The Negative Impacts of Credential Inflation
The Negative Impacts of Credential Inflation A market that is flooded with credential laden workers vying for a small number of jobs could tip the economy into a recession (Collins, 2002). This idea put forth by Collins seems prophetic when the current state of the economy is taken into account, and brings to light an underlying additional cause of the slow recovery being witnessed in the job market, credential inflation.
This is the process by which educational or academic credentials lose value over time, partnered with lowered expectations of holding a degree in the job market. Credential inflation is increasing rapidly, causing larger debt among the workforce due to over-schooling, leaving college educated individuals with fewer jobs upon graduation, and resulting in employers requiring degrees for jobs where they were once not needed.
This weakening of the belief in credentials has been a persistent trend in the last century in higher education, and has come to the forefront in recent decades due to technical job refinement, making its mark upon the job market as well. As students take on higher amounts of student loan debt because of the perceived advantages a degree warrants, the economic burden upon younger generations increases. Even with degrees in hand, students after graduation are continuing to find less well paying jobs that require a bachelors degree.
More and more individuals are faced with the choice to gain additional education and incur more debt, or settle for a lower paying job and remain in student loan debt longer. Employers that at one time required high school diplomas now only hire individuals with bachelor’s or even graduate degrees. If this is the direction America’s economic and educational culture is heading without pause and reflections of outcome, than a resulting catastrophe is not just chance, but a real probability.
The growth in credential inflation over the last twenty years, has accelerated, and when a moment is reached where higher education is commonplace, it becomes a vicious contest to receive the most amount of credentialing possible If a degree is seen as influential, and is depended upon to get the same jobs as previous non-degree holders, it follows that more education and a degree would benefit the individual in the future. Many studies show this ever increasing trend of the acquisition of higher education. In an analysis by The National Center for Educational Statistics (“Fast Facts,” 2011) on enrollment numbers in secondary education, ”… he percentage increase in the number of students age 25 and over has been larger than the percentage increase in the number of younger students, and this pattern is expected to continue. ” The students in the 25 and over group between 2000 and 2009 saw an increase of 43 percent and in the next nine years can expect another 23 percent increase in college enrollment. This prevailing situation is compounded by the fact the more of the total population are seeking degrees, and that job creation has stagnated (NECS, “Fast Facts,” 2011).
With an ever increasing number of degree holders entering the workforce with higher credentials, the number of actual jobs available to a credentialed workers declines. The prevailing thought is that an increase in education coupled with higher job entry requirements is necessary, because of heightened job complexity. Contrary to this is that, there is no evidence that the more educated the worker is, the more competent they will be (Collins, 1979). Brown’s argument is that students may simply be getting degrees to increase their chances of landing a job, rather than gaining the expertise, through a degree program, to do the job (2004).
The evidence for this rears its ugly head, when degrees are fabricated by individuals to simply gain entrance into a job; a job they would not get without the proper credentials. Experts agree that credential inflation will continue, and the trend that started in the early Eighties and has increased ever since, is now the prevailing norm. Collins, states in his “Credentials Inflation and the Future of Universities”, that it could continue to increase, and in the future we will have a socialized system supporting education(2002).
The expansion of credential inflation as an enduring trend cannot be denied, and the impacts upon the people and institutions influenced are threefold. The debt incurred by students upon graduation, is greater now then ever before. With increasing costs of higher education, compiled with the necessity of a degree to enter the workforce, recent students upon graduation are heavily laden with student load debt that vastly outweighs the debts incurred by the generations that preceded them.
This debt, for the student, can be crippling personally, but is also a burden for the country. Collins (2002) writes that economic hardship because of the system, and its negative feedback loop, have become very expensive, both for the individual and for the nation. With student loan debt estimated at over a trillion dollars in the United States, it has surpassed even credit card debt. The average student leaving college after graduation possesses $25,000 in debt, and their parents an average of $34,000, with parental loaning up 75 percent since 2006 ( “Fast Facts,” 2011).
Also reported is an 81 percent jump in people looking for student loan debt relief, for which there is little help. Devoting too much money and time to further education, seems to be digging a hole that people cannot pull themselves out of financially, and the resulting credentials one gains, are no longer the sure fire way to a successful career. A degree is not the guarantee of economic security it once was, and the amount in salaries among those with a higher level of education is less proportionate than those without, now more than in the past.
This prevailing notion that an individuals success in their careers over the coarse of their lives hinge upon the certificates of school achievement, is part of what drives the whole process of credential inflation. A statistic on the rate of return of a degree holder over their life is of little consequence to those graduates who can’t find a job now. Put simply, if education is worth less, people are less likely to invest in it (Van de Werfhorst, Andersen, 2005), but the counter is also true. When education is seen as being worth more, people are more likely to invest in it.
