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.