The Ph.D. Glut Revisited
by Gary North
The economist rarely uses the words “glut” and “shortage” without adding: at
some price. Other scholars are not equally wise. A free market theory of pricing
rests on the supposition that gluts and shortages are temporary phenomena. Prices
adjust so as to clear a market. If this does not take place, the free market economist goes looking for evidence of state intervention. Consider the problem of
excess inventory. It is better to get something for unused and unwanted inventory than to pay for storage. So, selling prices adjust downward. This eventually
eliminates the glut. The unpleasant experience also warns the producer not to do
this again.
Why does a glut exist? Because of an error in prior forecasting. Suppliers
believed that there would be buyers at a specific price. It turned out that there
was an insufficient number of buyers at that expected price.
Then why does a glut persist? One answer: ignorance on the part of suppliers.
But why should this ignorance persist? Why don’t suppliers get the picture?
Experienced sellers do get the picture. The problem is a continuing supply of
new sellers who are unfamiliar with the market and ignorant of the past supply-
demand conditions. Or, as has been said so often, there’s a sucker born every
minute. There is no evidence that P. T. Barnum ever said this, but it is nonetheless true.
In the worldwide suckers’ market, gamblers are the only people who are slower
to learn than young adults with masters’ degrees. Bright graduate students possess a pair of non-marketable skills: the ability to write term papers and the
ability to take academic exams. They are also economic illiterates and incurably
naïve. So, they become the trusting victims of the professorial class.
THE ECONOMICS OF THE PROFESSORATE
No one ever sits down and tells a newly minted college graduate about the
economics of the professorate. No one tells the student about the crucial and
neglected work of the person who first blew the whistle on the economics of the
Ph.D., David W. Breneman. He is the Dean of the Curry School
of Education at the University of Virginia. He wrote his Ph.D.
dissertation on the economics of the Ph.D. It was accepted in
1970 by the University of California, Berkeley. It was based on
research completed in 1968, the year prior to the beginning of
the Ph.D. glut. Its title: “The Ph.D. Production Process: A Study
of Departmental Behavior.” Of all Ph.D. dissertations ever written, this is the only one that one that should be read by every
college student who is contemplating graduate school. Of course,
no one tells him. Few people have ever heard of it.
I read it in 1970. I do not recall how I came across it. I was
completing my Ph.D., so I was facing the Ph.D. glut personally,
which had begun in the fall of 1969. It had been predicted for
the sciences by Allan Cartter of New York University in 1964.
Sometime around 1966, Clark Kerr, President of the University
of California, had mentioned this looming problem to a group
of us in an elite student organization called the California Club.
But I was naive. I figured, “It won’t happen to me.” Ha!
As they say in those late-night Ronco ads, “Here’s how it
works!” Academic departments grow in terms of the number of
students enrolled. We know from Parkinson’s Law that growth
is an institutional imperative. Administrators advance their careers by expanding the number of subordinates in their department. So, every academic department wants more students –
students of a special kind.
Students are not of equal value to a department. The lower-
division student (freshman or sophomore) does not rate highly
in the currency of academic resource allocation: the full-time
enrollment, or FTE. The FTE figure is what justifies the hiring
of a full-time faculty member. The lower the ratio, the better. It
may take 15 lower-division students to generate one FTE. It may
take only eight Ph.D.-level graduate students to generate an FTE.
The more Ph.D. students a department can attract, the faster
the growth of that department. This is the iron law of academia.
All other economic laws are sacrificed for it, as the economist
says, other things being equal.
This fact of academic economic life creates an incentive for
departments to enroll lots of graduate students. It also rewards
those departments that persuade M.A. students to go into the
Ph.D. program.
Also, the brightest graduate students may be asked to do unpaid or grant-paid research for senior professors. The professors then publish the results of this research under their own
names, thereby advancing their careers. It’s the division of labor at work.
“GLUT? WHAT GLUT?”
The Ph.D. glut has existed ever since the fall of 1969. The
number of entry-level full-time professorial positions has remained stagnant. Few new universities have been constructed.
Legislatures have resisted additional funding.
This has led to a reduction of the number of tenure-level positions. Universities and community colleges have been able to
staff their entry-level positions with inexpensive instructors.
Those few Ph.D.s who receive a full-time position at a university find that they are paid much less than tenured members
of the department. They are assigned the lower-division classes,
which are large – sometimes 200 to 1,000 students. These mega-classes require lecturing skills that most professors do not possess. Those untenured faculty members who perform well in
mega-classes are kept on until the day of reckoning: the decision to grant them tenure, usually eight years after they go on
the payroll. They are usually not re-hired unless they have published narrowly focused articles in professional journals. But
mega-class professors do not have much time to do the required
research.
The assistant professor is now 35 years old or older. He has
not made the cut. He is now relegated to the academic underworld: the community colleges. But here there is fierce competition. Community colleges hire part-time instructors at $10 to
$15 an hour. These people seek a full-time position at the community college. They need that initial foot in the door: night
school courses for worn-out adults who are trying to earn an
A.A. degree. Their natural enemies are the newly dismissed assistant professors from universities.
