The need for highly specific skills means that virtually all employers in the sub-baccalaureate labor market look for experience when hiring, particularly for experience in virtually the same kind of procedure or production facility. Much more than formal schooling, experience is an indicator of the skills which employers value in sub-baccalaureate positions: mastery of specific machines, production processes, or office procedures; motivation and persistence; and the ability to work with others. Given the unavoidable uncertainty about a new hire, requiring substantial experience is the best way to reduce that uncertainty. Over and over again, employers in all four labor markets insisted on the importance of experience over formal education--even for relatively low-level positions like accounting clerks. As the compensation manager for a Palmdale firm acknowledged,
It would be unlikely that anyone could come directly [from schooling] into this [position], although it's not exactly a high-level job; but we're even requiring several years of accounting experience before someone could be in that position.
It is usually crucial to have experience in work specifically related to the firm's production process. For example, the director of machining for a company that makes castings reported that he looks for experienced machinists, but only
if I can find [experience] related to castings. You have to know what to select as a cutter, how to use the cutter, but there's a lot of technique with machining castings, you don't just throw it in the machine and hit the button. . . . Basically what I'll see [and hire] is a person who's been a machinist for four or five years and they'll have smatterings of machine castings; two or three times in their career they've learned castings.
Similarly, the manager of manufacturing precision metal-working machinery looks for
experience, and [other skills], depending on what we're looking for at that time. We usually have a specific need. We need an engine lathe filled or we need a CNC grinder filled. So we're looking for someone who can run that type of machine.
In some cases experience is required because of technological sophistication; the human resource manager of a semi-conductor firm in Palmdale said,
The demands of the factory are so sophisticated it takes someone with quite a bit of experience to understand and appreciate the environment they're going to be working in. What we don't want to do is turn a beginner loose on a four million dollar machine. So therefore what we're looking for is experienced people.
In other cases, experience is an indicator of personal skills necessary for the job. For example, a payroll processing company in Cotooli which stresses personal service to their customers looks for experience in any personal service capacity:
We feel that we can give technical and payroll training, but we can't change anyone's personality; we can't force them to be nice on the phone--so we basically go by service experience. Have they worked in a service industry and given quality service?
Given the ubiquitous demand for experience--and preferably experience specific to particular job demands--formal schooling is generally insufficient for hiring. Even in the Cotooli area, where the co-op program has established close working relations between education providers and employers, experience still dominates. As the human resource manager for a moderate-sized (230 employees) tool and die company described their hiring,[71]
When people come out of [the local community college and area vocational schools] they still truly have [only] the basics. Now, granted, they have a lot stronger basics than what we would normally find if we were just hiring somebody off the street. But we still consider that to be without previous shop experience. We would consider that to be entry-level. We would have a window between $6.00 and $7.50 an hour. That is what we would normally pay someone that was just coming out of a vocational school or out of [the local community college] with little or no experience. Because truly in those areas, the experience is really the key. You can't truly learn everything there is to know in the classroom in order to excel and climb up the ladder. They're not going to go to a school and come in here at the top. It will not happen.
In a few cases, employers did acknowledge that a combination of formal schooling and experience would be ideal or that education made progress on the job easier. As a personnel manager for Palmdale credit union mentioned,
I have personally noticed that those individuals who were hired because they had a two-year or a four-year degree in comparison to others who have worked their way up tend to know their job and take less time in training to learn their job than those who have worked their way up and are cross-trained. The level of what they can do on the job is far more advanced because they have the technical background to do it. . . . You can only do so much cross-training and then you really need [formal schooling].
However, this firm requires experience for virtually all its employees but does not compel its employees to have postsecondary education, so its practices contradict the statement about the superiority of better-educated workers.
