Spending nearly a decade in college, racking up significant amounts of debt, and emerging with that coveted PhD designation isn't what it used to be... in fact it is safe to say the PhD bubble has burst.
The percentage of new doctorate recipients without jobs or plans for future study climbed to 39% in 2014, up from 31% in 2009 according to a National Science Foundation survey. Those graduating with doctorates in the US climbed 28% in the decade ending in 2014 to an all-time high of 54,070, but the labor market - surprise surprise - has not been able to accommodate that growth. "The supply of PhD's has increased enormously and the demand in the labor market has increased but not nearly as fast. When you can import an international workforce or outsource research, you have a buyer's market" said Michael Teitelbaum, senior adviser to the Alfred P. Sloan Foundation.
Of course the labor market isn't able to accommodate those PhD's, unless of course their chosen concentration is bartending, which in that case would mean that opportunities are plentiful (although paying back those loans may pose a problem).
As a reminder, since December 2014, while all of those new PhD's were emerging from a decade of lecture halls and academic circle jerks, the only jobs that have been created in any meaningful way have been in the service industry. There have been pockets of growth elsewhere, but even those higher paying jobs were primarily part-time roles.
As employment opportunities become increasingly more difficult to find, those that committed their time and future consumption capabilities (ie: took on a lot of debt to finance the degree) are also finding that median salaries are falling as well as a glut of those with a doctorate degree have flooded the market looking for work. Median salaries for PhD's working full-time fell 6% between 2010 and 2013 the WSJ reports, which doesn't bode well with the fact that those who obtained the degree thought it would be a hedge against stagnating wages and unemployment.
While PhD's still earn a premium over others in the labor market, median salaries have declined significantly. As the WSJ notes, Computer scientists earned $121,300 in 2013, down from $129,839 in 2008; engineers earned $120,000, down from $125,511, and so on.
Contributing to the pain is the fact that universities (academics being the larges employer of PhD's) have moved away from only employing tenured professors and have begun using a greater number of relatively lower paid adjunct professors. Another development that is hurting PhD's is the same type of thing that has plagued those in other industries, and that is the outsourcing of jobs overseas. The pharmaceuticals industry, who is the largest employer of chemists in the country, has moved much of its research overseas, shedding 300,000 jobs in the US in recent years, and as a result, furthering the supply glut and causing salaries for chemists with PhD's to fall 12% between 2004 and 2014 the WSJ reports.
The shift in employment opportunities has led graduate students beginning to think of careers outside of - gasp - academics, or their research field. This is raising the bar for those competing for jobs in the other fields, as now their resume will be examined next to a Ph.Ds, and we know how PhD's are viewed as the oracles of every subject.
From the WSJ
The decline in full-time hiring in universities has resulted in tens of thousands of Ph.D. holders teaching classes for around $3000 each without benefits. And postdoctorates, once a year-long stopover for scientists on the way to better research positions, are now stretching four years on average. Most pay between $40,000 and $50,000 a year.
As a result, many graduate students are considering careers outside the academy or their research field. This has led to credential inflation as Ph.D.s fill jobs traditionally held by professionals without such lofty degrees. For instance the number of Ph.D.s applying to teach at private high schools has jumped between 10% and 20% over the last five years, according to Devereaux McLatchey, president of Carney, Sandoe & Associates which is one of the nation’s largest recruiters for private high schools.
Many graduate students, however, are reluctant to admit to their professors they are considering careers outside of the academy for fear they will lose their support for the few tenure track jobs that are out there.
“For some students, academia feels like a cult, with many grad students feeling isolated and disempowered,” said Kelly Brown, assistant director at the University of California Humanities Research Institute. The reality, especially in the humanities, is that only “Ph.D.s graduating from top-tier universities stand a real chance of landing a tenure-track position. The rest go on to contingent labor positions or leave academia altogether,” she said.
Schools are beginning to respond. Ms. Brown oversees a new program to place students in the private sector. One grad student working for her said she uses a pseudonym on the program’s blog to avoid alienating her professor. At Stanford University, a program is in its second year to help Ph.D. graduates find jobs as high-school teachers. At the University of Miami, doctoral students are interning in the school’s communications, development and research departments to learn more vocational skills; and at Columbia University, Ph.D.s are taking classes in using Twitter to better communicate their work to nonacademic audiences.
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"There is hope" Jake Simson, a biomedical engineer turned financial analyst said in front of a group of doctoral candidates at the University of Chicago, as Simson was explaining how to find a job. Hope indeed, as central bankers around the world continue with the steadfast effort of completely ruining healing both the financial markets and the real economy, there is no doubt that PdD's will be in high demand to help model out the world's future.