Progress: NYC Stands Up For Workers By Banning Credit Checks on Job Applicants

The New York City Council just passed an unprecedentedly broad bill banning the use of credit checks in hiring decisions, making it a little easier to get a job in a city of first impressions and cut-throat competition. Seventy-nine liberal groups and labor organizations banded together to get this bill passed, denouncing the credit checks as “an unjustified, discriminatory barrier to jobs, which disproportionately harm people of color”.

New York’s law is the strongest of its kind, joining ten states and the city of Chicago in banning the unfair practice, which helps perpetuate the cycle of poverty and debt. The lengthy unemployment and layoffs during the recession led to credit problems for millions of Americans, who now have no way to dig themselves out. John Dodds, head of the Philadelphia Unemployment Project and working for a similar bill in his city,  remarks that “It’s like a Catch-22…Your credit gets bad because you’re out of work.  And they won’t hire you because your credit is bad.  It just makes no sense.” In addition, it tends to hurt minority workers, who tend to fall victim to predatory lending agencies, and credit scores often aren’t entirely correct– a recent Federal Trade Commission report found 13% of credit reports had serious enough errors to alter the score.

Senator Elizabeth Warren (D-Mass), a longtime champion of consumer protections and workers rights, has proposed a similar bill in the Senate to ban the commonly used practice across the country. She argues that

“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities,” Warren said. “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness — let people compete on the merits, not on whether they already have enough money to pay all their bills.”

A 2012 survey by the Society for Human Resource Management found that forty-seven percent of employers run credit checks, for all types of jobs ranging from maintenance, driving deliveries, and selling frozen yogurt. Alfred Carpenter described in an interview with New Economy Project his difficulties in breaking the cycle:

“I started noticing, everywhere I went, I suddenly was not good enough to work there. Then I realized it was the bankruptcy. I went to [look for jobs at] all these nice stores where they loved me…. But the bankruptcy just killed me. I was on welfare for awhile—there’s no reason a guy like me should be on welfare, a strong, able guy who’s a very good worker—but basically it was a blacklist.”

It really says something about the way our society has been entirely dominated by wealth and the exclusion of the poor from gaining even a little sliver. The credit checks are essentially a form of wealth-discrimination that works to keep the people who need help the most from making any headway out of the recession-dug rut that Wall Street dug them, and New York City is blazing the way once again for a more progressive America.



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