The American Interest
Analysis by Walter Russell Mead & Staff
Ostrich Syndrome Yes, Academia, Winter Is Still Coming

Megan McArdle has an excellent essay up at Bloomberg about the sorry state of the job market for PhDs that’s very much worth your time. The crux of her argument:

The fundamental issue in the academic job market is not that administrators are cheap and greedy, or that adjuncts lack a union. It’s that there are many more people who want to be research professors than there are jobs for them. And since all those people have invested the better part of a decade in earning their job qualifications, they will hang around on the edges of academia rather than trying to start over. Such a gigantic glut of labor is bound to push down wages and working conditions.

The business model for PhDs is functionally off. Graduate schools are minting far more PhDs than the market can absorb.

The problem as we see it is that the post-World War 2 university system was built on the assumption of an ever expanding population of students needing more and more higher ed. Therefore there was a need for each generation to produce more professors than the last. (This is not all that dissimilar, by the way, to the way many pension systems and social programs like Medicaid were built on the assumption that a bigger generation would roll around to pay the bills for the current enrollees.)

For a long time, each generation did need more than the last. More professors were needed for rising enrollments, so more grad schools were needed—which also raised the demand for professors, because more professors were needed to train new professors.

As McArdle notes, add to that the fact that a lot of people would like to be research professors: no boring students, job security, lots of conferences, prestige, research! (This is what the profession looks like to 22 year olds who have spent all their lives in school environments and have been trained to see professors as authority figures and mentors.) Sprinkle in student loan programs, the natural ambition of colleges to become universities and small universities to become big ones, and there are a lot of forces pushing academia to expand. The result is one of the more cruel and exploitative workplaces in the United States today. While the lot of day laborers and poultry plant employees is worse still, they at least haven’t spent a decade of their lives preparing for jobs that they are then denied.

This system is now coming undone. There aren’t many jobs for entry level doctoral grads, and even fewer for tenure track. Oversupply pushes wages down and keeps desperate hangers-on thronging around looking for adjunct positions. Older professors who were once obliged to retire at 65 now keep teaching. The result is a huge jobs crush.

To resolve the oversupply, we’re going to have to close down many PhD-generating graduate programs and shrink most others. The result will be that demand for professors in the affected field will shrink even more. With fewer grad students to teach, most schools will not need the large tenured faculties they have today, and tenure positions will shrink more still. That in turn should lead to another round of grad school shrinking—even fewer openings as more universities cut department size to adjust to the shrinkage of grad school programs—until at some point the process reaches an equilibrium.

US schools could fight this process in several ways. They could continue to produce PhDs for export, so that foreign and US students educated in US grad programs can get tenure track jobs overseas. In some subjects, PhD programs can be overhauled to make the degree more attractive to employers: natural science and economics degrees, for example, could focus more on practicalities than on preparation for a life in the academy. The biggest opportunity could be the promotion of Master’s degrees, either for avocational students (the retiree who now has the chance to read great books, or who was always curious about astronomy but never really had the time to follow up), or to provide additional education that really helps people get better jobs because they can do more complex things.

Smart schools are already thinking about these things and making preparations for change.

Published on January 6, 2014 8:30 am
  • JoeP

    There may be another simpler solution for jobs in academia and government. Like in many other countries, there should be a mandatory retirement age of say 65. We have in the US a situation where entrenched personnel keep milking the system in jobs that have little accountability or dire consequences till they drop dead. It’s all part of the culture of looting the public trough.

    • Kavanna

      Many places have had mandatory retirement at 65. But thanks to the Fed and its backdoor zero-rate propping up of the financial sector (another locus of bloat), no one can live on their retirement savings. So would-be retirees have to work longer. The labor participation statistics show the devastating story: labor force participation is RISING for workers over 55, while it’s FALLING sharply for workers under 35. It’s an upside-down world.

