PhD's In Distress and the Unsustainable Cost of Education

In response to How Being The Slightest Bit Overqualified Can Cost You A Job I received several interesting Emails.

Here is an Email from "PhD In Distress" about overqualified candidates fresh out of college with nowhere to go, competing for jobs that essentially do not exist.

"PhD In Distress" writes:

Dear Mish,

I very much enjoyed your article today “How Being The Slightest Bit Overqualified Can Cost You A Job”. Although it seemed you and those giving comments seemed to focus on the overqualification of experienced workers, I would like to bring the plight of overqualified students (particularly PhD students) to your attention. I say this as a PhD science student myself.

In case you are not familiar, the “typical” PhD undergoes the following path: BS (usually adding significant debt) then PhD (most programs I know of skip masters level and pay about $20000/year and take 5-7 years) then postdoctoral experience (essentially you do the same work as your PhD for an additional 2-3 years in a different lab except you only make $35000/year) then you can attempt to get a job in either academia, industry or government. I should also mention that student loans can be put on hold while in a PhD program but not during a postdoc.

The postdoctoral experience has not been traditionally necessary for my field to get a job in industry and I am attempting to do so sans postdoc as I have no academic inclinations.

The problem that I see is that when I look for a job using keywords in my field is that I get one of two postings:

1) BS required, MS preferred (making up about 60% of postings)
2) PhD with 5+ years experience (making up 20% of postings and sometimes academic experience such as postdoc won’t even count)

This means that I am overqualified for over half the positions that are posted. Even worse, most of the positions for my level require experiences that I cannot even obtain after my PhD.

My plight is no company in this economy will spend money on an entry level, unproven PhD that will need 2+ years training before he/she is adding significant value to the company.

That leaves me and many others with the only option being a postdoc. However, there has been a glut of postdocs building since the 90s. More and more students are chasing fewer and fewer academic positions (which require a postdoc).

Many of them simply give up and start looking for industrial positions. This has not gone unnoticed by industry and has resulted in more and more companies requiring experience for what should be entry level positions.

The great recession has only exacerbated the problem and now I know of people on their third or fourth postdoc (mostly looking for academic experience but still well into their 30s and making $35000 with a PhD). This makes it even harder for recent grads just to get their first postdoc. Again, why would a professor hire a new grad when he/she can get someone with 3+ years experience and pay them the same?

So here I am highly educated with no place for a job. I’m overqualified and overspecialized for 60% of the work yet simultaneously underqualified for the other 40%. Moreover, there seems to be no way to rectify the situation.

Therefore, it should come as no surprise that more and more domestic (US) students have begun to realize what a raw deal a science PhD has become. This is reflected in lower numbers of domestic PhD students over the past couple decades. Though this is particularly bad for the US in the long run as foreign science PhD’s increasingly return home to work in available and relatively well paying jobs.

I feel particularly bad for the spike of new students entering a PhD program now to avoid the recession. If we will have structurally high unemployment for a decade (for which you have made a compelling case) then we will have 2 more “generations” of PhDs in an increasingly bleak situation. Even if the economy improves it would take massive growth just to get through the backlog of experienced postdocs and laid off scientists seeking positions.

In either case, my approaching graduation has made me more aware and thoughtful of my situation and thought your article was timely and informative. Keep up the great work spreading the word about real recovery through sound money and policy!

Just in case you would like to share this, please do not use my name or initials. Science is a very small and intellectually inbred community and not very open to criticism.

Thank you again,

PhD In Distress

Plight of the PhD

Thanks to "PhD In Distress" for explaining the sorry plight of those seeking higher degrees. When hiring does start, it will likely be with those having a fresh degree than those who had been seeking employment for years.

These two posts should put a solid kibosh to the Obama Administration's notion that education is the key to success and all we have to do is give people more training.

If corporations are not hiring, all the education in the world will not do any good. In fact, as these posts show, it can be a detriment.

As I have stated before "If everyone has a PhD, then PhD's will be driving trucks, mowing grass, and greeting at Walmart".

Here is the lotto-like process described in “How Being The Slightest Bit Overqualified Can Cost You A Job”.

• 500 résumés came in for an administrative assistant for a trucking company
• 61 were selected out of the first 271 for review
• The rest were not even looked at
• Highly overqualified candidates were weeded out on the first pass
• Slightly overqualified candidates were weeded out in the second pass
• 8 were selected for a one hour interview
• 2 were invited back for a second one hour interview
• 1 said she would try and grab a fly ball at a stadium ballpark in response to a random question, the other would not

When it came down to the final two candidates, the lucky lotto winner was the candidate willing to grab a fly ball.

Escalating Costs Out Of Line

The cost of a US education seems enormously out of whack for what it provides. Currently all that education buys you is a chance to enter a lottery for the few jobs available where "To land a job you have to be the perfect candidate, near the top of the stack of résumés, neither underqualified nor the slightest bit overqualified and you have to be willing to grab at a fly ball"

With an education, you are forced to play Résumé Lotto hoping to be on the top of the stack, hoping for an interview, hoping for second interview, then hoping for an offer.

However, without an education you will most likely be fighting for trade jobs, retail jobs, or government jobs.

The education system has clearly broken down.

College Price Comparison Flashback

In 1971-1976 I attended the University of Illinois graduating with a B.S. in Civil Engineering.

I financed my way through college working at the Danville, Illinois Holiday IGA grocery store in the summer, and by playing poker on weekends against farmers in Cayuga Indiana and various other places. A big night was making $100 as that was a whole week's wages at the grocery store.

Tuition was $250 a semester, and the U of I was one of the best engineering schools in the country. Tuition was something like $400 a semester my final year.

University of Illinois Tuition is now in excess of $6,000 a semester.

Whole chickens on sale, and a loss leader at that were $.21 lb. You can sometimes find them on sale for $.49 lb. You can easily find them for $.69 lb on sale.

Since 1971, chicken prices on sale have approximately tripled, the minimum wage has roughly quadrupled and the cost of tuition at the University of Illinois has gone up by a factor of 24.

Something is out of whack and it is not chicken prices or the minimum wage. Currently, I do not think I could finance myself through college playing poker on weekends against farmers in Cayuga Indiana, nor do I think anyone else could either.

With the cost of education up 24 times (and that is tuition only, not room and board) the trend in education costs is simply not sustainable.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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