Say’s law and academic malemployment

There is a magnificent article in the AFR ($) this morning talking about the gloomy market for academic economists. But there is one highlight:

Things got worse when one heard through the academic grapevine that RMIT University recently had 200 applications for the humble post of a lectureship in economics. Just about every one of the applicants, drawn locally and internationally, had a doctorate.

So RMIT could limit their shortlist to those who had published in those top-ranking journals, and doctorates from equally prestigious centres of learning.

How such a wonderful outcome can be described as “worse” I’m not sure – mind you, the evil, bald, fascist gnome who got to draw up the shortlist did have his work cut out for him.

It’s not clear what the problem is here; those economics departments that are less profitable are exiting the market and those that are more profitable get to expand. That is how things work in almost every industry, and that is normally how economists argue things should work. That isn’t to say that it isn’t heartbreaking when you see colleagues at other places doing it tough. But education is a business – especially business education – and like all businesses success is ultimately measured using income statements.

Anyway, I digress.

This statement – a dig at our colleague Steve Kates – is very wrong.

There is, however, no Say’s law for economists; supply creates its own demand.

Maybe there’s a typo or missing word because a supply of academics very much creates a demand for graduate students and that is what the author (Alex Millmow) is talking about. Bryan Caplan refers to the problem of malemployment. Megan McArdle explains the problem quite nicely:

That constant flow of grad students allows professors to teach interesting graduate seminars while pushing the grunt work of grading and tutoring and teaching intro classes to students and adjuncts. It provides a massive oversupply of adjunct professors who can be induced to teach the lower-level classes for very little, thus freeing up tenured professors for research.

It’s hard to see any alternative to fix the problem, however. The fundamental issue in the academic job market is not that administrators are cheap and greedy, or that adjuncts lack a union. It’s that there are many more people who want to be research professors than there are jobs for them. And since all those people have invested the better part of a decade in earning their job qualifications, they will hang around on the edges of academia rather than trying to start over. Such a gigantic glut of labor is bound to push down wages and working conditions.

This is what happens when you have perverse incentives in a highly regulated market. Making universities more sensitive to price signals would go a long way to fixing this problem.

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35 Responses to Say’s law and academic malemployment

  1. Token

    I bet you guys wish you were lecturing in the academic salt mines in the US:

    2. Faculty exploitation. The abuse of lecturers, part-timers, and graduate students is institutionalized. In a word, the university is the most exploitative institution operating at present in the United States, protected by the notion that it is progressive and that its protocols cannot possibly be understood by the ordinary public. Temporary and adjunct faculty members often have degrees as good as those of their tenured betters. Often their teaching records and publications are comparable, if not superior. They may teach the same classes as permanent faculty do, and yet often receive about half the compensation. Were Wal-Mart or a coal mine to operate under such protocols, it would earn Labor Department sanctions. At some public universities, nearly half of the curriculum is taught by part-time faculty — in effect a subsidy that allows the tenured caste to teach smaller and less-in-demand classes, where less time is needed for preparation and grading. Worse still, universities knowingly turn out too many PhDs in the humanities, which ensures a glut of job applicants, which, again, ensures a continued supply of cheap temps to sustain tenured privilege.

  2. Bruce

    It’s not clear what the problem is here

    Two articles today may shed some light on this:

    Public sector jobs drop to lowest ever recorded levels

    If there are fewer public service jobs you might see more people applying for advertised junior academic posts.

    Secondly, Ms McArdle says “they will hang around on the edges of academia rather than trying to start over”. What she doesn’t say is they do not attempt to get jobs in the (gasp) private sector. This article may help to explain why…and why academics so often lean to the left (our Doomlords excepted). Its an innate personality thing:

    Could this study on honesty and government service explain the EPA climateer fraud and ‘Climategate’ ?