    • Clover_Annie

      Actually, a better idea would be to get rid of the “retire at 65″ model and stop basing job market expectations on the idea that so many jobs will automatically turn over ever year, especially for jobs that require a great deal of training or education. People are now living longer, and the longer they live after retirement, the more government benefits they’ll need to use in place of making their own money. In addition, if someone does truly get a useful PhD, they may not start working full-time until their 30′s, which means 10 fewer years to build their career and a nest egg than someone who started right out of college when they were 21. Finally, many academic careers, and others that require intense education, are ones in which the older crowd is the wiser crowd. Sure, there will be some government and academic jobs in which workers above a certain age should or could be phased out. But if it’s a field in which If you’re still productive, still engaged, and are able to mentor younger workers, mandatory retirement is not only counter-productive but cruel.

  • Anthony

    There is nothing wrong with the basic idea of the Ph.D but it is no longer indicative of a true scholarly interest. McArdle’s article brings to mind that most conspicuously aspiring Ph.D’s are both expectant academic job seekers and expectant academic administrators; however, many are encountering shift in model viability and consequent imponderables…

  • qet

    The conditions cited by McArdle are not mutually exclusive. A glut of PhD candidates can coexist in a world of greedy administrators. “Greed” may not be the best charge to make, as it is a sin, implies moral failing and ultimately is a proposition about a person’s intention which cannot be known by another. Let us say instead that the world of American colleges and universities has evolved along the lines suggested by Max Weber, and rationalization has favored the bureaucratic imperative, the aggrandizement and mitosis of bureaucratic cells into ever more bureaucratic cells which must themselves consume resources in order to survive. Perhaps analogies to metastatic cancers are equally inappropriate. I am unsure.

    • Anthony

      German university system, i.e. Max Weber, model initiated to induce criterion for professor/teacher qualifications (doing good is a complicated business) which at some level has metastasized obsessively.

      • Kavanna

        Yes. Administrators may be greedy — or appear so to others. But the reality is that they run an unimaginably bloated system, including bloat from too many administrators (!) and the excess commitments they have put into place.

        • Anthony

          Agreed.

    • larryj8

      How many of those “diversity” administrative positions in academia and government were established to create jobs for otherwise unemployable “angry studies” graduates? I suspect more than a few.

  • Pat

    Perhaps the callow comments on pensions might be correct, but those who agreed to employment conditions based on their inclusion as a part of their future security have been badly let down for what passes for justice in today’s America. It is perfectly fair to cease these schemes, but patently unfair to cheat on them, especially considering the wealth available to the elite’s portfolios.

    • LivingRock

      While I agree the pension beneficiaries face a certain injustice as a portion of their previously agreed upon financial security maybe less secure b/c of over-promises and poor management, the flip side to that is sacrifices made by those who face dwindling services in order to pay for said pension deals.

      • Kavanna

        Well said. A lot of American politics today — especially the eagerness of Boomers in late middle age or retirement for Obama et al. — grows from a craving to keep the welfare state gravy train going. Anyone under 50 who supports “progressivism,” or whatever you want to call it, is in for the rudest shock imaginable when they awaken from their trance. Even worse off will be the benighted Millennials who support this kind of politics. A lifetime of genteel poverty — complete with overpriced educational credentials and unpayable student loans — awaits them.

      • Pat

        I couldn’t agree more that the burden of unrealistic pensions should not be borne by those who had no part in negotiating them, but the burden should be borne by those responsible. A contract should also not be modified as a device to gain profits for those who exploit debts and bankruptcies as a business.If we allow the termination of pension plans as routine, what’s next? Property Rights? The abuses of eminent domain are only too well documented. When or if a business becomes profitable once again, their prior contractual obligations to employees, vendors, and the state should be honored.

      • larryj8

        Pensions were great when profits were high and employees stayed with the same employer for decades. Today, most employees (other than government employees) will change jobs several times over their career. A 401K style retirement is a better option for them.
        We’re facing a situation where pensioners (especially government retirees) who’d willingly force others to eat dog food in retirement so they can maintain their lavish public pensions. I expect a great deal of pushback from voters who had no say in those pension promises and who’re living on minimal returns on whatever retirement savings they may have due to ultra low interest rates. While low interest rates are great for those with a lot of debt, especially the government, they’re very hard on those trying to survive on their savings.

  • Kavanna

    Unless you’re going to do research, there’s no reason to get a PhD — it’s a research degree. You certainly don’t need one to teach, and it’s actually a negative in some ways. To demonstrate mastery of a subject, a masters degree with thesis is all that’s necessary.

