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I think a lot of things can be "on the job" . You caught me off guard with an extreme example.
I was more or less talking about most of the other subjects people study in American College. For most subjects, testing is just written test, or classroom lab (not something that will blow up whole building kind of deal). If you are employer seeking individual workers, you can just test them yourself. That will be the screening.
Alot of things can and should be on the job, but they require varying degrees (pun intended) of in-classroom academic learning. A mechanic might learn most of his trade via hands on work- but if he can't spell the parts he needs or manage basic costs and budgets then its going to suck.
You could be highly knowledgeable at historical events or an excellent writer- but the employer wants proof of this. And since employers don't have time to typically ask 1000 questions it is up to the 'symbol' of a degree or course completion to prove a persons skills.
A degree shows the MINIMUM that a person is capable of, without which it is extremely hard to prove. Some fields such as animation they simply make a 60 second portfolio of a video clip, that 60 seconds tells potential employers everything that person is capable of in the art world. You cannot do that for the majority of other jobs.