    In this paper, we offer evidence that the college students who cheat on a simple task are more likely to prefer to enter government service after graduation. This relationship does not appear to vary by ability, suggesting that screening on ability does not change the level of honesty of those chosen for government service among the pool of applicants. Importantly, we show that cheating on this task is also predictive of fraudulent behaviors by real government officials

    My own experience of some public sector people in the sciences is if you offered them a position in the private sector they’d look at you like you were mad. So they self select into government service, and when they make employment decisions they employ people like themselves.

    The old saws still work: ‘birds of a feather flock together’ and ‘those who can do those who can’t teach’.

  3. Ellen of Tasmania

    Online learning is starting to put pressure on bricks-and-mortar colleges/universities – even schools. You can learn from the best lecturers and they can teach thousands at no extra cost. It also undermines the stranglehold that certain ideologies have in various fields.

    Perhaps one day our very own evil, bald, fascist gnome will be self-employed – and even more famous?

  4. .

    In Australia, the licensing of pre schools, schools, trade & tertiary institutions is highly regulated and stultifying.

    A good consultant can also teach. Legally, that business model is highly constrained.

  5. Bruce

    My own experience of some public sector people in the sciences is if you offered them a position in the private sector they’d look at you like you were mad. So they self select into government service, and when they make employment decisions they employ people like themselves.

    There is no more pathetic creature than a career public scientist sent on the road to ‘sell their science’. With few remarkable exceptions, it is pure torture and doomed to failure.

    I blame Gough Whitlam who bought huge swathes of middle class voters with the promise of ‘free’ university education for the children of the 70′s and 80′s.

  6. Ronaldo

    Token, thanks for the link to Hanson’s excellent article, which I probably would not have seen otherwise. I have long thought that the push to get more and more graduates into post-graduate courses in fields where there is no demand for their qualifications is a Ponzi scheme. And for many people, if not all, the acculturation they go through while getting the qualifications makes them even less likely to see a career in the private sector as worthwhile.

  7. Boambee John

    “The old saws still work: ‘birds of a feather flock together’ and ‘those who can do those who can’t teach’.”

    And those who can’t teach, administer.

  8. Sinclair Davidson

    Those who can’t teach teach teachers. Those who can’t teach teachers administrate. Those who can’t administrate do quality control.

  9. It’s not clear what the problem is here;

    It’s nice to see a libertarian be honest about their complete lack of concern for human suffering and misery.

  10. It’s nice to see a libertarian be honest about their complete lack of concern for human suffering and misery.

    I think you miss the point here, desipis. Sinc and all those who know people on the fringes of academia DO have a great deal of concern for human suffering and misery, because we all see it first-hand.

    People like Sinc, however, are trying to find real solutions to these problems. A real solution does not consist in creating pretend jobs so that these people – duped by a corrupt university system – can continue to live in a fantasy world. That may be something a psych unit might try with a very deluded person, but even then, there are limits.

    A real solution may involve:

    1) exposing the corruption of the higher degree system, to start with;
    2) encouraging a restructure of the tertiary education sector by reducing it to a more realistic size;
    3) calling the federal government to account for creating this bloated academic monster to mop up unflattering unemployment figures, when really all it does is put individuals on a more expensive form of the dole, and keep them in a holding pattern until they are almost too old to start profitably at the bottom of any other profession;
    4) bring to light the fact that this system – as it stands – CREATES human suffering and misery.

    Genuine economic reformers are always fundamentally concerned with improving people’s lot. But that means improving everyone’s lot, not just the lot of the favoured in-crowd or the intelligentsia or the chattering classes.

  11. struth

    It’s nice to see a libertarian be honest about their complete lack of concern for human suffering and misery.

    What, there’s a gun held to their heads?
    FFS

  12. Token

    It’s nice to see a libertarian be honest about their complete lack of concern for human suffering and misery.

    Quite the contrary. You prove you do not understand the premise of what Sinc has posted.

    Read the McArdle & Victor Hanson Davis articles which make clear the problem is so many kids being conned into courses when there is no demand for their services.

  13. .

    desipis is masquerading as a reasonable person. He said people politically opposed to him don’t care about human suffering.