    The main places people do research for its own sake is in academia. There’s a little in the private sector as well, but not a lot. That means PhD-generating programs will have to shrink in size and number, simple as that.

    The glut Megan writes about is not at all new. It started in the 1970s. But universities got away with it for so long because the economy in the US was generally doing well — providing an “out” for students unable to get a permanent academic job — and students from other countries could go back. The final wave of Boomer and GenX students in the 80s and 90s kept the system intact. But the Millennials who started graduating around the time of the 2008 recession face a very different world.

  • Jim__L

    Look, I’m the first guy to poke fun at PhD’s at my work who insist on being called “doctor”, and I understand completely the reluctance of managers to take on unworldly prima donnas. I’ve worked with both the good (who can be very, very good) and the bad (who aren’t any worse than their uncredentialed brethren, aside from either a tragic wasted-potential theme, or an irritating entitlement mentality.)

    Does no one look at these researchers with an eye to the possibilities of the applications of their research? Is it really naivete to look at all that potential, and imagine all the startups or IRADs that these guys have already halfway worked out?

    What we need is more partnership programs between B-schools and Sci / Eng PhD programs, to match technical talent to entrepreneurial talent. If a university can manage to hold onto enough research money to allow a bright person to work on a project that has high risks of not being meaningful to a company’s next-quarter bottom line, but has high potential of opening the door to a multitude of new applications down the line, more power to them!

    On the other hand, as far as non-technical subjects go: Yeah, they’re pretty much headed for the chopping block, and not before time. If it’s not useful to teach Western Civ — a collection of the most valuable cultural assets humanity has ever assembled — then there really isn’t any point to the Humanities.

  • Jacksonian_Libertarian

    The fact is that smart highly educated people will find their own way without any help. It’s the stupid poorly educated people that need a thriving economy to make their way, that Obama’s expensive Government is crushing the most.

    • robin hood in reverse

      Thanks to the vulgar stupidity of intellectuals, I’m an economic pig headed despot (PHD) on a Jeffersonian rampage. Hopefully my argument will help you make yours.

      Second place is the first place loser but a peek is worth ten free market estimators. Reverse auction bid results can be turned into a low bid equation with a variance that looks something like this:

      Low Bid = (95% – 1% times the number of bidders) times the average bid

      Companies play free market basketball on a diving board because a company can’t maximize their profits if the company hits more often than the dummy. A 5% drop in price is usually enough to jump to 15% higher overall hit rate. Government is a slam dunking monopoly that has proven to be 20% more expense than the free market. Socialism, Fascism, Marxism, Statism, etc. is four scarcity leaps backwards and corresponds with Carman’s and Kenneth’s findings.

      A Harvard Professor and previous President of IMF wrote a book called “This Time is Different” . Carman Reinhart and Kenneth Rogoff studied fiscal crisis in 65 countries over 500 years. 1% GDP reduction in taxes increases private sector 3% in GDP. 1% GDP increase in Government Spending deceases private sector 1.2% GDP with a -0.2% change in GDP. Obviously a great deal of government debt can put a country at significant interest rate risk.

      If we go from a 38% tax rate to 20% tax rate with a balanced budget the private sector will grow from $11 Trillion to over $16 Trillion. Tax revenue won’t decrease 48%. Tax revenue will only decrease 24%. Half of Washington won’t have to go on a permanent vacation, only one out of four. Employment will increase 25% so displaced bureaucrats will have lots of new opportunities to contribute to society.

      If we get down to a balanced 10%, $20 Trillion – more than a 60% increase in jobs if half of Washington goes on a permanent vacation, each dollar earned buys ($0.90/$0.62) 45% more, and hard America becomes a soft warm place.

      John Nash’s beautiful mind recognized the importance of interactions in which the results of one person’s choices depend not only on his own behavior but also on the choices of another person. There is a related game called Ultimatum. You and your partner split $10. Less than $3 deals disgust and anger. The dealer has a pulpit.

      The Laffer effect is no joke. Charles Adams, an international tax attorney and historian, wrote books on taxes. Once tax rates rise above the disgust and anger point, the expected extra tax revenue never shows up. A flat tax system is part of Constitution. Everyone has to pay taxes to keep as many people’s tax rate below the disgust and anger tax rate or make sure an overwhelming majority is disgusted with high taxes.