Even in the cases where there is some recognition of the value of schooling, there remains some ambivalence about formal education, a tendency to hedge about its value, and a sense that in any specific hiring decision the individual with experience would win out over those with formal schooling. An excellent example of such ambivalence toward education came from the plant manager of a food processing company in Frankton:
I always like to hire somebody who has some experience in a college environment. It says something about the person's integrity. They understand that education is important. It balances you out. I'm a firm believer that you can learn it all on the job, but I think it's good to have some of that textbook theory behind you. But experience is very important, and someone who has spent all of their time in school is going to have some hard knocks ahead.
This firm wanted their machinists to have five years of experience and acknowledged preferring experience over education in all their positions--effectively undermining in practice whatever individuals might believe about the value of "textbook theory." Similarly, the human resource manager for a large computer networking firms in the Palmdale area said the following about hiring individuals for business management:
It would depend upon what work experience they've had as to whether we'd be interested. For example, we hired someone in our department, in employment, who was working as a temporary in an employment department in a clerical position. She did have an A.A. degree, I think it was in general business, but it was really the work experience that did it. . . . An A.A. business degree by itself wouldn't buy a whole lot.
In part, the ambivalence toward formal education is linked to the need for highly specific skills which are too narrow to find in any educational institution. For example, the personnel manager of a Frankton firm that produces box-forming and cartoning machines reported,
I have specifically told [the engineering manager] that I do not want anyone any longer whom we have to train. I want someone with either a college education, even if it's [the local community college], or junior college education, but I want somebody who has some background and work experience if possible.
However, she then went on to complain about the impossibility of finding education programs specifically related to carton equipment manufacturing:
You can have a super education, [but] if they don't have anything in our line of products, it's worthless. It's start from square one. . . . There is, only, I think, one college in the United States that really has a program that trains for our industry, and I think it's . . . in the Midwest. . . . I think it [the skill required] is just too specific [for colleges to offer programs]. I think, it seems to be my experience, if you end up getting a job with one of these companies, you pretty much stay in this industry for the rest of your life.
In practice, then, experience is the only way to break into this industry, despite whatever general value schooling might have.
In most firms, it is difficult to compensate for a lack of experience with sub-baccalaureate credentials. While a combination of experience with some community college coursework might be ideal for some positions, an individual without experience would not find a position simply by accumulating community college credits. There are some exceptions, especially for low-level positions; but in these cases, postsecondary education is simply an alternative source of learning particular skills, not a requirements. For example, the director of personnel for the phone company in Rosefield stated:
For our general clerical jobs, applicants must have a two-year degree from either a business college or a community college or experience to be qualified. Those with the educational background aren't really rated higher than those with just clerical experience. . . .A two-year degree really does not make someone a better candidate than someone who has a work history and no college. We give most of our applicants general aptitude tests; we also give tests in skills such as typing, keying. They just have to meet all the basics. So a two-year degree doesn't really give anyone a higher rating.
In only two cases did we find a relatively clear trade-off between experience and education. As the personnel director of a high-tech manufacturing firm in Palmdale described it,[72]
The rule of thumb is two years experience for every year of education. If [applicants] have been doing test technician work for four years, again the rule of thumb would be the equivalent of an A.A. degree--if they were paying attention [in college], and it doesn't always hold true.
However, this is also one of the few firms that require an associate degree for their technicians, so it is an exception to the general pattern of insisting on experience over formal schooling.
The only exception to the general pattern of requiring experience among new hires came in a few companies working with such advanced technologies that there is not yet a pool of experienced workers. For example, a firm manufacturing lasers in the Palmdale area hires its employees from an Iowa community college that has established a program carefully tailored to the firm's needs and from a proprietary school in Phoenix with a similar program; it cannot find individuals experienced in laser production because the technology is too new. But this example does not challenge the general pattern of preferring experience over formal schooling within the sub-baccalaureate labor market; it simply reflects a rarefied case where it is impossible for employers to find substantial numbers of experienced workers.[73]
The strong preference for individuals with experience creates a problem for new entrants into the sub-baccalaureate labor market: If every employer requires experience, it becomes difficult to enter the labor market and accumulate this experience. As one employer acknowledged,
My feeling is that entry level is tough: They really don't have any place to go unless there's a tremendous shortage.
