Asymmetrical Information - Megan McArdle

01.18.13

Too Many Students, Too Few Jobs

Law schools aren't the only ones.

Several of my readers have asked if I've seen this article about the New England Law School, whose dean makes a high-six-figures salary for producing graduates with some of the worst employment rates in the country: 

New England Law certainly pays top dollar for O’Brien’s services. Pressed to name a dean who is paid more, Robert Gray, a political consultant hired by the school to help O’Brien answer questions from the Globe, cited only Brooklyn Law School, in New York City, where a dean and a president are paid combined salaries of more than $1 million.

But some indicators suggest that O’Brien’s impact on New England Law’s performance has been limited. US News & World Report, in its listing of 199 law schools, includes New England Law among the bottom 50 or so schools that it does not publicly rank because they fall “below the US News cutoff.”

In addition, only 34 percent of students in New England Law’s 2011 graduating class were able to land jobs requiring a law degree within nine months of graduating, according to the American Bar Association, compared with 68 percent at Boston College Law School, and 90 percent at ­Harvard Law.

Yet, students at New ­England Law pay almost as much in tuition as students attend­ing law schools where graduates generally have more success finding meaningful employment. Boston College law students, for instance, pay only about $1,000 a year more than New England Law students.

I have, and I think it's appalling. It reminds me of an earnings call I once listened to with the president of a major casino group (I won't say which one). It was fascinating listening to all the ways they had to keep "avid gamblers" (read: compulsive gamblers) in the casinos. The analysts asked a bunch of good questions about marketing, investment, and cash flow, but none of them asked the question I really wanted to hear answered, which was "How do you sleep at night?"

No, I don't think that gambling should be illegal. Yes, I understand that if he didn't do it, someone else would. Nonetheless, I could not myself spend my days thinking up ways to shake the last dime out of the bleeding pockets of people who were ruining their lives. (As in other "vice" industries like alcohol, a disproportionate share of the revenue comes from the small minority who have a serious problem). 

Similarly, I do not think that shouldbe illegal for Mr. O'Brien to run a law school. But how do you keep enrolling people at such exorbitant tuitions, knowing that the majority of them will not be able to get jobs with their degree? (And a larger majority still will not be able to get jobs which permit them to repay their loans). And pay yourself such a handsome salary to boot?

But let's not forget that there are lots of people out there exploiting students these days.  A while back, I observed that academics tend to describe the job market as an improbably Dickensian welter of exploitation, a description which matches only one job market: their own.  I asked why such a left wing environment had producedone of  the most radically unequal and exploitative job markets in the country, which drew the following story from a reader:  

The entry of new job applicants into this labor market has nothing to do with the availability of jobs. University administrators control how many tenure track jobs there are, but the faculty controls how many new graduate students there are. Faculty decisions about how many grad students to admit are usually based not on how many new PhDs they can place in jobs, but how many graduate assistants the faculty feel they need. I went to a fairly prestigious Midwestern university, and I entered the program with a cohort of 14 first-year grad students. In about my second or third year, the Department Chair and Director of Graduate Studies informed us that new cohorts would be smaller, 7-8 students at most, because they could not in good conscience admit students who they knew they couldn't place. After less than a year, the faculty were furious because there were not enough TAs to do all their grading for them. The next year, the incoming class of grad students went back up to 14.

Presumably, the marginal six or seven candidates were less likely to get a job than the first choices.  The oversupply of graduate students in the humanities is much, much worse than the oversupply of lawyers. The odds of a PhD student from a third tier program getting a tenure track job approaches zero in many fields (and falling every year), yet the schools keep cranking them out.

While graduate students who wash out have less debt than law graduates, they have also used up a lot more valuable years. Frequently they land on the job market in their early-to-mid thirties with no job experience except teaching undergraduates, adjunct for a few hopeless years, and then have to find an entry-level job when everyone else is approaching their peak earnings years. Why do tenure track faculty, a left-leaning group that presumably does not approve of this sort of injustice, perpetuate the enormous oversupply of graduate students? Because they don't want to grade, or teach intro classes, or sacrifice valuable research time (research that, not incidentally, makes the professors more attractive on the external job market, hopefully enabling them to leave said third tier program for somewhere more prestigious and conveniently located).

Yes, yes, professor, education has all sorts of valuable intangibles, but if graduate degrees are good for all sorts of things besides becoming a professor, why do y'all brainwash your graduate students into believing that it is vaguely shameful to do anything else with their life?  

But it gets worse. As the writer of the above comment noted: 

. . . after graduate school, many academics - even those who want to get out - really can't. They have at least a 6-8 year gap on their resume that many potential employers will look at as wasted time. And they are overqualified for most high school teaching jobs, since unions rules would require new teachers with MAs or PhDs to get higher pay than someone fresh out of undergrad. Particularly in the humanities and some social sciences, they believe - sometimes correctly sometimes not - that there just is nothing else to do but stick it out with whatever miserable [non-tenured] position they happen to have found.

The belief that education is both good in and of itself, and also, is practically a guarantee of a good job, was never entirely true. But now it's clearly false in many fields, and insiders who blind themselves to this reality are doing naive kids a great wrong. Increasingly, getting the extra degree may actually decrease peoples' chances of finding jobs, partners, and satisfying lives, because of the debt and time that are poured into them. Bottom-tier law schools are the perhaps the most flamboyent offenders, but they are far from the only ones.