Job Seekers, Credit Reports and Employers: Talk About Zero Correlation

Job Seekers, Credit Reports and Employers: Talk About Zero Correlation
M.D. Wright

As some of you may be aware, New Yorkers testified at a New York City hearing on Employment Credit Checks, seeking to have Intro. 857:, the Stop Credit Discrimination in Employment Act, which would ban credit checks by employers in NYC. This is only the first of many steps that must be taken in order to begin to bring this disgusting practice to an end. Worse yet, Mayor Mike Bloomberg is IN FAVOR of companies being able to continue this practice, defending companies by saying, “You must be able to look into a person’s history […]”

First of all, this is obviously true. You do not hire someone willy-nilly without looking at their academic and professional background, unless you are engaging in Good Ol’ Boy tactics and/or nepotism. But to advocate using credit scores in the process is ridiculous. Bloomberg knows it, and companies who engage in this practice (whether they admit it or not, some do it and lie, saying that they do not) know that it is farcical at best.

Naturally, there have been studies conducted to seek out a potential causal link between credit scores and ability to obtain, maintain and succeed in the workplace. Of these studies, virtually none of them show any link between one’s credit score and a predictor of success on a job. Any logical person knows that there are too many variables in play in today’s economic climate — indeed, now more than ever — to fall victim of the irresponsibility of drawing a correlation between credit scores and job success/employee acumen. There was once a time that you could say that 90% of people who had credit scores lower than 600 were either young people (i.e. high school and college students with no credit history) or someone who was willfully and repeatedly delinquent on paying bills and creditors. Once upon a time, this was the understanding; an unwritten rule of sorts.

However, no one in this world has been immune (in some form or fashion) to the effects of the Great Depression 2.0. If you did not lose your job between 2008-2011 (if not lose multiple jobs afterward), you know someone who has. If you lost your job and found another, often times, it was paying much less than the previous, without raises in years since. Others have flat out been unable to find anything other than small-time temporary placement work, side work or be relegated to jobs that do not promote a liveable wage. Worse yet, what few jobs that the Obama Administration brags about creating are paying on par with what jobs paid in 2002. I would be looking to hide that information, rather than touting it as some major job creation campaign. Minimum wage in 2013 should not be a few mere cents above what it was 25 years ago, yet, this is the case. Most of these jobs “created” by the Obama Administration barely pay above minimum wage. It has been a very long time when anyone has been able to support themselves (much less a spouse and children) on such a wage in New York City. Not in my lifetime (1979 – present), for instance. You certainly cannot expect to do so, without having to live eight to an apartment like tourists in hostels. Minimum wage in New York City should be $40,000. Seriously.

Even outside of New York City, the cost of living and inflation indices have skyrocketed in the past decade, while wages have largely remained the same (and dipped, in New York City, in the past seven years). Never mind bonuses and raises. This is not just a New York City problem, because companies everywhere engage in this practice. The excuse that, “Well, this is the financial sector (or federal/intelligence-related), so you have to understand,” does not fly. Employers are engaging in this practice in basic jobs that have zero contact with sensitive, confidential information or financial products, so that lie does not work.

The bottom line concern here (and for those who say, “Race and color should not matter, why can’t we just bury this?” SADDOWN, SHADDAP, AND LISTEN) is that longtime stereotypes are perpetuated and put into action with this practice. It is not possible to completely prove that it is intentionally done in this manner, but the disparity in income, housing options, insurance, borrowing/lending options, are all areas where Blacks and Latinos are disparately affected. This does not suggest that “all” Blacks and Latinos mismanage their income, engage in borrowing loans and credit at usurious rates and are deadbeats (in fact, credit delinquency is often a byproduct of predatory lending and disparate levels of income far more than it is a result of willful and wanton abuse of credit). What this does suggest prove is that companies know that this is a way to systematically discriminate against “undesirable” employees (read: non-token “minorities”) without a paper trail or verbal recording that can be admissible in court. Businesses don’t reach Fortune 500 level without knowledge of the law and the loopholes therein. Don’t discount how shady employers can be regardless of whether or not they admit that they use credit scores to discriminate against people who are still unemployed at an alarmingly higher rate than their White and female counterparts (Black women have not been as negatively affected in this way as much as “minority” men of all ethnicities have been affected; Black women and women in general are viewed as less “threatening” than educated men of any non-White ethnicity).

Despite the longtime stereotypes about race and credit/credit scores, today is definitely not the time to paint everyone with sub-700 credit scores with a broad brush. Things happen in life. One visit to the emergency room or an unexpected, extended hospital stay will land you in debt beyond one year’s pre-tax earnings for some people. Insurance is already vastly unaffordable (regardless of what Obama and his supporters claim), and has been for a few decades, so a number of people are falling behind on healthcare-related bills alone. Never mind how many people went at least 18 months without regular income, and had lines of credit into the six figures, business debts and losses, along with the basics, which became a challenge to pay for many, whereas they were virtually givens, with a thousand dollars (or tens of thousand, depending on which income bracket you fell from when you lost your income during the Depression) left over each month for savings and emergency funds. All of that was wiped out in many peoples’ cases. Some went onto unemployment and exhausted those benefits, then went onto other New York State (or insert your state here) programs to remain afloat. Survival mentality means ensuring that you have a place to live and food to eat. Almost everything else (including paying debts) is secondary. This happened for many people; especially those who once had 800+ credit scores, and lost it all, without a chance to rebuild their economic situations.

Being discriminated on the basis of credit score (and the real underlining purpose for discriminating in this way, as mentioned above) only further perpetuates stereotypes, and pushes more people into financial ruin, with no means to secure the income (forget starting a business when you have to decide between rent, food and bare necessities, and the costs associated with starting a business venture) to recover.

If you are unsure how this is affecting “minorities” in New York City (and many others nationwide, but specifically in this case), just look at your circle of friends and social network. It is pretty certain that for every five, two are unemployed, and one of them has been unemployed for well over a  year — despite possessing two or more degress and/or at least five years of professional experience under their belts.

You may be that one. Vote while you have a voice, and get those out of office who advocate this method of racial discrimination.

Catch 22 I


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