While the lack of experience is not a problem for individuals seeking upgrade training, it is serious both for new entrants into the labor force and for those being retrained who lack experience specific to the occupation they are trying to enter. One consequence is that upgrade training--as distinct from education for new entrants and retraining--seems to be more effective because the placement rates from initial training and retraining are likely to be low. The director of an area vocational school near Frankton remarked about an unsuccessful program to train unemployed individuals as drafters:
If you were somebody who was a draftsman for fifteen or twenty years and you're just now learning the computerized part of it, you'll be pretty competitive. But if you're a high school student who wants to go out and get a job, it's gonna be really tough. So, in terms of being able to place a lot of people, that [drafting program for the unemployed] wasn't one of our wisest choices. Retraining for people who are already employed [that is, upgrade training]--that was great.
In fact, part of the growth of contract education can be attributed to the fact that upgrade training does not suffer the uncertainty about placement typical of education for initial entry and retraining.
Given the importance of experience to hiring, the powerful advantage of the co-op programs so prevalent in Cotooli becomes evident: Such programs allow students to accumulate specific experience while they acquire formal schooling. A personnel manager for a prominent machine-tool company in Cotooli described the advantage to both the student and the firm:
[Co-op students] have at least some experience and they know the application of what they're learning. . . . Once they graduate, we have a tendency to hire those people. So then, when they're competing [with other applicants], they're competing with other people who have two-year or college degrees, but they have some hands-on experience in the company.
Like experience, a co-op placement also allows employers to obtain information about personal attributes. As the director of technology transfer for a technical institute in Cotooli mentioned about the co-op program,
First of all, it's a screening test for them to see, "Do I even want to hire this guy?" I know their work ethic; I know their work habits.
In whatever form it takes, experience conveys information about job applicants that formal schooling by itself does not.
The providers of education in the Cotooli area are equally aware of the importance of experience (in sharp contrast to educators in the other three areas who made little reference to experience). As one of the coordinators for the co-op program at the well-regarded technical institute in Cotooli acknowledged,
The most important thing is that because it is a two-year school, that two years of education really just gets them started educationally on a career. And a lot of employers wouldn't be able to capitalize on just that education if the students hadn't had some hands-on experience besides the labs. We've got about a 60/40 mix of lab/theory, in favor of theory by the way. And so the lab work is not enough to make a typical student credible on the job market. So cooperative education experience definitely helps.
Given the importance of experience in gaining access to jobs in the sub-baccalaureate labor market, it remains unclear where individuals get their initial experience. We suspect that there are many sources: Some start working for temporary help agencies (as several educators mentioned, especially in Palmdale); some gain experience as part of school-based programs, like co-op placements; some work initially for smaller firms which cannot require experience; and some work their way up from unskilled positions.
In addition to requiring experience, it is possible for employers to devise formal and informal job tests to see if applicants are qualified. In most cases, these involve interviews. Often--particularly in firms that were self-consciously trying to make their production workers more responsible--applicants are interviewed by teams of production workers. For example, one high-tech manufacturer in Palmdale uses a "behavioral interviewing technique" with four to eight current employees; the interviews start with sets of skills defined by the supervisor and ask the candidate in what ways he or she has used these skills. While this particular interview format appears to focus on technical job skills, it is also a way of determining the "entire profile of the individual," including communications skills, responsibility, and other aspects of personality mentioned as critical by the director of human resources; as a director of electronics technicians for a semiconductor firm remarked about their interview procedure, "We kind of have the department vote as to whether the person looks like they fit in." Another described the interview process for technicians in similar terms, stressing the importance of detecting particular personal attributes:
Entry-level people don't have work experience, so it's a little hard to ask specific questions. It's more like a personality interview. I look at how they'll fit in with others and what their work ethic is. I ask, "What type of motivation do they have? What kind of initiative do they have?" I look for logical trouble-shooting skills. I look to see if they have shown motivation and initiative in their past experience.
