Close the New Debtors’ Prison: Credit Checks for Job Applicants

A March 1st news report from the Associated Press, presented on Yahoo! News, states that at least 16 U.S. state legislatures are considering measures to outlaw credit checks on job applicants. The report states that, in a recent survey, 60% of employers said that they run credit checks on at least some job applicants, although only 19% said they do so on all.

Here is a news flash to the employers of America: we are in a Recession/Depression, people. (That’s a Recession so bad that it is essentially a Depression, but we are all too scared to call it that.) Enormous numbers of people have bad credit today for reasons that have very little to do with anything they have done. By refusing these people jobs on the basis of credit checks, employers are dooming these people to a continuing spiral of unemployment or underemployment, and deepening poverty. Metaphorically, it is like a new form of debtors’ prison, where people in debt are incarcerated and unable to earn—a practice that impoverished entire families until the practice was mostly eliminated in the United States about 170 years ago.

The justification for credit checks for employment, as one employer quoted in the story put it, is that “if your credit is bad, then you’ll steal from me.” Frankly, speaking as a researcher, I would love to see the research that supports that statement. This strikes me as the sort of naïve pseudo-psychological reasoning that would never hold up in court. I wait for the day when some employer is forced to prove that notion in court; I shall be delighted to testify for the plaintiff. I know too many good, honest people forced into bankruptcy by extraordinary medical bills, business downturns, and so forth, to put any faith in this employer’s statement.

Regardless of whatever sense that sort of reasoning makes in normal times, it certainly makes no sense now, when the official (and highly understated) unemployment rate is about 10%. Sure, there are some jobs—I’m thinking Treasurer—where direct contact with large amounts of cash and corporate checking accounts does justify a credit check. However, outside of such positions, the practice of conducting a credit check for employment is not only unjustified, but downright cruel.

I urge the readers of this blog to do two things. (1) Send this post to others who you think ought to be informed about this issue; you can use the “envelope icon” below to send a link to a contact via e-mail. (2) Contact your state legislators. If your legislators are considering legislation to outlaw credit checks for job applicants, then tell them you support that legislation. If your legislators are not considering such legislation—then ask them why not!

Legislation to outlaw credit checks for the vast majority of job applicants is definitely On The Mark.


[The photo of the credit card has been placed in the public domain by its creator; the image was obtained through Wikipedia.]

(Copyright 2010 Mark E. Koltko-Rivera. All Rights Reserved.)