Who gets an entry-level position at Boonsdocksville State
University, which in 1960 was a public schools teacher training
college? New graduates with Ph.D.s from the two-dozen major
universities.
Then what happens to graduates with Ph.D.s issued by
Boonsdocksville State? They go straight into the community
college circuit.
This has been going on ever since the fall of 1969. It is great
for community college administrators, who have a never-ending supply of optimistic Ph.D.-holding graduates of all but the
top two-dozen universities, plus a never-ending supply of burned out, terrified assistant professors from top universities who did
not receive tenure.
If you want to understand this process, watch Ghostbusters:
the scene after the parapsychology team has been dismissed from
the university. Dan Ackroyd speaks for tens of thousands of
Ph.D.-holding rejects who did not make the cut.
For over three decades, all it has taken to generate 1,000 applicants was this ad in a professional journal in the humanities:
Tenure-track position
Ph.D. required
Teach 12 hours of the freshman course
The salary has been almost irrelevant: not more than the average salary of the average American worker with a high school
diploma.
If the ad said “Ph.D. or ABD required,” it would generate
2,000 applicants. ABD stands for “all but dissertation.”
Graduate students do not learn about supply and demand, and
it does not pay senior professors to teach them. Here is evidence.
In response to the ever-growing glut of Ph.D.’s, the American
university system turned out about 30,000 Ph.D. graduates per
year, 1969 to about 1975. Since then, it has increased the output.
In 1980, it was 33,615. In 1990, it was 38,371. In 2000, it was
44,808. In 2003, it was 46,024. (Statistical Abstract of the United
States, 2006, Table 290.)
The Bureau of Labor Statistics currently predicts that the job
outlook for postsecondary teachers (a job commonly sought by
Ph.D. graduates) should be much brighter than it has been in
recent years. Employment in that area is expected to grow by
almost 40 percent by 2012, whereas overall employment is expected to grow by only 15 percent! So, if you’re just starting
down the track to a Ph.D. and hope to take root in the world of
academia, your timing may be just right!
There’s one born every minute . . . and two who will relieve
him of his funds.
STATE SUBSIDIES
Most degree-granting universities are funded by taxpayers. A
university used to be an institution of higher learning that was
authorized by a college-accrediting agency to grant the Ph.D.
Employees of all but the most prestigious four-year colleges want
to be called a university. So, title inflation has matched degree
inflation and grade inflation over the last 35 years.
The supply of college graduates with ever-lower academic
abilities is funded by money coerced from taxpayers. The American higher education system is structured by the professorate to
reward those professors who teach small classes of graduate students. So, year after year, decade after decade, the supply of
Ph.D.-holding students increases, despite an academic market
that does not hire most of them, and hires a minority at wages
that do not compensate them for the money and time invested in
earning their degrees.
They cannot teach at the high school level because their advanced degrees force the school districts to pay them too much.
A teacher with a B.A. is paid a fraction of what a Ph.D. or Ed.D.
is paid. The teacher unions have negotiated payment so that existing employees who attend night school and summer school at
Boonsdocksville State can work their way up within the system.
Being tenured, they cannot be fired. Earning a graduate degree
is a guaranteed way to earn a larger salary. But no district goes
looking for Ph.D.s to hire. That financial affliction is entirely
generated from inside the union-dominated, tax-funded public
schools.
HOPE SPRINGS ETERNAL
Ph.D. students are a lot like gamblers. They expect to beat the
odds. The gambler personifies odds-beating as Lady Luck. The
Ph.D. student instead looks within. “I am really smart. These
other people in the program aren’t as smart as I am. I will get
that tenure-track job. I will make the cut. I will be a beneficiary
of the system.”
If wishes were horses, beggars would ride. Also, if ego were
marketable, all Ph.D. graduates would get tenure.
Why does any Ph.D. student at any but the top graduate schools
believe that he will get tenure at any university? The odds are so
far against him, and have been for a generation, than he ought to
realize that he is about to waste his most precious resource –
time – on a long-shot. Investing five or more years beyond the
B.A. degree, except in a field where industry hires people with
advanced degrees, is economic stupidity that boggles the imagination. Yet at least 200,000 graduate students are doing this at
any time. Of the 46,000 who earned a Ph.D. in 2003, at least 50
percent got to ABD status and quit. Probably more than half of
the others quit before they got to ABD status.
At $20,000 or more per year in tuition and living expenses,
plus the $35,000+ not earned in the job market, trying to earn a
Ph.D. is a losing proposition.
In some departments, the years invested are horrendous.
Breneman’s dissertation went into the grim details, department
by department. Anyone seeking a degree in philosophy was almost doomed to failure, yet the Ph.D. degree took on average
over a decade beyond the B.A. to earn. There were almost no
college teaching jobs when they finished. That was before the
glut.
CONCLUSION
Earning a Ph.D. may pay off if your goal is status, although I
don’t understand why anyone regards a Ph.D. as a status symbol that is worth giving up five to ten years of your earning
power in your youth, when every dime saved can multiply because of compounding. If the public understood the economics
of earning a Ph.D., people would think “naive economic loser”
whenever they hear “Ph.D.”
A word to the wise is sufficient.
