Is a College Degree Worthless?

By Jack Hough, SmartMoney

College degrees bring higher income, but at today's cost they can't make up the savings they consume and the debt they add early in the life of a typical student.

Time in Academia

Time flows differently in academia. Years and months go by without getting anyhere. This is probably due to the fact tenured professors are not in a hurry and they set pace for academia as a whole. They gonna get their paycheck today, a year, ten years from now. Even if nuclear war breaks out, they will still get their paycheck.

I remember reading a blog of an MBA graduate who got his degree from a top school. In one of his blog entries he grieves about sacrificing two years of his life to get an MBA. Even though he did get a great job shortly after graduation, he thinks that those two years had a significant price tag in terms of him loosing valuable experience and promotional opportunities. Even though he had a valuable degree in hands and good employment prospects, he felt like he needed to catch up with his peers on the career ladder.

There was another interesting thought in his blog. He suggested that an MBA graduate should not spend more than a month or two after graduation seeking a position. He says that you should take the best offer you can within the first 1-2 months. Otherwise, you may delay your career to the point where you, again, won't be able to catch up with peers.

I wonder what this guy would say about someone who spent 5-6 years getting a degree and then another 6 years trying to find an average payin job... This is probably something beyond his analytical abilities.

Faculty and Administration; Teaching and Research Schools

Here's one thing I've noticed from my own experience. Professors in teaching schools are usually very easy to get along with. It's administrators who give you a lot of trouble with all the rules and their enforcement. In research schools, professors are usually very hard to get along with, since most of them are stuck up jerks. Yet administrators in research schools do not seem to care about anything and don't enforce rules much. So they usually don't give you any trouble.

Bill Gates on Education

Today I watched a TV interview with Bill Gates, the founder of Microsoft. In this interview he mostly talked about his work at Bill and Melinda Gates Foundation. The show host asked him what he thought was the toughest mountain to climb for the foundation. His response went something like this: "Fighting AIDS is tough. Resolving financial problems in poor countries is also tough. But the biggest challenge we are facing is changing education". Than he elaborated on his last statement by saying that education often involves a lot of political agendas as well as conservatism that is engraved in people's minds. He said that resistance to change in education is common to all countries, whether it is China or United States.

Taboos in Academia

Most professors will never admit that:

1. They are wrong
2. They don't understand something

Motivation in Academia

From the perspective of extrinsic motivation, academia can be the most demotivating place to work in.

It's not uncommon for newly hired faculty members to get paid more than faculty who has been with the department for many years. This is the kind of reward you get for giving your whole life to the school.

PhD students experience this too. In fact, it's even worse in their case. Unlike professors, doctoral students do not get annual pay raises, so the difference is often even more drastic. I remember when I joined the PhD program, I was making twice as much as doctoral students who had been with the department for 3-4 years. The irony here is that a senior doctoral student not only deserves to get paid more by most human standards, he or she has a much greater objective need for money. After spending several years in the program most PhD students are usually broke and in desperate need for money. After I spend several years in the program, I discovered that new PhD students were paid 50% more than I was making....

So I've been on the serving as well as receiving end of this wonderful motivation scheme. Does miracles to your motivation and loyalty to the department!

Employment Cycles in Academia

Academia recruits people through lengthy and bureaucratic procedures. The bottom line for anyone who wants to find a university position is that you just can't be hired at any time.

For example, if you are looking for an adjunct position, you won't be hired in-between semesters (for obvious reasons). Therefore, if you don't find a position before a semester starts, you will have to wait for another 4-6 months. Moreover, department chairs usually don't know whether they will need someone from outside to teach a class until 1-2 weeks before a semester starts. So at least some people end up teaching classes or find out that they will be unemployed on a short notice.

If you are looking for a full-time, tenure-track position - there's usually a one year recruitment cycle associated with these positions. So if you hope to start working full time in let's say August 2010, you will have to apply in Summer 2009. Applicants may have through a series of interviews, campus visits, etc. throughout the entire year. Anything can happen during that year. For example, some schools will just suspend their candidate search due to funding for the new position not being approved. If you are not successful in landing a job (and given the oversupply of PhDs this seems to be the case for most candidates), you have to wait another year if you hope to land a full-time job. Even right now there are people who are "looking for work" since 1990s.

What a great field to be in!

Academic Conservatism

One would think that academia is home to the most innovative and free-spirited people. After all, in the absence of market pressures, people are free to do whatever they want.

The reality is that academia is one of the most conservative fields in existence. Absence of market forces seems to do completely the opposite: there's very little incentive to change.

