Wednesday, July 1, 2009

Ricci v. DeStefano

In the Supreme Court case Ricci v. DeStefano, the New Haven, Conn. fire department instituted a test to determine which firefighters would get promotions. After no black or Hispanic firefighters scored well enough to be eligible for promotions, the department, worried that they could be sued for racial discrimination, threw out the results of the test. Of course, now white firefighters sued them saying that they were being discriminated against, because the the decision to throw out the results was made based on racial factors. The Supreme Court just ruled in favor of the white firefighters.

This case brings up saveral interesting issues. One issue, of course, is whether standardized tests such as the one used in this case are a good way to select job candidates. My general opinion on this question is that although standardized tests are obviously not the solution in every case, they do tend to get an undeserved bad rap. Yes, standardized tests can be biased, and they are clearly an imperfect measure of qualifications. But the appropriate comparison is not with some perfect system, it's with whatever the alternative is. And there are plenty of common selection methods that produce far more inequality and discrimination than any test (and are just as questionable with regards to relevance) yet are rarely controversial. For example:

1. Many employers find new employees based on referrals from current employees - i.e. a current employee knows someone who would be a good fit for the company, and refers them. Of course, for most employers, the set of acquaintances of current employees is not even close to a representative sample of the entire population, and obviously there is no necessary correlation between being friends with a current employee and being qualified for the job. Even in the absence of a formal referral sytem, there are lots of jobs that are filled based on personal connections, and this critique could apply to all of them.

2. Many jobs require a college degree, and employers tend to value degrees from more prestigious schools more than degrees from less prestigious schools. Of course, whether you get a college degree (and where) depends on lots of factors, including where you grew up, whether your parents could afford to send you to college, etc., only some of which have relevance to whatever job you are applying for. And paying for college is a huge barrier for lower-income families. (One common critique of standardized tests like the SAT is that it favors people who can afford expensive test preparation. Which is a higher barrier: spending a few weeks and a few hundred dollars on a test preparation course, or spending four to six years and tens of thousands of dollars on a college education?)

In fact, it seems to me that standardized tests have the potential to mitigate some of these problems. A standardized test can be tailored to the requirements of a particular job, and it can be re-tested, adjusted, and fine-tuned to offer whatever balance is desired between racial balance, screening value, and any other relevant factors. In fact, by bypassing other "screening barriers" such as personal connections and subjective judgments, if a set of effective, general-purpose tests were to be developed, that would have the potential to go a long way toward mitigating racial and socioeconomic disparities.

Of course, this is not a panacea: not all jobs can be easily measured by a test. But for those that can be, it seems that designing an effective test is a much more tractable problem than say, equalizing access to elite schools or giving poor people opportunities to form personal connections with potential future employers.

But as for the Ricci v. DeStefano case, it's actually not clear what effect it will have on the use of testing. Superficially, the decision was in favor of testing (the decision effectively said that the test results should have been kept.) But what it also does is place employers who use tests in a catch-22 situation. If the test comes up with racially disparate results, they have no way to avoid a lawsuit - if they throw out the tests they will get sued by one side, if they keep them they will get sued by the other. So this might end up discouraging employers from using the tests.

(The court opinion said that throwing out the tests would have been okay if there were a "strong basis in evidence" that the city would in fact have been held liable, but that the city failed to meet this standard. But this still doesn't solve the problem - it essentially boils down to saying that an employer can be held liable for failing to be good enough at guessing how the courts will rule. And that's a hard thing to do - just look at how many 5-4 Supreme Court decisions there are.)

It's also still unclear exactly what employers are allowed to do. My understanding is that in this particular case the employer said "We'll be using this test to decide who gets promoted." Suppose that instead, the employer said "We're going to give you all this test, we haven't decided yet what we're going to do with the results." And then they had done the same thing as they did before. Would that have been okay? Or does the decision force employers to pre-commit as to what they are going to do with the test before they give it? If so, it seems like that might hinder development of more effective tests, because employers can't fine-tune the tests once they've been given out. (Although my understanding is that there are firms that do this test design, and they would pre-test the test on people outside the employer. So employers might use this method prior to giving it to their own employees or prospective employees.)

And finally, does the decision apply just to standardized tests, or to any method of avoiding racial discrimination? If the latter, then it seems that since any active attempt to avoid racial discrimination (e.g. against minorities) by definition implies trying to hire more minorities than otherwise, then it could be classified as "reverse discrimination" using exactly the same argument as the white firefighters made. And of course id they don't make that effort, then they're violating their duty to avoid discrimination against minorities. So how are employers possibly supposed to satisfy all their obligations under the law?