There was a great deal of back-and-forth in the left half of the blogosphere this weekend over employers who use FICO scores as a way of weeding out job candidates. In a sort of peculiarly American fashion, our nation seems to have decided that one's credit history is a good proxy for one's worth as a human being, and thus should be used to determine eligibility for everything from employment to excellent rates on car insurance.
I have no trouble believing that the FICO score is often a proxy for what some researchers call conscientiousness; I've certainly had roommates and others around me who had terrible credit because, well, they didn't bother to pay their bills, and regarded rent as something optional that could be turned in if no more exciting commercial opportunities immediately presented themselves.
That said, it's going to be at best a weak proxy. It's also a proxy for things that, as a society, we may not want employers to consider, like a past history of depression. And for things that have nothing to do with your job performance, like a car accident that left you with huge medical bills and no job, or a sudden job loss. Looking at our national savings rate, lots and lots of Americans live very close to the edge of their paychecks; they can't all be terrible employees.
I have never really even considered asking employees for their FICO score, in part because all small business people hate these scores as, even with perfect credit records, our scores tend to be smaller than people with similar income and history due to the constant credit checks made on us by vendors and other partners.
That being said, as someone who has 500 service employees working for me, I understand the insatiable desire for information on employee reliability and conscientiousness. A large number of our employees we hire who interview well tend to get released within 60 days of their hire. I can't tell you how many people who seem totally normal and friendly turn out to be raving maniacs in stressful customer contact situations.
The elephant in the room that neither McArdle or folks like Kevin Drum mention is that businesses are starved for reliability information on potential employees. It used to be the best source was to check job references. Nowadays, though, very few employers will give a honest job reference, or will provide any information at all. I know I am guilty of that -- my company does not allow any manager to give out performance data on past employees. I only needed to be sued once over somehow interfering with someone's living by giving honest information about that employee's reliability to change my behavior.
I understand that this is exactly what the Left is shooting for - an environment where the competent have no advantage over the incompetent. If employers are resorting to FICO scores, it just demonstrates how all the other reasonable avenues of obtaining information have been closed to them.
The only saving grace in this country is that employment is still mostly at-will, meaning we can fire our hiring mistakes and move on. Of course the Left wants a European-style system where it is impossible to fire anyone too -- this is the system the post office has, and one can see how well it works out. If they are victorious on this final front, I will be forced into a game of Russian Roulette, where I can't find out anything about those I hire, I can't fire the incompetent people I do hire, and I am infinitely legally liable for any mistakes any of these employees make.