    In a way, we don’t. We try to prevent it from happening in the first place, not glorify it or make a profession out of it, and otherwise remain civil towards and have a great deal of respect for those who deal with suffering first hand, such as many Christian charities.

  14. Token

    …Victor Davis Hanson…

  15. Token

    desipis is masquerading as a reasonable person. He said people politically opposed to him don’t care about human suffering.

    Of course he is, if he was interested in a dialog he wouldn’t have made a closed value statement based upon no evidence and pre-existing ignorance & prejudice.

    As noted above, he/she/it proves he does not actually understand what he comments about.

  16. jack

    universities have been churning out human rights lawyers and paralegals the last few years,on the promise that the kids will get big paying government jobs,travel the world and ‘save the refugees’. the kids going through the programs are even more radicalised,and now are facing the truth that they have been trained for non-existant gravy trains. they are responding with hysterical balckouts of rage and abbott hate.

  17. H B Bear

    If you really want to find clueless students being sold a HECS funded pup have a look at so-called J Schools.

    Suckers.

  18. Despicable Socialist

    It’s nice to see a libertarian be honest about their complete lack of concern for human suffering and misery.

    No, I’ll have my full-on ‘Costello Smirk’ watching you clean my windscreen when the LDP have defunded your fake charity. You’ll be lucky with 20c.

  19. hzhousewife

    Wouldn’t it be wonderful if all the applicants were good teachers,
    and wanted to teach?

  20. Phillipa,

    A real solution may involve:…

    I agree with some of those points to a certain extent. However, the idea that ‘price signals’ will solve the issue that universities have an incentive to mislead students about the future employment prospects of graduates is laughable. If anything, a more market based solution would only encourage the universities to dupe students with false expectations about future employment and taking their courses even more.

  21. Of course he is, if he was interested in a dialog he wouldn’t have made a closed value statement based upon no evidence and pre-existing ignorance & prejudice.

    Using that standard it’s quite clear the vast majority of catallaxy isn’t interested in dialog.

  22. .

    Desipis that isn’t an argument, it is a motherhood statement.

  23. Sinclair Davidson

    desipis – you’re coming very close to derailing the thread. Please remain on topic.

  24. Token

    I agree with some of those points to a certain extent. However, the idea that ‘price signals’ will solve the issue that universities have an incentive to mislead students about the future employment prospects of graduates is laughable.

    Talking with someone intimately involved with the vocational education segment of the higher ed market in Vic, it was noted that historically the funding was provided based upon the employement requirements in the broader economy. This stopped under the Bracks government with the result many places were found for students where there was no demand for their services leading to a lot of anger. This is now being resolved with a lot of angst.

    Once they work out a model it would be logical to extend it the university sector.

  25. struth

    Plenty of toilets to clean at roadhouses.

  26. struth

    Sorry to sound harsh, but shit happens, we can’t all be chiefs and pampered.
    Some of us have to Indians.
    Even if you believe you should be a chief.
    Every young’n expects to be a singer these days too.
    Plenty taking them for a ride too. I am sorry but I have no sympathy here at all. Why should I?
    I think it’s funny in a way.
    Unrealistic expectations again why?

  27. rebel with cause

    Desipis’ is using typical left-wing debating strategy – I care more therefore I’m right.

  28. Annie A

    Token, at 2.30pm, stated,
    Talking with someone intimately involved with the vocational education segment of the higher ed market in Vic, it was noted that historically the funding was provided based upon the employement requirements in the broader economy. This stopped under the Bracks government with the result many places were found for students where there was no demand for their services leading to a lot of anger. This is now being resolved with a lot of angst.

