Go to a Cheap College — or None at All

By James Piereson & Naomi Schaefer Riley

Monday, April 15, 2019

When customers visit an Enterprise Rent-a-Car establishment for the first time, they are often pleasantly surprised to be waited on by a staff of young managers, typically in their 20s, well dressed, polite, and efficient. The situation is much in contrast to many operations that employ middle-aged managers and hire young people to work their way up doing routine tasks. At Enterprise, the youngsters actually run the show, and they do it very well. And it is not an accident. Enterprise adopted a policy several years ago of hiring young college graduates to staff their local rental agencies. It is a policy that is paying off both for the company and for the young employees, who quickly learn the ins and outs of managing an office.

Enterprise offers more entry-level jobs for college graduates than almost any other employer in the United States. Last year they hired 8,500 for their management-training program, 40 percent more than the next highest employer. But according to a recent cover story in the Chronicle of Higher Education, Enterprise does not concern itself with questions such as where its trainees went to college, what they majored in, or even how well they did when they were there. “We recognize that great talent can come from all types of institutions, all types of majors and backgrounds,” Marie Artim, Enterprise’s vice president for talent acquisition, explained.

As the Chronicle notes, “to the company, a college degree matters mostly because it suggests that a candidate has acquired the right mix of skills to succeed in an entry-level job — and to move up the ladder from there.” Instead, the company simply takes a bachelor’s degree to signify that applicants can engage in some degree of critical thinking, problem solving, and juggling different responsibilities at the same time.

This is what economists such as Ohio University’s Richard Vedder and George Mason’s Bryan Caplan have been arguing for years: College degrees are simply a signifier — an easy way of telling an employer that you have a basic grasp of the English language, some rudimentary math skills, and the ability to show up on time in clean clothes. On those measures, is a graduate of the University of Michigan any different from a graduate of Michigan State or Northern Michigan University? Not really. Does a 3.8 GPA predict that you will do better or worse at managing a car-rental office than someone with a 2.8 GPA? Probably not. Does majoring in business predict that you will do a better job than an English major or a sociology major or a physics major? It’s unlikely.

The management at Enterprise are saying aloud what many employers know to be true. Bosses who require a college degree are taking advantage of a system that does the sorting for them. They understand that a bachelor’s degree is not really necessary for doing an entry-level job, and that whatever your educational background, you will require significant training to do well in that particular position.

Surely there are plenty of high-school graduates who are qualified to run the front desk at a car-rental office. But finding out who those people are is more time-consuming than just looking at a résumé and seeing a bachelor’s degree. Too bad it costs most kids tens of thousands of dollars — not to mention the opportunity cost of several years out of the workforce — to get that piece of paper.

There are easier and cheaper ways to sort people. High schools could do more to teach the basic responsibility and functioning skills that they used to. In an age of helicopter parenting, though, many employers would wonder whether it was really parents who were responsible for high-functioning high-school students.

But surely a one- or two-year apprenticeship in any number of fields after high school could show the same evidence of critical thinking and responsibility. Unfortunately, the federal government does not subsidize those paths the same way we subsidize college education through financial aid. Such apprenticeship programs generally require the employer to take on the risk. When a potential employee drops out of such a program, the cost is borne by the employer. When someone drops out of college, the cost is borne only by the student and the taxpayer.

In an era when the obsession over getting into an elite college seems stronger than ever, it’s good to know that some companies don’t seem to care much about the higher-education hierarchy. But why should they care about it at all?