Other job tests are informal or truncated performance tests. For example, one high-tech manufacturer has applicants for technical assembly jobs assemble a few parts and read mechanical drawings; applicants for quality control positions examine circuit boards with known defects; and applicants for electronics technicians take a thirteen-item test on digital technology. Sometimes these tests are quite simple but revealing, at least to employers. For example, the personnel manager of a box-forming equipment manufacturer in Frankton gives applicants for drafting and machining positions a blueprint:
One of the skills [required] is reading the print. It might seem simple but there [are] a lot of people out there that--they say they've been in this work, and I say, "Well, here's a real easy print." And they'll look at it and you can just tell--that's what we always say, you can tell in the eyes. They're lost, it might as well be in Chinese.
Similarly, a supervisor of machinists asks applicants to read complex blueprints, and
then I'll show them the machinery and ask them if they've ever run anything similar to it. Mainly, I'll ask them if they think they can do the job; 99.9% say they can, but you can tell if a guy's eyes get real big and he's never seen anything like it before.
In a few cases, managers ask applicants whether people fix their own cars as a way of examining their mechanical aptitude; in one idiosyncratic case, a personnel manager of a plastics fabricating firm asks interviewees about their hobbies:
We don't hire people who say, "riding my bike, fishing." They have to like working with their hands on something.
For these sub-baccalaureate jobs, very few employers devise formal or complex hiring procedures.[74] It is likely that small size explains the lack of formal job tests for many employers, though even relatively large firms lack formalized employment-related tests, perhaps because of fear (or simply uncertainty) about the legality of such tests. One electronics supervisor of a large computer manufacturer in Rosefield reluctantly admitted that equal opportunity issues were responsible for the lack of a test--"it's too difficult to standardize that and to go through the legal requirements to having a standardized test"--and his supervisor asked, "Isn't it illegal to give pre-employment tests?"[75]
The other ubiquitous way of reducing the uncertainty of new hires is to have a probationary period. Commonly, this is a ninety-day period after which employees can be dismissed for any reason. In a variant of this practice, firms sometimes hire workers from temporary agencies for ninety days or even longer, and decide at the end of this probationary period whether to convert them to permanent employees, keep them as temporary workers, or let them go.[76] One bank carried out the identical practice by hiring individuals as part-time "interns" for six months, after which they were reviewed for permanent positions. In this way probationary employees can be readily dismissed if they do not work out without risking lawsuits or unemployment insurance claims. In essence, a probationary period can be interpreted as an extended job interview: During that period, the workers in a firm can observe a new hire's skills, motivation, ability to work with others, ability to learn new tasks, and adaptability. What is crucial about probation as a kind of hiring mechanism is that (like experience itself) it emphasizes performance on the job and provides no advantage to educational credentials unless formal schooling has made the individual perform better.
Because of the dominance of experience, informal job tests, and probationary periods in hiring, we found little role for sub-baccalaureate credentials in the occupations we examined--with the crucial exception of the high school diploma, which is required for virtually every position. However, the certificates and associate degrees awarded by community colleges and technical institutes, the shorter programs available in area vocational schools, and the short programs that students put together by taking a few courses in a community college were rarely mentioned as hiring requirements. There is one important exception, however: Several high-tech manufacturers in the Palmdale area require associate degrees for their electronics technicians, particularly one international firm whose employment standards are set by the national headquarters in New York; many firms in Rosefield require associate degrees for electronics technicians; and several firms in Cotooli require associate degrees in electronics or electro-mechanical engineering for their technicians. Of the six occupations we examined, such requirements occur almost exclusively in electronics.[77] This kind of policy is established differently for different occupations; for example, the computer networking firm in Palmdale whose personnel manager declared that "an A.A. business degree by itself wouldn't buy a whole lot" also requires an associate degree for its electronics technicians, and the phone company in Rosefield whose personnel director acknowledged that "a two-year degree really does not make someone a better candidate" does prefer that electronics technicians have at least a two-year degree. The field of electronics is an exception, then, to the general indifference toward sub-baccalaureate credentials.
