BILL MCMORRIS: How The Supreme Court Created The Student Loan Bubble: It all starts with Griggs v. Duke Power Co.
The lie that props up our Big Education regime is that the GI Bill, which paid for World War II veterans to attend college, produced the upward mobility and economic boom of the postwar period. It’s a heartwarming story, the veteran who would have been a dust farmer but for the grace of government generosity. But it just isn’t true. Only one out of every eight returning veterans attended college. The rest, the vast majority, benefited from something even more egalitarian: aptitude testing. The format favors raw talent above all else, allowing companies to hire high-potential candidates from any background and groom them to fit the company’s needs.
These tactics came to commerce from a familiar source.The armed services were forced to process hundreds of thousands of recruits during the war, and in order to filter and assign soldiers, the government developed aptitude tests. Businesses witnessed the U.S. defeat the two most efficient peoples known to man, thought there must be something to this whole testing thing, and followed suit. The chief hiring metric in the postwar era was not whether someone had a degree, but whether he had the aptitude that would enable him to succeed. Every industry from blue-blooded high finance to immigrant-heavy manufacturing employed testing to determine who would rise through the ranks, regardless of lineage, heritage, or education. Testing enabled men who set out to be blue-collar workers to ascend based solely on their ability. . . .
Two years ago I interviewed Den Black, a former automotive engineer at GM supplier Delphi whose pension was slashed to speed up the auto bailout. His backstory interested me nearly as much as his grievance with the Obama administration. A few years before the Supreme Court issued the Griggs decision, he set out to join his brother as a line-worker at General Motors. He hadn’t been the best student, didn’t care much for school, but submitted to the hiring exam. The test revealed that he had an advanced understanding of physics and mathematics. Within a few years, he was given the opportunity to take the entrance exam to General Motors University. After two years at GMU, where he combined shiftwork with education, he emerged an engineer in management. It’s no bachelor’s degree, but judging by the patents he helped generate, it was a worthy investment.
The Griggs decision has made that organic rise through the ranks impossible, as disparate impact left businesses liable for those who failed to pass hiring tests.
“Most legitimate job selection practices, including those that predict productivity better than alternatives, will routinely trigger liability under the current rule,” Wax wrote in a 2011 paper titled “Disparate Impact Realism.”
The solution for businesses post-Griggs was obvious: outsource screening to colleges, which are allowed to weed out poor candidates based on test scores. The bachelor’s degree, previously reserved for academics, doctors, and lawyers, became the de facto credential required for any white-collar job.
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