Whether or not this “being worth more” is true, the perception that one will indeed garner a higher wage as an outcome, is the prevailing notion at the present, and continues to drive up enrollment in secondary education. If achievement in finding a job and ultimate financial success revolves around education, and the cost increase becomes unbearable for the non-affluent, only the rich will have the availability to outpace credential inflation. As students in secondary education graduate from college at a faster and aster rate, they continue to find an ever decreasing amount of jobs available to them after graduation. The high school diploma, which once carried with it the credentials to secure a decent paying job, now has become a stepping stone to getting into college, and itself not used as a credential for jobs at all. Indeed, only 10 percent of the population in the United States does not carry a high school diploma. A market saturated with a certain credential sees that credential as a necessary step, but ultimately worthless.
Is this the road a college degree is headed down, a worthless piece of paper that has strapped the holder with a debt they cannot pay back? As more people earn more degrees or educational levels increase, the inherent properties of that degree are proportionally lower. Not everyone who holds a similar certification will receive the same level of job. Take for example, if jobs for a hundred teachers holding bachelor’s degrees were needed, it stands to reason only a hundred people will receive jobs. Let’s say one hundred and fifty individuals receive teaching degrees, only one hundred of those will get hired.
Competition among applicants will surely follow, and only people who can show they are above the fray will win out. To be successful in getting hired, many will invest in further education, and go on to earn a Master’s in Education. With this newly awarded credential in hand, they will then be able to apply with a considerable asset, which puts them ahead of those applicants with only the minimal job requirements. Incrementally, the Master’s graduates will obtain more of the jobs, while the displaced fifty will try to gain a foothold by earning their own Master’s degrees.
The end result of this sequence of events is that every job, over time, will require a Master’s degree, as there will be no reason to hire a person who has a bachelor’s, if an over abundance of Master’s degree holding individuals are available. As credential inflation marches on, even MBA’s will find it harder to find jobs because of increasing job market saturation by like minded degree holders. Connolly states that the recent downturn of the economy has left fewer jobs upon graduation, and the salary premium for M. B. A. ’s has also taken a hit (2003).
There are two opposing schools of thought that have tried to explain the recent upturn in educational expansion among the work force seen in recent years. Human capital theorists state that the growing complexity in the workplace has caused the growth of those seeking higher education. Theorists of social exclusion counter that the expanding intensive competitiveness between rivaling job market participants has caused credential inflation (McLean, Rollwagen, 2010). Either way, credential inflation is moving forward and fewer jobs are becoming available to those with less education.
As more individuals become “educated,” employers are pushed to expand initial job requirements, even in jobs where such requirements were never needed before. Taking a deeper look into this trend, Vaisey (2006, p. 835) states that, “Using the 1972-2002 General Social Survey, I find that the incidence of over-qualification has increased substantially… ” He also hypothesizes that workers who have more educational attainments than needed for their jobs will be less satisfied with their jobs.
Kariya (2011), sees a similar pattern and adds that as countries aim for higher levels of education for their populations, there is a persistent trend in the global markets to find cheaper labor. Phillip Brown, a lecturer in Sociology at the University of Kent at Canterbury, agrees, showing that the acquisition of higher education and the thought that it leads to greater individual and national prosperity keeps it at the forefront of developed countries’ agendas in their quest for global relevance (1995).
Countries are pushing citizens to further education, and like the United States, through financial aid programs, making the costs deferred to the future, while trying to secure credentials in the present. As costs for education go up along with an increasing education of the populace, a financial burden is attached to the individual to find a job to pay for such schooling. Unfortunately for these individuals, employers are looking for ways to find cheaper and cheaper labor, and not the reverse.
Payroll being the number one controllable expense in a company, makes the ability to hire individuals with higher credentials at lower wages, because of credential inflation, optimal. If an overabundance of degree holders are available at lower wages, why would a company seek to hire less educated workers for the same cost? To save time and resources, companies will simply thin out the applicants by making a certain credentials necessary to even apply, no matter the job. The Bureau of Labor Statistics provides evidence that as a country the United States has produced too many degree holding graduates.
The promise made to people about the success of those with a bachelor’s degree falls upon deaf ears when graduates find themselves employed where they could have gone without attending college at all. Not many graduates attended college with dreams of becoming a bartender or a bellhop, though statistics show both of these professions employ individuals with degrees in 16 percent and 17. 4 percent of their positions, respectively. As Brown, Lauder, and Ashton write in their book,. The global auction: The broken promises of education, jobs, and incomes,” even education alone will not be enough to escape unemployment, and individuals should weigh the costs and benefits of higher education carefully (2010). With credential inflation continuing on, we will see a time in the future where even the lowliest of jobs will be filled with college graduates. The future of credentialism paints a bleak picture for potential degree holders and future employees As credential inflation continues to grow, its effects upon the debt of graduates and the amount of jobs available to them, has become more apparent.