It is much more common simply to require a certain amount of training regardless of the source rather than to require a sub-baccalaureate credential. For example, another high-tech firm in Palmdale looks for two years of training but without differentiating whether it comes from formal schooling, the military, or on-the-job training at another firm--and it simply sees whether applicants have the requisite capacities regardless of the source.[78] As a result of focusing on capacities rather than the source of training, a number of educators acknowledged that sub-baccalaureate credentials do not have much value as credentials; as the dean of vocational education in a community college near Rosefield acknowledged,
[Students] get a certificate so they have something to show to the welding [employers] where they really don't care. The industry could care less [about credentials], just so they can do the job. And in the mechanical trades, they don't really care. The manufacturers allow them to have A.A. degrees, but they just want them to have the skills. It's just depending on which particular areas you're talking about. And the reason [the demand for credentials] is high in electronics is because to get the position of technician it is required by the industry to have an A.A. degree. Now when we move into more of the service industry, they won't care.
Some employers did express a preference for sub-baccalaureate credentials; that is, an individual with postsecondary education would be hired over an applicant with similar experience without such education; but in cases of such preference, some experience is still commonly necessary. For example, the manager of a credit union in Palmdale said about their management and accounting positions,
We'd prefer a two-year degree at least. We have made exceptions if they have previous experience. We will occasionally find someone who is an incredible individual, who has no college background and possibly no experience in the financial industry, but has, say, wonderful interpersonal skills. . . . But we usually don't hire someone with absolutely no experience at all.
Similarly, a human resource manager for a large Rosefield computer manufacturer who claimed to recruit from two-year colleges stated that "community college degrees are desirable, but we look for experience most of all." In these cases it is clear that experience was the basic requirement and community college education an additional benefit rather than the other way around. As the manager of machining for a casting firm commented,
There was a time we were running three shifts a day, six days a week, and I had two or three guys that had gone through [the local community college]. We didn't look at the schooling as much to hire them as their experience.
Similarly, a recruiter for a temporary agency for drafters and other technical workers in the Rosefield area said,
We do hire those people [from community colleges]. The more education, the better; the more experience, the better. We don't hire for education alone: Job experience is more significant.
Because employers will give some preference to applicants with community college credentials, such individuals can often make their way into middle-skilled positions by working their way up from relatively unskilled positions--a process we might call (as many instructors do) the "foot in the door" method of gaining access. As an accounting instructor described it,
[A firm] will hire someone at a two-year level as the go-fer. It's a good opportunity. They see how the business operates and sometimes get to do some drawing. . . . They get some good experience. If they show some aptitude toward drafting, they might get put on the boards. . . . In fact, I've run across a small number of people who have worked up through the architectural ranks over the years, where you can actually become an architectural engineer by putting in an amount of time--eight years for an architect--which qualifies you to take a test, and if you pass that then you can take the licensing test and go on to become an architectural engineer. That's what we typically call working up the hard way.
In this case, initial positions directly after completing a community college program are unskilled; only with "aptitude," experience, and mobility over time do individuals move into middle-skilled positions.[79]
Several employers who acknowledged that postsecondary schooling would give applicants an edge over others indicated that additional education was a signal of greater motivation and persistence, not necessarily an indicator of better technical or job-specific skills since job-specific skills must be more firm-specific, more specific to particular machines, production processes, and firm practices than educational institutions can provide.[80] For example, a production manager for a plastics fabricator praised community college students in terms that omitted any reference to the quality of education:
Community college students are really good employees. They went to school and they have demonstrated that they have a certain amount of discipline. They have mechanical aptitude. They have interest and desire as well as lots of other pluses.
