PhDs Go Begging, Microsoft Lays Off High Tech Workers, Graduates Not Able to Cope with Student Loan Debt Getting Jobs as Baristas…
By John Lawrence
…That’s the new reality for today’s college graduates.
Have America’s young people been sold a bill of goods? They thought that a college degree guaranteed them an entry to a good middle class life. Many are now finding out that that’s not the case as they struggle to pay student loans and try to cope with an anemic jobs market. For-profit colleges are advertising on TV in order to perpetuate the myth that a college education is a panacea. Even President Obama spouts that everyone should go to college, saying that’s what will cure the nation’s ills and prevent us from falling into the abyss of national mediocrity.
But don’t count on it. Even PhDs are having trouble finding jobs. Dan Rather says in an episode entitled PhDon’t!, “If you believe getting an advanced degree in science or math is a meal ticket for a career of the future, know there’s a glut of highly qualified PhD’s who will never get the jobs they spent over a decade training to do.” Having stayed in school and gotten advanced degrees, they find themselves working in low paid positions as post docs well into their 30s. As a result, much scientific talent is going to waste. Even Shirley Tilghman, the President of Princeton University, herself a scientist, is now dissuading students from making a decision to pursue a scientific career.
It doesn’t make any sense to spend years in college, acquiring student loan debt, to then not be able to find a job, or to have one’s job outsourced after having found one. It makes more sense in my estimation to follow my three rules for job selection: 1) Don’t train for a job that can be outsourced; 2) Don’t train for a job from which you can be downsized; 3) Don’t train for a job that requires one to go into debt.
Rather than training for a cutting edge career that requires you to be hired by a corporation, train for a job which has a well established market that you can access by being self-employed. Many college educated people have a trade as a sideline or which they can pursue on their own if their services are no longer required by a corporation.
The high school years provide an excellent opportunity for learning a trade. Everyone should do this irregardless of whether or not they intend to go on to college. The advantages are 1) no student loan debt need be taken on; 2) one can be self-employed and start a business as soon as a driver’s license is obtained; 3) a business can be built while still living with parents to minimize expenses while getting established; 4) as long as you serve the local community your job can’t be outsourced; 5) you can’t be fired or laid off unless you fire or lay off yourself; 6) you get to set your own hours so that you can incorporate other activities into your work day. These are just some of the reasons why it makes sense not to rely on a college career just like the many successful people who have eschewed a college degree.
America’s Job Losses Are India’s Job Gains
“Silicon Valley high techs are all over India now hiring by the thousands” says Dan Rather in his report “Help Wanted! Not Here.” The high wage, high tech jobs are moving off shore where they can be done, according to one Indian facilitator, “better, cheaper, faster.” Outsourcing is part of an American strategy to keep companies lean and competitive. And they cannot ignore the billions of potential consumers in India, China and elsewhere who are just entering the middle class. While corporations are prospering in this global environment, American workers, even those with PhDs, are losing their jobs, and those jobs are not coming back.
Silicon Valley has been the bellwether in the quest for pushing boundaries in the high tech world. Google, Facebook, Intel, Hewlett Packard and others have led the world with their technical expertise and inventiveness. But today, on closer examination, the gleaming cities of high tech campus buildings look now more like gleaming ghost towns. Silicon Valley buildings sit vacant. Nearly 75,000 people have lost their jobs in Silicon Valley during the recent great downturn. Layoffs were massive. HP reduced its payroll by 17,000; IBM, over 10,000. Cisco systems laid off 6000. Across the valley there was a glut of empty office space that could fill more than 20 Empire State buildings.
Despite the imprecations of many highly educated role models, a college degree just sets you up for being hired by a corporation and then unhired as it suits their (not your) purposes. Unemployment in the high tech capitol of the US, Silicon Valley, is around 11%. So-called “mature workers” search futilely for jobs. Anyone over 50 is considered to be technologicaly obsolete, and his or her job is in jeopardy. Their jobs are being outsourced to younger and more energetic people in Bangalore, India among other places. People have lost their jobs, their homes, their health insurance and in some cases their marriages. While stock prices are up and corporate profits are soaring, workers in Silicon Valley despair of ever finding another job in the high tech industry.