    I find this quote quite interesting and could explain, what I feel is an over supply of graduate teachers. In the last 4-5 years there has been a push for post – graduate courses in teaching on a premise that there was a shortage (or will be) of teachers and the need to train teachers who have had professional and life experience. The Victorian government recruitment-on-line ( the job site for all advertised jobs for government teaching positions), show many job vacancies towards the end of the year, which would imply that there were many jobs available for graduates. However, because graduates are on a 12 month contract and have to reapply for their own job each year, one does not know if the job they are applying for is a “real” job and they are competing with a candidate who is the incumbent and who is more than likely to get reappointed. So on paper it looks like there are many jobs available. I wonder if this data is used too justify training more teachers and ensuring the Universities receive their funding?

    If each Vic institution trains approx. 100 students each year in post-grad courses plus the undergraduates and Open Learning/ on-line training courses ( that someone else mentioned further up the post), how many graduate teachers are trained each year? Are there that many jobs available in Vic? ( not all teachers trained would stay in Vic, some may go O.S.,of course) Some applications have received over 250 – 300 applicants for one ( so called) graduate position.

    The over training may be due to those who were expected to retire have stayed on , or gone part-time. Some of these retirees are used as emergency teachers – who could deny graduates from getting valuable experience, that may help them secure a position? I do not blame the retired teachers for wanting work either – the cost of living is getting higher. Not all graduates get a job ( based on anecdotal evidence). Not sure of the employment statistics from each institution, which would give a better indication.

    Perhaps the solution is to really assess the true demand for graduate teachers i.e. assess the number of “real” jobs and go back to the pre-Bracks formula – so the training numbers match the positions available, that is, enough jobs for post-grad and under graduates.

  29. Annie A

    Opps… Got the quotes around the wrong way! Lol!

  30. Talking with someone intimately involved with the vocational education segment of the higher ed market in Vic, it was noted that historically the funding was provided based upon the employement requirements in the broader economy. This stopped under the Bracks government with the result many places were found for students where there was no demand for their services leading to a lot of anger.

    Probably not the most economical of political decisions. I suspect it came about because of the politics involved in exporting our education services. It’s a hard sell to claim we can facilitate “limitless” number of overseas students (so our educational institutions can make piles of money) while at the same time restricting the number of places available to local students in the same courses.

  31. Tardell G

    University lecherer economists?
    There has to be a place for losers who can’t predict the markets.
    Lets give these useless failures some LOVE people!

  32. .

    So what do you think of doctors who end up as academics teaching medicine?

  33. Monkey's Uncle

    There are two issues that come to mind. If people have skills and are able to add value, presumably those who are surplus to requirements in academia would be able to work elsewhere. If people are incapable of working anywhere else but academia, does that not mean academia is a kind of sheltered workshop for those who lack marketable skills? (In fairness, there are some academic fields that are perhaps worthwhile but do not tend to lend themselves to skills that are in high demand, but surely economics is not one of them). Secondly, if employment in academia is the main employment goal of any field of study, that field is essentially a pyramid scheme where a smaller number of academics rely on a larger pool of students to keep them in a job and obviously all those students will not be able to work in academia.

    It is amusing to think that such allegedly intelligent people cannot grasp such concepts.

  34. Yohan

    Intellectuals always think their services should be much more in demand and higher paid than they would actually receive on the free market.

    This is why modern State’s have so successfully co-opted the intellectual class to be shills for total government expansion and power. They give them a small seat at the table in return for promoting the general idea of big government being necessary for every aspect of our lives.

  35. Elizabeth (Lizzie) B.

    Yes, much of academia is a pyramid scheme unrealistically promising employment to the hopeful. This drains useful brainpower from the private sector. This would be less worrying if at least the education being offered was not indoctrination into leftism, as individuals could gain a personally valuable outcome, but that is so often not the case. Certainly, hanging around university fringes for years living on crumbs from the cake is a damaging way of life for those doing it, and encourages some tenured drones at the top to take it easy.

    Universities are still operating as medieval guild systems. Philippa, @ 12.26, offers some genuine structural solutions, but there would be considerable upheaval in implementing them and for the private sector to create ready jobs for a generation or more who were not job-ready. There would be a tremendous political push to create more public sector jobs to soak them up..

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