Education is an Attractive Industry

Education is the kind of industry Warren Buffet would love to invest in:

• Everyone thinks he or she needs eduction. It's just a part of our value system. People who don't have education are often looked down upon (unless your are Bill Gates, of course)
• There are very smart people willing to sacrifice 10 years of their lives just to get a minimum wage job as a lecturer at a university.
  
• People are always willing to pay for eduction. Money is often irrelevant to the decision. They will go into all kinds of debt just to get education. Very often, there may not be a strong economic rationale behind this investment - but people want it no matter what. Even if they end up in a situation where they clearly see that their investment hasn't paid off , they may still be happy about it. "Well, at least I'm an educated person!".
  
• Many educational products (knowledge/information) are very scalable - there's little or no marginal cost involved in producing these products. For example, if you create an electronic textbook, the cost of burning each additional CD with the textbook on it is not substantial.Yet the education industry manages to charge a lot of money for those products.
  
• Education industry players are often able to sustain their competitive advantage for decades, despite the fact that their products can be replicated with ease. For example, one can easily set up a school with a curriculum identical to that of Harvard. Yet it will probably take decades and billions of dollars to steal some of the market share from Harvard. Objectively, quality of education may not be that different - but it is very different in the eyes of the public.
  

But the irony is that despite being in a very attractive industry, many schools still demand a lot of funding from the government. They just waste the economic potential that they have.

Why are PhD programs so stressful?

It's a known fact that in order to get a PhD one has to go through years of stress, depression, humiliation, and financial hardships.

This is something I simply don't understand. I understand why surgeons may have to go through a lot of hardships to get their degree. I understand why navy seals may have it the rough way before they are sent on a sabotage mission. I even understand why lawyers may be under a lot of stress in law school. After all, peoples' lives often depend on doctors, soldiers, or even lawyers.

Why do you have to go through so much stress to get a PhD in, let's say English? To write a book that will sell 4 copies and qualify for a minimum wage job as a part-time lecturer??? There's just something wrong with the system and, unfortunately, the system is not likely to change within the next few decades.

Academia is Business!

Academia is business. It's not your average American business. But more like an average Soviet business. It's big. It's usually state owned (or controlled). It's oligopolistic: schools use accreditation, strict licensing requirements for employees, etc. to keep others out the industry. Nevertheless, its business.

You, as a PhD student, is an employee of that business. Obviously, because it's a very inefficient business (mainly because it operates in the absence of free market) it cannot pay a PhD student what a personal of his or her qualifications would demand in the real world. So what is school's marketing strategy to attract PhD students?

First, academia creates this exclusivity aura around PhD. Their marketing message is that having a PhD is like having a Rolls-Royce. It's a sign of exclusivity. The reality is that you don't really need a Rolls-Royce. Hey, if Warren Buffet can get around in a Lincoln, so does everyone else. Pragmatically, the only reason to have a Rolls-Royce is to impress someone, to have that feeling of exclusivity. Similarly, the only reason to have a PhD is to have the privilege to be a professor.

Academia also promises you "eternal life" of a tenure professor. This will mean high pay for little work until you die. The trick here is that this offer is as alluring as a lottery prize. Very valuable, yet you are not likely to get it.

Very often this marketing message doesn't work well and schools have problems attracting PhD students. In this case, there's another source of PhD students: international students. For an international student PhD can be a valuable platform for immigration. Also they don't sacrifice as much financially. In countries like India, China, or Russia, 20,000K per year is really a salary of young professional. That's why there are so many international students in U.S. PhD programs. However, as the standard of living is rising in BRIC countries, there will be a dry-out in the stream of international PhD students (I think there are already signs of the dry-out).

Prestige of Academic Profession

I think many potential PhD students have a misconception regarding the prestige of academic profession. They think that being a professor is a prestigious and rewarding career because professors have a chance to impact individual lives and society as a whole in a positive way.

Several things should be said regarding this belief.

First, if you become a professor, your chances of changing the world are no greater than chances of people in other fields. Just think about some of the most famous and influential people in your country. How many of those are professors?

Second, I just don't see why being a good professor presents more opportunities for impacting others' lives. For example, if you are a chef - you have just as many opportunities to helps others. Feeding people with good food can be just as important (if not more important) than feeding people with often useless knowledge.

In fact, I think the nerdy types who apply to PhD programs are the only ones who admire professors (this usually changes towards the end of their PhD studies). Most normal, mentally healthy people have a certain level of disgust towards the academic types. So while there is nothing more important than being a professor and doing research in the minds of professors themselves, I doubt this view is widely shared by the population as a whole.