UV Letters

Jul 8, 2016 BACK

License To Kill

Volume VI, #14

It’s funny how weird things seem normal when you grow up with them. Toronto in the 70s and 80s was no exception. Like only being able to buy beer from a government store that wouldn’t have been out of place in the Soviet Union. Like the fact that two of the eight teams in the Canadian Football League shared the same name: the Ottawa Rough Riders and the Saskatchewan Roughriders. And like the fact that the church some of my friends attended every Sunday seemed to be named for Her Majesty’s top spy: St. James-Bond Church.

I was reminded of this as UK voters opted out of the European Union, shocking markets and throwing both Conservative and Labor Parties into turmoil. The referendum vote – a commitment taken by David Cameron over a pizza dinner at O’Hare Airport (a reminder that world-changing decisions can benefit from solemnity) – was a protest against the status quo: against the London political elite to be sure, but also against the UK’s opening to European and global markets.

It is an economic truism that trade and migration produce more wealth in aggregate. It is equally true that globalization dislocates workers in less competitive industries. Dislocated workers become disgruntled voters. The Brexit vote – and the pending nomination of Donald Trump as the Republican nominee for President – seems to demonstrate that leaving the economy prostrate to global forces while failing to retrain, reskill and perhaps relocate workers who have been left behind is no longer a sustainable approach. As a result, we face a fundamental choice: Will we retreat from free trade and humane immigration policies à la Brexit? Or will we help dislocated, disgruntled workers join the global economy.

With the UK first to choose, there’s only one man for the job. Whenever the UK is in peril, James Bond gets the girl and saves the day (in that order). So I wonder WWJD: What Would James Do?

***

Bond: That looks like a woman’s gun.
Largo: Do you know a lot about guns, Mr. Bond?
Bond: No, but I know a little about women.
- Thunderball

007 has a knack for cutting to the heart of the matter. And the heart of the great globalization debate isn’t necessarily that left-behind workers are unskilled. Many could well have the necessary skills to work productively in a competitive and growing sector of the economy. We don’t know if they have the skills because employers in competitive and growing sectors don’t take the time and care to assess skills. They use a shorthand we call credentials. It wouldn’t take long for Bond to discover that virtually all left-behind workers are uncredentialed; he’d only have to go as far as last week’s Georgetown report showing that college graduates took 11.5M of the 11.6M jobs added since 2010. And when governments support, promote, regulate or legislate minimum credentials for jobs, they are doing real harm to uncredentialed, left-behind workers.

Requiring a government license in order to work used to seem normal to me. Growing up in Canada, you practically needed a license to cross the street. But it has gotten out of control. Today, nearly 30% of U.S. jobs require a license to work – about the triple the rate of a generation ago. As the New York Times recently noted, one now needs a license “in Florida, to sell a yacht. In Montana… to be an egg candler; in Utah, to repair upholstery; in Louisiana, to be a florist.” In addition to florists, states are requiring licenses for bartenders, auctioneers, pastoral counselors, exotic dancers, locksmiths, tour guides, personal trainers and hair stylists.

While states have a legitimate interest in setting standards for professions that impact health and safety, “Why in the world do we regulate barbers?” asked the lieutenant governor of Nevada, quoted in the Times. “A bad haircut is the last thing that a person is going to put up with and return to. It is the ultimate example of self-regulating industry.”

***

Q: Every now and then a trigger has to be pulled.
Bond: Or not pulled. - Skyfall

The problem, of course, is that licensure combines a qualifying exam with the requirement of a postsecondary credential. And this is the trigger that Bond would tell governments not to pull. In attempting to mesh with the existing degree monoculture, states are imposing high costs (and low completion rates) on those who can least afford it. While licensure ostensibly protects consumers and definitely protects incumbent (i.e., credentialed) workers, increasing their wages by approximately 15%, it is furthering a two-tier economy: killing uncredentialed workers and jeopardizing the entire globalization enterprise. It is truly a License to Kill.

The licensure impulse can be viewed as an understandable reaction to globalization. There’s ‎a sense of being inundated by a flood of low quality imported manufactured goods. But we also can't imagine living without cheap electronics, toys and other manufactures. So short of ensuring that imported products don't kill us immediately or overtly, government’s quality control impulse – one legitimately derived from numerous seminal experiences over the course of the 20th century (e.g., Thalidomide, Ralph Nader) – is increasingly manifested in services as licensure creeps from profession to profession. This explains why the states killing the most left-behind workers with licenses are the anti-globalization states most likely to vote Trump this fall.

State governments need to stop killing dislocated, disgruntled and uncredentialed workers via licensure. Doing so may be key to avoiding the mistake of Brexit and averting a Trump presidency – a weird thing that would not be funny or normal.

University Ventures (UV) is the premier investment firm focused exclusively on the global higher education sector. UV pursues a differentiated strategy of 'innovation from within'. By partnering with top-tier universities and colleges, and then strategically directing private capital to develop programs of exceptional quality that address major economic and social needs, UV is setting new standards for student outcomes and advancing the development of the next generation of colleges and universities on a global scale.

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Three articles that tell us where the puck is going in higher education

1. Higher Education Apartheid Hechinger Report feature on how the rich-poor divide on college campuses is getting wider, fast, by Jon Marcus and Holly Hacker. Higher education has… become more segregated than ever by wealth and race as state funding has fallen and colleges and universities — and even states and the federal government — are shifting financial aid from lower-income to higher-income students. This has created a system that spends the least on those who need the most help and the most on those who arguably need the least. Read more 2. Experts Give Federal Student Aid System a Failing Grade Diverse Education report on National Association of Student and Financial Aid Administrators (NASFAA) briefing on “State of Student Aid,” by Jamaal Abdul-Alim. Brad Barnett, senior associate director of scholarships and financial aid at James Madison University, said the [federal student aid] system is so complex that, when financial aid officers took a game-show-style quiz on repayment options during a recent professional gathering, most got the answers wrong. Read more 3. The Evolution of Hiring TechTarget case study on L’Oreal China implementation of new recruitment software, providing insight on the evolution of candidate filtering technology and the relative importance of credentials in the hiring process. Technology is not replacing the full recruitment process, but it provides more data-driven insight, a more analytic view on who might fit better than just looking at a resume. Read more