Similarly, the director of personnel of a glass manufacturer in Rosefield, a continuous-process manufacturing establishment that places a great premium on stability, commented about the range of postsecondary credentials:
Stability is looked at real seriously. I think a four-year program may be perceived by employers as being more stable than a two-year program: A two-year program may look easy to achieve versus a four-year program. Getting a certificate does not look as though the person has put forth the effort compared to a degree.
Among those employers who expressed some preference for postsecondary education in deciding whom to hire, none of them provides a wage differential for additional schooling.[81] Wage differentials are associated with various jobs--some of which may require baccalaureate or advanced degrees, of course, but not sub-baccalaureate credentials--and most importantly with experience, particularly as experience and job performance get individuals promoted into upper-level positions; but new hires are not given any premium for having additional education or training. Therefore, individuals with community college or other sub-baccalaureate education can increase their earnings by having a greater likelihood of being hired in positions within the sub-baccalaureate labor market, especially in positions with possibilities for advancement and on-the-job training; and their postsecondary education may make them more productive on the job, which will earn them promotion over time. But unlike the baccalaureate degree, their postsecondary education will not in itself move them higher up the salary scale.[82] As a manager in a high-tech firm--an individual who serves on the advisory committee of a local community college--remarked about community college education (and indeed postsecondary education in general):
It comes to the reward that you will get from attending these classes or education. And the answer is zero. You do not get a financial reward for attending any class. You do not get any financial reward for showing proficiency through attendance at educational universities. You do get financially rewarded for performance, which perhaps is enhanced by having a better education. You do get financially rewarded for results, which again may be enhanced by having a broader knowledge of the subject.
However, there is an important caveat to our finding: Because we interviewed employers during a recession with unemployment rates quite high, the hiring standards we heard about were those in force when employers have the greatest choice among applicants. The hiring criteria in periods of expansion and relative shortages of skilled labor are less certain. Several employers did mention that they hired more individuals from postsecondary institutions during the mid-1980s when unemployment rates were lower.[83] Similarly, an employer in Cotooli described how hiring standards varied during periods of surplus and shortage:
[In the mid-1980s] we got [1800 manufacturing] people from a lot of these companies that had gone down. So we raised the bar [i.e., hiring standards] at that point in time based solely on experience, not on education. Now we've got 1,000 people laid off, so it's '80 and '84 people are going away, and all of a sudden we're going to be down to '79s [where the numbers refer to the year hired in a seniority-based layoff system]. If we ever hire again, and someday we will, I keep preaching that the fertile ground won't be there for these skilled people because by the mid-'90s they will have passed through the system, been retreaded, . . . and then we're going to have to take people with training as opposed to people with experience.
That is, during periods when a surplus of labor in any particular occupation develops, employers base hiring on experience; and they turn to individuals with formal education only when there are relative shortages.
Thus, we can turn the potential limitation of interviewing employers during a recession on its head: We learned about employers' strongest preferences in hiring during a period when they have had the luxury of many applicants from whom to choose. The dominant preference for relatively specific experience over either formal schooling or more general experience should persist into periods of expansion when they have less choice; they may then be forced to hire more individuals with limited experience directly from educational institutions, but such individuals will still be further down in the queue of applicants hired than will those with specific experience.[84] Furthermore, the varied perceptions of community colleges and other education providers should persist into periods of expansion as well. The indifference of many employers towards postsecondary occupational programs and the varied opinions among others reflect more deeply rooted perceptions that expansionary periods may not dispel.
[71] This firm has established an apprenticeship program for machinists with the local community college mentioned in this quotation, so there is substantial contact with the institution. This is not, therefore, a complaint about the community college being out of touch with the needs of industry, as is frequently the case in other labor markets; rather, it reflects the volume of what skilled machinists need to know.
[72] The other example came in a revenue accounting department of a Cotooli employer who said that an associate's degree was the equivalent of two or three years of experience.
[73] Community colleges could devise programs in these specialized niches as ways of providing direct entry into high technology employment. A few colleges have been able to do so, as the example of the laser manufacturer indicates. But this strategy cannot work for very many students since these areas of specialized employment are always likely to be small.