But while workers despair in Silicon Valley, hopes are soaring in India. American companies are hiring there big time. It’s a never ending job fair. Companies laying off in the US are in a hiring frenzy in India. India’s high tech outsourcing industry hired 850,000 people in 2012 alone. All across India there is a new exuberance, a new confidence and new jobs. India’s highly skilled laborers are working for $9000 a year, much less than a middle class, college educated worker in the US will work for. India’s new middle class is already bigger than America’s and there are jobs galore for everyone. India’s colleges are churning out highly skilled graduates. India has dozens of high tech universities (India Institutes of Technology) churning out hundreds of thousands of engineers and computer scientists every year.
Today Bangalore is called the Silicon Valley of India and business is booming. In 2012 Dell Computers doubled its headcount in India. Accenture Consulting, which had only a few employees in 2003, today has more than 50,000. HP also has around 50,000 employees there. IBM is estimated to have more than 100,000 workers in India, more than in the US. Cisco Systems has a beautiful campus with four buildings and 6000 employees with thousands more on the way according to the company. Cisco prides itself on having more workers in the US than abroad, but is now doing about half of its core research and development in India. Cisco workers work in a “smart building” – the lights, the AC, the heating, even the doors are all controlled by the prescence or abscence of workers in the building. These innovations were all designed in India.
Outsourcing on Steroids
American companies operating in India have increased production seven fold in the past three years. And the Indian companies specializing in outsourcing are ready to take it to the next level. So far only the largest Fortune 400 companies have been involved, but outsourcing giant Quatro is prepared to facilitate outsourcing for mid-market companies as well. That means they will actively pursure smaller companies to outsource jobs to India, and that means more American workers will lose their jobs. In fact any job that American workers are now doing can be done in India at a price and at a quality that is better than what you could get in the US, and Indian outsourcing companies are busy cheerfully advertising that fact.
While Silicon Valley has a glut of empty office parks, gleaming architectural masterpieces are taking the place of shanty towns in India. Free trade or no free trade, the facts of globalization are that workers of all skill levels will be found to do the jobs Americans once held wherever their pay levels are the cheapest. Americans will be left to take classes on how to write a killer resume and how to present themselves in the best way to job interviewers as they compete with hundreds if not thousands of applicants for one lousy job.
Americans will not be hired to create products to ship to emerging markets as free trade theorists have promised. Instead the jobs themselves will be shipped to local markets in India and elsewhere where the local population will be employed to create and manufacture products that are sold locally. This makes sense as in the Henry Ford example where he paid workers $5 a day in order that they might make enough to buy the products they themselves were manufacturing. The same applies to India. By employing local Indian workers, they will then have the money to buy the products they are manufacturing. The result is the creation of a local middle class in India. American workers are superfluous.
As far as job creation in the US, US corporations are importing guest workers from abroad under the H1B Visa program. These workers are then trained in the US, and take US expertise and jobs with them when they return to their own countries while their trainers in the US lose the jobs they have just trained Indians to take from them.
Under current US tax law, US corporations do not have to pay taxes on foreign earned profits unless they want to repatriate those profits to the US. That makes it better to expand business operations in the countries where those profits were earned than to bring the money back home and invest here.
Ron Hira is a researcher with the Economic Policy Institute and a public policy professor at Rochester Institute of Technology. He wrote the book “Outsourcing America” which argues that lawmakers need to stop providing incentives to companies that send jobs overseas. He says, “There’s no other country in the world that actually encourages firms to expand overseas in lieu of expanding in [their home country] through their tax policies.” Some companies like McKinsey Global Institute are making millions of dollars advising other US companies on how to outsource their jobs.
But what about the argument that what’s good for the big corporations is, in the end, good for the US economy and good for Americans as a whole? Hira says, “I think this is another misconception. ‘What’s good for General Motors is good for America’ and vice versa: I don’t think that’s true anymore. We’re losing a lot more jobs than we’re gaining in that relationship.”
In a nutshell outsourcing is good for American corporations; that’s why their profits are soaring. It’s not good for American workers who have invested heavily in their college educations and need a job to pay off their student loan debt or to buy a house or to raise a family.
PhDs Begging for Jobs
And PhDs are finding themselves redundant even after years of college education and huge burdens of student loan debt. Despite being told by President Obama and other government and industry leaders that we need more scientists and engineers, newly minted PhDs are becoming realtors and going into other professions that don’t require extensive training simply to make ends meet.
ShirleyTilghman, PhD and President of Princeton University, told Dan Rather on PhDon’t!: “And they say, ‘Do I really want to be 38, 39 years old, still in this training position? I’m going to medical school, thank you very much.’ Or, ‘I’m going off– to Wall Street.'”
