The Ph.D. Glut Revisited

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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

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

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.


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 naïve. 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.


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

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

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:


Ph.D. required

Teach 12
hours of the freshman course

salary has been almost irrelevant: not more than the average salary
of the average American worker with a high school diploma.

the ad said “Ph.D. or ABD required,” it would generate 2,000 applicants.
ABD stands for “all but dissertation.”

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.) Despite this,
we read on a website devoted to selling "how to get higher learning degrees” materials,

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

one born every minute . . . and two who will relieve him of his


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.

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.

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.


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.”

wishes were horses, beggars would ride. Also, if ego were marketable,
all Ph.D. graduates would get tenure.

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, an
equal number (or more) got to ABD status and quit. Probably more
than half of the others quit before they got to ABD status.

$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.

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.


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
“naïve economic loser” whenever they hear “Ph.D.”

word to the wise is sufficient.

24, 2006

North [send him mail] is the
author of Mises
on Money
. Visit
He is also the author of a free 17-volume series, An
Economic Commentary on the Bible

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