      Carman, Kenneth, John, and yours truly believes dealers can routinely get an $8 to $10 deal by getting his or her partner work for a $3 to $5 deal. With each $3 to $5 of earned success the partner becomes a dealer that turns the $3 to $5 deal into $6 to $8 of earned success. Turning $10 into $13 is a win-win systemic solution that creates good people, great outcomes, and durable trust but when it rains, rainmakers show up and turn everything to dirt.

      There will always be zero-sum losers who just accept less than $3 deals and think the key to success is being an abusive dealer. A $7-$3 deal isn’t better than a $6-$4 deal because $7-$3 deals turn into $6-$2, $5-$1, and $4-two bit deals. Rainmakers turn everything to dirt because they feel entitled to $7up and someone else has to pay for the diet $7up.

      Obama and company’s overall 30% to 40% tax and spend policies have systemically increased the public sector by 25% and eliminated 10 million private sector jobs. For the first 150 years of our existence, we were 10% tax and spend country. Present day Switzerland, Russia, and much of Eastern Europe are 15% tax and spend countries.

      I can’t taste the difference between Wilson and Barack vegetable oil. The Federal Reserve was created on Jekyll Island and Obama is the Prince of Hyde Park. A famous Central Banker said something like “If I control the money supply, I care not for your laws”. If debt is money that can only be paid off with more money …. someone ends up owning everything and everybody.

      Our founding fathers promoted the species (Gold and Silver) because a stable money supply is key to creating an innovative middle class and responsive Government. When things are set up right, the wealth disparity between rich and poor is only four fold and a society’s standard of living doubles every decade but there is a great deal of guess work involved. Government being around 45% of GDP appears to be the little or no innovation setpoint.

      With some modifications, Bitcoins can indirectly tax on transaction size (good), proactively tariff (good), turn the down and out into limited central banks (good) and tax on population density (good) and be like an invading army. Bitcoins, that don’t vary in quantity could be the beginning of a wonderful bottom up Milton Friedman world that leaves the elites on top without any change.

      The 10% public sector corresponds to a bottom 20% to top 20% ideal distribution is around $3.50,$4.50,$6.25,$8.25, and $11.25.

      We went off the gold standard 40 years ago. Over that period the average overall tax rate was about 30%. Over the last 40 years relative wealth distribution went from ($2.75,$4.00,$5.25,$7.00,$9.25) to ($1.25,$2.00,$2.75,$3.50, & $18.50). 30% to 40% Obama has taken us to ($1.00,$1.75,$2.50, $3.25, and $16.75). If the dollar is no longer the world currency, ($0.75,$1.31,$1.87,$2.41,$12.19). The above mentioned Bitcoin arrangement would lessen the wealth disparity.

      With some modifications, Bitcoins can indirectly tax on transaction size. After the transaction gets above $700,000 or so the taxes get much higher.

      Bitcoins could proactively tariff. If a 40% nation trades with a 10% nation, the relative tax is 25%. 80% of the tax proceeds go to the 10% and 20% of the proceeds go to the 40% nation thus creating better and better governance.

      Without government or coin clipping distortion, free markets naturally consolidate wealth in larger and larger metropolitan areas around about 0.7% compounding interest. Second place is the first place loser but a peek is worth ten estimators. A 5% to 10% tax difference between low and high population density areas is enough to leap past the first place loser. Over time all the metropolitan or region areas will become about the same size and thus less of a threat to the ruling elite.

      The 10% poor are 3 to seven times better over than the 40% poor. Bitcoins could also turn the down and out into limited individual bottom up central bankers.

      The elite Architects of the bitcoin ponzi scheme can be compensated for creating good governance. If they create a 10% world they get to make $22.50. If we the people create a 40% world, the elite get $16.50.

  • Jane the Actuary

    Actually, I asked a friend of mine who teaches English, and she was adament that she and her colleagues try to ensure that current and prospective graduate students know what they’re up against. Is she doing enough and is she really representative of her colleagues? I don’t know. I suppose anyone that’s in Chicago right now can hang around at the MLA conference, accost random English professors and see what they have to say.

    http://janetheactuary.blogspot.com/2014/01/from-facebook-on-grad-school.html