Wednesday, August 18, 2010

Check this out: The Zeitgeist

Tuesday, July 20, 2010

Is rejecting a job applicant based on a credit score discrimination? 
 

Credit Slips says yes.
From the New York Times, Another Hurdle for the Jobless: Credit Inquiries: More than 40 percent of employers use credit checks at least sometimes, according to a 2004 survey by the Society for Human Resource Management, up from 25 percent in 1998. And the assumption from employers: Business executives say that they have an obligation to be diligent and to protect themselves from employees who may be unreliable, unwise or too susceptible to temptation to steal, and that credit checks are a help.
From Credit Slips: Based on some of the employers' comments in the article, there seems to be a widespread belief that a tarnished credit report necessarily results from bad decision making and that it is evidence that an employee is unreliable, unwise or too susceptible to temptation to steal.
Where the heck is the evidence for these assumptions? Just because someone has a low credit score or has filed for bankruptcy does not make him or her a shady untrustworthy character. It's much more likely that the person has experienced a job loss, medical expenses, break up of a family, over-the-top credit card fees and interest, or an attempt to avoid home foreclosure. A quick read of the bankruptcy literature will show that.
A couple years ago (2007), I published an article in Journal of Poverty using the CBP data describing the ways in which a bankruptcy on the credit report undermines the fresh start ("Personal Bankruptcy and the Credit Report: Conflicting Mechanisms of Social Mobility"). Over half of the respondents reported that they had been denied housing, transportation, credit, or employment explicitly because of the bankruptcy on their credit report. Respondents were denied jobs in accounting, mortgage lending, and even the moving and packing industry. Others were fired when their employers learned of the bankruptcy: one worked for the Traffic Safety Administration, one as a construction worker, and another as a clerk.
I know that some people are arguing that if the job is not tied to money and finances, the information in the credit report should not be used in hiring decisions. For example, in Hawaii, it is now apparently illegal to pull the credit report until after the job offer has been made, and then the credit check has to be directly related to the job qualifications. I would push further--even if the job has to do with money, the credit report should have no bearing. The fact is, just because someone's credit report is blemished does not mean they can't handle or be trusted with money.


I agree. How stupid is that to deny someone a job or claim they are not trust worthy because they got into some financial trouble?
My understanding of security clearances is they will reject someone out of hand for a bad credit score, especially a bankruptcy. Pretty absurd when one sees the various headlines of pedophiles with top security clearances, industrial espionage going on....but lord help you if you defaulted on a credit card?
Well, we know ~50% bankruptcies are caused by medical bills. There can also be simply losing your job in an expensive area and be left holding the bag. Don't forget default credit card rates of 24%, 29%, 32% when one misses a payment. Then there are other stories of a nasty divorce where one runs up the credit cards, people plain getting ripped off by others and then cannot pay their own bills...the list goes on and on, which is why bankruptcy is a civil court issue. It is not a crime to need to declare bankruptcy...(yet).
But in all seriousness, if a credit report shows someone is having money problems, uh, isn't that the reason they are applying for a job in the first place? They need a paycheck?
Another area which is dubious for use of a credit score is buying auto insurance and other insurance. What does driving a car have to do with one's ability to pay off Mastercard, Visa and Discover?
My theory is the big three credit scoring agencies, just want to increase market share, force more purchase of their products. In all seriousness, where are the independent studies correlating with out a doubt if one goes under and is foreclosed on, magically that person can no longer handle being a shipping clerk?
What does this have to do with job performance?
More this latest rejection tactic is yet another example of bad statistics, bad math and beyond belief bad hiring practices used in this country. Denying people a job based on credit scores is decreasing social mobility and opportunity in this country. It is probably age discrimination as well. What is the probability of bankruptcy as one ages and life happens, vs. when one is young and there hasn't been enough time for bad stuff to happen?
Can you imagine trying to rebuild your life under these circumstances?

Friday, July 9, 2010

The Yiddish policemans union

The Yiddish Policemen's Union: A Novel (P.S.)

Joel and Ethan Coen will direct The Yiddish Policemans Union adapted from Michael Chabons Pulitzer Prize-winning novel. In an alternate universe, Jews were allowed to settle in Sitka, Alaska, thus altering the course of world events. A major plot point involves the U.S. government handing Sitka back to the Alaskans.
Available from Amazon for a mere $1.68 in paperback. Click the link above  and check order status. " You will not put this book down".