Slacktivist credit scoring and unemployment
MSN Money's Liz Pulliam Weston says a survey of HR managers found the use of credit-checks in hiring had increased from 25 percent in 1998 to 43 percent in 2006. Weston also describes the elegantly nasty conundrum this creates for those who lost their jobs in the global financial crisis:
Many Americans these days are discovering the Catch-22 of unemployment. And that is: You might fall behind on your bills because you've lost your job, and you might not be able to land a new job because you've fallen behind on your bills.
The credit agencies claim that this service they're selling of credit-checks on job applicants can reduce employee fraud and workplace violence.
Asked to provide evidence of this claim, they repeat the assertion in a much louder voice and remind us that fraud and workplace violence are undesirable.
Which is to say they have no evidence for this claim and that there is no evidence for this claim. It's just something that Transunion, Equifax and Experian hope that their corporate clients will come to believe if they repeat it often enough.
Andrew Martin of The New York Times pursued this point back in April, producing a dark comedy of twisting evasions from representatives of the credit agencies. (See: "As a Hiring Filter, Credit Checks Draw Questions.")
So why, then, is something cruel, self-defeating and broadly destructive becoming more widespread?
A big reason, I suspect, is the foolishness I was mocking in the previous post that leads many to prefer the misplaced concreteness of quantitative measures -- evenly patently absurd and arbitrary ones -- over qualitative judgments.
Judgment also requires one to take responsibility for one's decisions -- and here we come to what seems to be the primary selling-point for the credit agencies.
"Every time you hire a new employee, you put a lot on the line," an Experian brochure reads. "The wrong decision could jeopardize your firm's assets, reputation or security."
That sales pitch has nothing to do with any actual risk to a firm's "assets, reputation or security." It has everything to do with shielding clients from blame for hiring decisions that don't work out well. This is really what they're selling -- an insurance policy against blame for hiring the wrong employee, a way to deflect and avoid responsibility.
(If I'm right about that, then the survey Liz Pulliam Weston cited would indicate that in 2006, 46 percent of American Human Resource managers were lazy, timid, indecisive, irresponsible and desperate to deflect blame. Hmmm. That sounds a little low.)
Hawaii and Washington state prohibit the use of credit scoring in employment decisions. Similar bans were proposed recently in California, Maryland and Connecticut, prompting aggressive lobbying from the credit agencies to protect their little racket.
See also:
Business: As a Hiring Filter, Credit Checks Draw Questions
By ANDREW MARTIN
Published: April 9, 2010
Opponents said there was no evidence that people with weak credit are more likely to be bad employees.