Take Brooke Flamming for example, a recent Harvard PhD: “I did a four-year bachelor’s degree. I did a two years master’s degree. I did a five-year PhD. I graduated my PhD in the 23rd grade — you just count up from 12, plus four is 16, plus two…”. But instead of reaching her life’s goal of becoming a professor, Brooke is stuck in career purgatory, a never ending series of low paid post doctoral positions. Brooke says she works 60 to 80 hours a week at a job that took her 23 years of education to get all for a salary that averages $8 to $12 an hour.
Only about 14% of PhDs like Brooke will ever find a job like a professorship. The problem is that the system is turning out many more PhDs than can be absorbed by the job market. Educators know this, but they don’t care because their job security rests on the fact that they can continue to turn them out despite the hardship they will face when they come face to face with reality.
Aaron Dossey, PhD, is not waiting for some lab to hire him. He conducts his research from the kitchen of his one bedroom apartment in Gainesville, Florida. He is working on experiments that he hopes will one day feed malnourished children around the world. He spent six years getting his PhD from the University of Florida, but he might just as well have skipped all of that and just started working out of his apartment in the first place. You don’t need a PhD to do that. He’d have been better off learning a trade that he could do to make money and do his research in his spare time. As it is now, he’s living off his savings and the money he got from a small grant which will soon be gone.
Dossey says: “I felt as if I could have started a lab and been a professor right after graduation. I was chomping at the bit, as they say, ready to get out there and start my own lab. At the time I didn’t– I just had no idea. I just started applying, and after a year of no calls, no interviews, and then my thought was: It’s my first year, the economy was in a mess– so I was patient, I thought well that’s the way it is.”
So now he is an independent scholar, an unemployed researcher, all his noble goals of feeding the world seemingly of no value to anyone else. Despite the fact that Dossey has gotten two awards from two different journals, he is a non-entity as far as the professional world of his peers is concerned. He is losing employability with each passing day. After six years and three post-docs, Dossey has become less marketable. After almost giving up, Dossey finally received a $100,000. grant from the Bill and Melinda Gates Foundation. But this will only cover the expense for his lab equipment, not his living expenses.
Dossey says: “I don’t have an income other than a few invoicing hours that I can do on the grant. I’m trying to find other ways to make money on the side. I made some T-shirts for my company. Trying to sell those. Basically, I’m living off my savings right now, running my company, trying to find income – working at Home Depot or something you know, … , maybe a part-time hourly job or something.”
If Dossey had followed my advice, he would have learned a trade in high school that he could pursue part time along with his research and that would have provided him with enough money to meet his living expenses. Currently, he eats his meals off the 99 cent menu at McDonald’s. When his money runs out, he is not looking forward to having to move back in with his parents and give up his research altogether.
He says: “I’m 35 now. And I love research and I wanted to do research, and I have all kinds of, you know, research that I could do, and I think, contributions I could make. For me personally, I could bite the bullet and could be just a– dream that didn’t happen. A lot of people have dreams that didn’t happen. But I think it’s a little bit bigger deal, and I think there’s more squandered than just my– than just what’s in it for me.”
President Obama has called for “One million more American graduates in science, technology, engineering and math over the next ten years.” But why would someone heed this siren call only to be disenchanted at the outcome? With hundreds of applicants for every position and corporations making more and more demands for the perfect candidate, even these highly trained PhDs with years of post doctoral training can’t measure up. Corporations want the best, and they want it right now. They are unwilling to do on-the-job training.
Princeton President Tilghman says: “I think the pathology in the system right now is the length of training that it takes to get from a beginning graduate student to someone who has what we would think of as a real job in the real economy. And that number has been growing and growing and growing, and it’s strictly market-determined. In other words, as it gets harder and harder to find one of those jobs, you stay in training positions longer and longer and longer.”
Finally, Rather asks her, “If there are too many scientists and not enough jobs, is the big policy push to produce more scientists just bad policy?” and Tilghman replies, “Yes. I– I think it is bad policy. And I think that it– it will ultimately be harmful to the enterprise in the long run.”
Aaron Dossey is thinking about filing for unemployment.
bob dorn says
I archived this John Lawrence piece because I figure I’ll need to re-read it, and need to send it to people I respect, so that they’ll read it.
