Katter said.
6 October 2015:
Federal Member for Kennedy Bob Katter today called the signing of the Trans Pacific Partnership Agreement (TPP) the greatest blow to democracy in 300 years, saying that it amounted to nothing more than a new form of Corporate Colonialism.
“This agreement is not about trade, it’s about sovereignty,” Mr Katter said.
“Governments will now be stripped of their power to regulate the behavior of overseas companies.
“Companies will be able to come here under certain terms and conditions and no Government will be able to change those without fairly horrific consequences, if at all.
“It takes away our sovereignty and hands it over to the giant foreign owned corporations.”
Mr Katter expressed concern over the foreign workers who would be let into the country under the TPP agreement.
“Foreign workers will pour in and they are already at high levels, there are 600,000 foreign workers a year coming into an economy creating only 200,000 jobs a year.
“They are taking our jobs and undermining our pay and conditions, and there’s nothing we can do about it.
“Once in place, withdrawing from the TPP will ensure the wrath of countries infinitely more powerful than our own.
“The Americans have imposed this regime upon South and Central America, reducing them to some of the lowest living standards in the world.”
Mr Katter said that he was deeply disappointed with Prime Minister Turnbull, this being his first major initiative since taking the office.
“Mr Turnbull’s background is very much associated with a merchant banking company who’s preeminence in both the Bush and Obama administrations is a matter of public record.
“These are people who make money out of money; they do not make money out of producing goods and services.
“I absolutely believe we are now retreating back to the days of colonialism, the only difference being that it is Corporate Colonialism and not Imperial Colonialism.
“We will be fighting the TPP and have forwarded a letter today to all Senators pleading with them not to turn the control of their country into the hands of foreign corporations.
“We will be moving for the Treaty’s disallowance as soon as Parliament resumes,” Mr Katter said.