Dismissed by degrees: how degree inflation is undermining US competitiveness and hurting America's middle class

Degree inflation - the rising demand for a four-year college degree for jobs that previously did not require one - is a substantive and widespread phenomenon that is making the U.S. labor market more inefficient. Postings for many jobs traditionally viewed as middle-skills jobs (those that require employees with more than a high school diploma but less than a college degree) in the United States now stipulate a college degree as a minimum education requirement, while only a third of the adult population possesses this credential. This phenomenon hampers companies from finding the talent they need to grow and prosper and hinders Americans from accessing jobs that provide the basis for a decent standard of living. In an analysis of more than 26 million job postings, we found that the degree gap (the discrepancy between the demand for a college degree in job postings and the employees who are currently in that job who have a college degree) is significant. Degree inflation particularly hurts populations with college graduation rates lower than the national average, such as Blacks and Hispanics, age 25 years and older. In addition, degree inflation raises the barriers to entry for Opportunity Youth, the nearly six million young adults who are currently not in school or in jobs. Companies that insist only on a college degree deny themselves the untapped potential of eager to work young adults as well as experienced, older workers as pools of affordable talent.

Key recommendations include: Companies can create a competitive advantage by investing in talent management pipelines that match jobs to workers with the right competencies and experience; When faced with a critical middle-skills gap, CEOs can encourage solutions that explore tapping into local and non-traditional talent pools, rather than investing in labor-displacing capital equipment or in incurring the high indirect costs associated with outsourcing or offshoring business activities; In critical hard-to-fill jobs, CEOs can reverse degree inflation by asking the organization to be more deliberate in its hiring practices for middle-skills jobs; Instead of relying on a college degree to access hard and soft skills, companies can widen their search to include non-graduates with relevant work experience or consider partnering with local community-based organizations to tap populations like Opportunity Youth; By revisiting specifications for critical middle-skills jobs and identifying the key competencies required to do the job, companies can match them to specific associate's degrees, certificates, or internal training programs that create career pathways for non-degree holders; A strong case for investing in such an effort can be made when companies measure the all-in economics of degree inflation; and Companies, educators and policymakers need to work together to bring about a systemic shift in the way middle-skills workers are being prepared to enter the workforce.

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