[74] One of the very few exceptions is the municipal utility district in Rosefield, governed by civil service regulations, that has devised a "school-like" test for its accountant applicants.
[75] If a test is found to have a disproportionate impact on a protected class--women or minority employees, for example--then the employer must be able to show that the test is job-related (see Wilcox, Grubb, & Lee, 1992, pp. 41-35-41-50.3). The employers we interviewed seem to fear the threat of a lawsuit rather than think that they cannot devise a job-related test. However, informal hiring practices as well as formalized hiring tests are subject to the same burden of proof, so relying on informal hiring procedures and experience does not help employers avoid the threat of a lawsuit.
[76] Some individuals work for extended periods of time for one employer but as the employees of temporary help agencies; we found examples of "temporary" workers staying up to three years in a single position. We will return to this practice in discussing the trends in the sub-baccalaureate labor market.
[77] The only other case of requiring an associate degree came in the case of a large Rosefield data processing firm that specifies an associate degree in computer information science for its operators. Of course, certain health occupations require specific community college credentials.
[78] Occasionally an employer will have strong preferences about the source of training. One, for example, reported not hiring individuals who were trained in the military because of their rigid approach to work, while another reported preferring military training because it ensured discipline.
[79] This kind of process corroborates the conclusion in Grubb (1992b) and other statistical papers that the benefits of sub-baccalaureate credentials do not materialize until after a number of years of accumulating experience and on-the-job training.
[80] The indications that employers view sub-baccalaureate education as an indicator of motivation and persistence rather than job-related skills is consistent with the statistical results in Grubb (forthcoming-a). These results indicate that certificates and associate degrees (but not baccalaureate degrees) are used as signals of ability rather than of intrinsic productivity. While tests of the value of education as a signal of ability--rather than a way of instilling the cognitive, manipulative, and behavioral capacities that make individuals more productive (as the human capital school has often assumed)--are difficult to carry out, the consistency of statistical tests and evidence from employers suggests that a good deal of signaling does go on in the middle-skills labor market.
[81] Among all the employers we interviewed, there was only a single exception: A large insurance company in Cotooli hires high school graduates into Clerk I and Clerk II positions, while individuals with community college education and associate degrees are generally hired as Clerk III and Clerk IV. (The next step, to Accountant I, requires a B.A. degree.) The unusual differential for community college graduates may be a result of the fact that the accounting department in this company was especially rigidly structured--"That's the way the bean counters are," reported the director of personnel. In addition, a large manufacturer of milling machines in Cotooli is considering developing a wage incentive for their workers to take postsecondary coursework--what the director of human resources called skill-based pay--but this practice had not moved beyond the planning stage. Finally, a large manufacturer of milling machines and machine tools in Cotooli claimed that better-educated hires would receive more pay. However, the procedure is that supervisors can request various rates of pay for applicants that they think have various qualifications, and there is no set formula for pay by education levels.
[82] Again, these results based on employer responses are consistent with the quantitative results in Grubb (1992b, 1992 forthcoming-b). These statistical results indicate that individuals earning associate degrees and (for women) certificates do in fact have higher earnings; but they do so by gaining access to positions--particularly professional and managerial positions for men and professional positions for women (Grubb, 1992a)--where they can accumulate more labor market experience and more on-the-job training (OJT). Once experience and OJT are controlled, there are no additional returns to sub-baccalaureate credentials--similar to the finding that there are no salary differentials awarded for sub-baccalaureate education.
[83] Very few employers ventured to describe their hiring practices prior to the recession, however: They have relatively short memories, and the small and middle-sized firms that dominated our interviews have no employment policy to refer to.
[84] The conception of hiring from a queue comes from Thurow and Lucas (1972). What remains unclear is whether in periods of expansion sub-baccalaureate education and credentials are given greater preference in hiring than general experience or information from informal job tests and other sources.