Thursday, February 13, 2014

Supply and demand in the PhD labor market

PBS recently featured a story about poorly paid adjunct faculty who comprise a large (about 40%) and growing part of college and university professors but who are poorly paid and work without benefits (Arik Greenberg, "How one professor's American dream – teaching – turned into the American nightmare," February 5, 2014).

Briefly, schools of higher education have discovered that they can hire most of the faculty they need at a relative pittance (about $3000 per course). Tenure track faculty – the permanent employees who receive benefits, unlike adjuncts – cost a school upwards of $50,000 per year, depending upon the professor's rank, field, experience, publications, etc. Some full professors now earn upwards of $500,000 per year, making adjunct faculty a real bargain!

The supply of PhDs (the Doctor of Philosophy degree that most college and university faculty hold, which is often the required credential for teaching in a college or university) and demand for faculty are poorly balanced. That obvious conclusion illustrates both potential problems inherent in relying on a free market to adjust supply and demand and a pervasive lack of free markets.

Let's begin with the latter, the lack of free markets. In a free market, anyone who wanted to earn a PhD could apply, and if possessed of the necessary academic qualifications, intellectual abilities, and financial resources would presumably find a program that would admit him/her. Over time, PhD programs would expand to accommodate the demand. This expansion would begin with existing programs raising their tuition and fees until the supply of fully qualified applicants all had slots. Other schools, seeing the excess profits (for a non-profit educational institution profit connotes the surplus of PhD revenues over the cost of those programs), would then enter the market, establishing or expanding their PhD programs. This expansion, in time, would result in PhD programs chasing applicants, driving down tuition and fees, as schools competed for students.

Little of this dynamic has occurred. The number of PhD programs has expanded. Schools compete for top applicants. But few if any schools accept all qualified applicants. In fact, some schools (usually deemed the best preparation for the job market) deny admission to many highly qualified applicants, limiting the number accepted to the number of full scholarships that the school has available. In other words, PhD programs are not a market that generates revenue, but a heavily subsidized activity. PhD students frequently assist faculty in conducting research and afford faculty opportunities to teach higher-level courses, both of which are beneficial for faculty. In the sciences, the cost of building and operating labs often sets a high barrier to entry that works against the creation of new PhD programs.

Students who embark on the long and arduous path to earning a PhD (typically at least three years and more often five to seven years) generally expect to find employment as a college or university faculty member. This expectation seems reasonable given the highly controlled admission process to PhD programs and the limited number of jobs, part from college and university teaching, for which the PhD provides the requisite credential.

If PhD programs were truly a free market in which qualified buyers (potential students) and sellers (PhD programs) competed, then I would have little sympathy with the plight of adjunct faculty (low pay, no job security, no benefits).

That said, my sympathy for adjunct faculty is rather limited. In the interest of full disclosure, I have been an adjunct faculty member, teaching courses for a couple of different colleges while in parish ministry prior to my service in the Navy. Earning a PhD, even from a fourth or fifth rate school, requires a fair amount of intelligence. The employment conditions of adjunct faculty are no secret. The trend toward fewer tenure track positions and more reliance on adjunct faculty has been happening for over a decade. No new PhD student or recent graduate should find poor employment prospects surprising.

Some people find teaching highly rewarding, if not for monetary reasons for other reasons, e.g., being able to spend one's days engaged in study and reflection or the lifestyle that not having formal responsibilities during the summer affords. Nobody has to work as an adjunct faculty member. The educational debt of many PhDs is more attributable to their undergraduate studies than to a postgraduate PhD program. In other words, adjunct faculty choose low pay over alternative employment.

What I do find morally troubling is that colleges and universities openly exploit their teaching staff, paying them far less than a living wage and less than many (all, in some cases) of their staff in traditionally low paying positions (custodial, housekeeping, food service, and clerical).

Most colleges and universities are non-profits. Reasonable terms of employment set an appropriate moral minimum for their operations. (Sadly, a great many religious institutions have historically paid, continuing into the present, many of their non-professional staff equally poorly.)

What I find philosophically troubling is that PhD programs emphasize career options for graduates rather than the pursuit of knowledge. Why not offer – at cost or more – an opportunity to earn advanced degrees to people who already have a career, perhaps even to retirees? Learning, cultivating critical thinking skills, and contributing to the advancement of human knowledge are three important benefits that earning a PhD degree might confer, if the programs emphasized learning and advancing knowledge rather than being primarily a hurdle that those desirous of teaching must successfully cross. Charging market rates for PhD programs (and private schools using endowment income and public schools supplementing their scant endowments with existing taxpayer subsidies to fund scholarships based on need) would move the system closer to a free market, increase the social benefits of non-profits that offer PhDs, and create realistic expectations among PhD students.


George said...

A friend sent me this comment:

I’m reminded of studies that consistently show that holders of engineering PhDs, on average, have the same salaries as holders of engineering MSs. Either post-graduate degree, however, pays substantially more on average than a BS in engineering -- although that’s biased somewhat by the higher undergrad GPAs of the BS holders who could be accepted into grad school.
Given the incremental difficulty, direct cost, and lack of income while pursuing an engineering PhD compared to stopping after an MS, most engineers who could get PhDs just don’t. Only those who simply love learning or want an academic career go for it. Consequently more than half the PhD students at major engineering schools in this country are now foreign nationals.

Anonymous said...

Your friend's comment highlights the disciplinary differences within the market for Ph.Ds. Engineering and Finance majors have a higher opportunity cost if they go to graduate school, relative to, say, Liberal Arts majors. That doesn't say anything about the worth of Liberal Arts majors. It is likely due to the relative ample supply of Liberal Arts majors (or put another way, the relative shortage of folks who are really good at calculus).