My long view of capitalism is that its supplicants and apostles have surrendered to cultish views that separate them from the rest of us. Remember those “labor-saving devices,” like electric can openers and battery-driven drills? We now have labor-eliminating devices: drones that deliver the mail from Amazon, parking lots without attendants, self-checkout machines that have the customer do the job… This reduces the numbers of jobs people can hold. Job scarcity reduces wages, and people begin to accept jobs that do not support them.
The outsourcing of engineering jobs by Silicon Valley is just another source of unemployment in America, one that more narrowly affects the middle class. So now the story is, we’re all in the same boat, from the homeless to families of four earning $80,000 per. We can’t afford to buy what is being advertised.
The CEOs and marketing geniuses have created a monster that efficiently sucks up all the money into the air. It’s a Bladerunner world.
I figure that machine will break down soon. It probably already is.
John Lawrence says
However, Bob, the breakdown will only be for the American people, not the corporations. They are busy creating and selling to a rapidly developing middle class in India, China, Vietnam, Korea and other Asian countries. The Trans Pacific Partnership (TPP) will only hasten and accelerate that process. The corporations will still make plenty of money whether or not the American people can afford to buy their goods.
bob dorn says
The United States has well more than 300 million people, and a majority of those are accustomed to having enough to eat, a car, shelter, friends and a regular pop of something that alters their mood. I doubt those many millions are going to go gently into medieval serfdom and uncontrolled disease in order to further the interests of a self-proclaimed elite with its armies of engineers and political Merlins.
Aside from the real prospect of a cultural revolt, is the question of sheer numbers. Could the world do well without a healthy United States? We’re famous for wanting and spending; you’ve heard the news go sour on our recently tepid Christmas performance, and giddy about car sales. If all the cars end up being made in China, China will still need Americans to buy them.
I couldn’t agree more that NAFTA, and now the TPP is an outsourcing, cheap labor, short-sighted nightmare. But these temporary sources of ghoulish pleasure for greedheads is their own undoing. They base their schemes on massive consumption and that doesn’t happen when people are dying in the streets.
It’s a pretty creative moment right now. Politics is more than what our elites offer us. A lot more Americans, particularly the young ones, see what’s happening and I think we’ll see some big changes, despite the drones, NSA, fossil fuelers and other cooked-up fantasies of stupid power.
BladeRunner world sounds about right, with a dash of MaddAddam trilogy. I can’t imagine a future in which it is not de rigeur for people of means to live in gated communities. Those who call the shots clearly don’t care whether the rest of us are even minimally economically viable. Appealing to their (apparently non-existent) better nature (or even what you would -think- is their self-interest) with questions like “do you really want to be a rich member of a poor society?” gets the silent treatment. Clearly they must know something we don’t, or have plans for themselves (Singularity?) that we don’t know about.
Just got my chem degree.
Went looking for jobs, everything is 15-19$ an hour. Repetitive work testing pee samples. Everything else is oil. (I’m in Texas)
Maybe I’ll just end up breaking bad.
Neither my wife or I think that college education gives young people a head start in life. Neither of us has a college education. Nancy has been comptroller of a few new car dealerships. I have been Stockroom manager for a Fortune 500 company. We believed in working for a paycheck instead of collecting one.
We had four children. The nice thing about a forty hour a week job is, it gives plenty of time to find a hobby. Mine was carpentry, electrical, & plumbing. Over the years we purchased several handy man specials. Our oldest Son became interested in them also. Before graduating from high school he decided that he would be a carpenter. He had helped old Dad on quite a few houses. He learned quickly. He became self employed, right after high school and has remained that way for thirty years.
Our two daughters took after their Mother. One of them is the head Bookkeeper at a car dealership. The other one is, one of the financial managers at Holliday Inn.
Our last child, a son joined the Army as soon as he graduated high school.
All of our children are earning much more that the minimum wage. They had no huge college debt to pay off. They all own their own houses.
Clarissa gives us some perspective on what social collapse looks like at the local level, in this case the Spanish colonial outpost called Melilla:
While its true that hitech jobs are being created by the thousands in india by domestic and foreign companies, please dont say that everything is hunky dory there. All you need to do is a gogole search ” youth unemployment india’ or ‘graduate ‘unemployment india’ to see the real situation over there. India has tens of millions of graduates and hundreds of thousands are entering the workforce every single year, these outsourced jobs are a drop in a bucket for indian graduates, thirty percent of whom are unemployed.
And india’s growth rate too has been falling in recent quarters. For a country with 1.25 billion population and a total graduate pool of close to ‘100 million’…jobs outsourced from america are not much. Its middle class is in far worse shape than usually projected in the media.