Tearing the Paper Ceiling: Identifying the Legal Levers to Rewire the Labor Market

The job search process was frustrating for Keith. When he read the description of open roles companies posted online, he knew he had the skills required, but without a college degree, he lacked any way to prove it. As Keith shared, “Certain jobs would automatically turn you down in the application process if you didn’t have a degree.”

Keith isn’t alone in his experience. More than 70 million workers in the United States, over half of the country’s workforce, did not complete a bachelor’s degree but instead are skilled through alternative routes, a talent category called STARs (skilled through alternative routes). These workers built their skills through a wide variety of pathways, including the military, trade professions, community college, as caregivers, and by learning on the job.

STARs hit barriers, like degree screens, at every turn in their job search. Even though STARs make up the majority of U.S. workers, the U.S. economy systematically locks them out of opportunities for economic mobility. Over 70 percent of new U.S. job postings between 2008 and 2017 required a college degree. This paper ceiling, analogous to the glass ceiling, doesn’t just impact workers—employers feel the pain as well by losing out on a huge swath of people, many of whom already have the skills to succeed in higher-wage jobs.

Consider the case of IBM’s campus in Rocket Center, West Virginia, which was having a difficult time finding skilled workers for their network administrator roles. “The IT and Security workforce is highly in demand; there are more openings than people that are able to fill them,” shares Roger, a Data Center manager. Conventional recruiting techniques would automatically screen out about 97,000 workers who do not have a college degree but already have the practical skills needed for the administrator role. That’s just one example of the way the paper ceiling of degree requirements feeds into the skills and talent shortage employers across the country are facing.

Economic and Community Impact

The impact of the paper ceiling hits communities of color and rural communities particularly hard. Sixty-one percent of Black workers, 55 percent of Hispanic workers, 66 percent of rural workers, and 62 percent of veterans are STARs. Between 2000 and 2019, STARs actually lost access to 7.4 million jobs that would have traditionally provided them with pathways to economic mobility but now require a degree—jobs like registered nurses, managers, and administrative assistants that once provided a pathway to the middle class.

Additional research from Opportunity @Work found that a STAR who started their career in 1989 would—on average—need to work for 30 years to catch up to the wage a college-educated worker earned on the first day of their career. In short, our reliance on degree requirements as a proxy for job readiness has created a reality where a four-year education is valued more than a career’s worth of on-the-job experience.

It’s Not Just Degree Requirements on Job Descriptions

You can’t hire who you can’t see. Many companies use tools like Applicant Tracking Systems and Recruiting Marketing Systems to recruit and screen talent. These systems often rely on signaling shortcuts like degrees as proxies to vet for hard and soft-skill requirements; and more often than not, they leave qualified applicants’ resumes on the cutting room floor.

Carolyn Pierce, a partner at McKinsey, whose group advises companies on how they can leverage IT tools to create a more skilled and diverse workforce, agrees. In a recent interview on the Today Show, she shared her experience running her own current team’s resumes through an automated screening process—no one made it through the system to a first-round interview. Automated systems’ bias and disqualification of candidates for employment gaps are common examples of the paper ceiling at work. 

Time to Tear the Paper Ceiling

The convergence of forces like growing worker power, disruptive talent shortages, and massive public investment in growing industries has quickly elevated the paper ceiling as an issue of the day. Our colleague, Opportunity@Work co-founder and CEO Byron Auguste, captures the broken state of our labor market succinctly when he states, “If a company doesn’t have a STARs talent strategy, then it only has half a talent strategy.” The math of the moment simply doesn’t add up unless the United States can unlock the full potential of each and every worker.

The good news is we’re taking action. In September 2022, the Ad Council, in partnership with Opportunity@Work and 50 companies and workforce organizations across industries, launched the Tear the Paper Ceiling PSA Campaign. The campaign, which has had over 2 billion impressions since its launch, aims to raise workers’ awareness of the value of their skills while helping employers understand the size and scope of the STARs talent pool. Media outlets like the Wall Street Journal and the New York Times’s editorial board have taken notice, and employers such as Accenture, Google, and IBM have joined the effort. 

Legal Levers for Change

Companies Re-evaluating Degree Requirements

As companies seek talented workers, the default of “bachelor degree required” is often included in job descriptions without hiring managers and recruiters understanding the impact it has on who can, and can’t, apply for a role. Almost three-quarters of job postings between 2007 and 2016 listed degree requirements, leaving the majority of American workers ineligible to apply.

Smart companies are re-evaluating which roles should indeed require a bachelor’s degree. Removing the all-too-common, degree screens for in-demand roles like customer service representative, office manager, data center administrator, and sales representative significantly opens up the available pool of talent. This strategy is also a legally sound policy. Creating pipelines of applicants whose skills match a role’s responsibilities in order to decrease turnover by preventing overqualification is an example of a method that has been litigated and established as legal precedent (Stein v. National City Bank, 942 F.2d 1062 (6th Cir. 1991)).

States Tearing the Paper Ceiling

Fourteen states including New Jersey, Pennsylvania, Colorado, Utah, North Carolina, Alaska, Virginia, South Dakota, and Ohio have followed Maryland’s lead to tear the paper ceiling in their state by removing degree requirements for state jobs. Both red and blue states see skills-based hiring as an issue worth tackling, and we’ve seen many state leaders take pride in setting an example for the private sector.

In April 2023, New Jersey Governor PhilMurphy and Utah Governor Spencer Cox penned a Dear Colleague letter to steer their fellow governors toward removing degree requirements for open roles within their governments: “Only 38% of Americans have a four-year degree. Requiring one makes sense for employment in some fields. But for others, a four-year degree is not the only way—or even the best way—to demonstrate competence. For too many job opportunities, a degree requirement represents a paper ceiling that overlooks qualified applicants.”

Algorithm Transparency Laws 

In recognition that the paper ceiling takes many forms, policymakers have taken action to protect American workers and level the playing field by proposing such laws as the Algorithmic Accountability Act of 2022, the first federal legislative effort to regulate the lawful and ethical implementation of artificial intelligence to remove biases that may disadvantage minority and marginalized communities. There is also the Chance to Compete Act, which looks to reform the “archaic process,” as described by Rep. Virginia Foxx (R-NC), used by the federal government to hire skills-based workers. Beyond the federal government, some cities and states have also decided to take action. For instance, New York City passed local law 144 in 2021 that seeks to regulate the use of Automated Employment Decision Tools (AEDTs).

Change Must Happen Now

Keith had the skills necessary to do the job, yet algorithms kept employers from seeing, and valuing, those skills. Meanwhile, IBM had a demand for network administrators but couldn’t find the talent. The paper ceiling impacts almost every employer and the majority of workers in the United States. It’s an insidious and invisible barrier felt in executive boardrooms and on community Main Streets across the country. Now is the time to tear the paper ceiling through both policy and practice. Let one loud rip reverberate across this land.