Interesting discussion on the crisis in higher education

[StatGuy2000]

One factor that amazes me is the changing demographics of students in freshman courses I've had to instruct. I have two attorneys that worked in the private sector that graduated from tier-1 law schools. Both basically tell me since the economic downturn there's been over-saturation of lawyers because of downsizing and new graduates. The market is too saturated.

They're now both in school looking for an alternative profession in medicine and other professional programs. I graduate in a few months (hopefully), and I see myself in the same dilemma. I've got bills coming in from loans soon, and I have a daughter to worry about.

In addition, I've seen engineers, other sciences, and students with bachelor degrees going back to school in hopes of a recovering economy that will hire them soon.

I'm not being pessimistic but I don't see the situation getting better for anyone graduating in physics, chemistry, engineering (not as bad but it's worsening), and science overall. The USDA & FDA labs nearby are cutting their departments drastically and local universities, for the most part, aren't hiring. I'm seeing an increasing number of students entering and graduating from college with degrees that aren't too marketable. I see an educational bubble bursting soon. Once students realize that their education isn't a promise to a sound job, it's going to pop. Furthermore, graduates accumulating all this debt isn't promising prospect for a sound future. Overall, I see this a problem across the board for most majors.

I see the US economy contracting severely in the following years. Our economy has too many negative factors that are hindering growth (sovereign debt, entitlements, military expenditures, currency devaluation, and much more). If you have any counter points, by all means, share them. I want to be wrong, but I feel I'm just sobering up to the fact that my educational endeavors won't hold much in a depressing economy. So far, my only job prospects have been temporary positions at local universities as an instructor and jobs in industry that could be easily filled by personal holding a bachelors or Masters in physics, chemistry, and biology. However, maybe my situation is worse than most because I'm unable to move because of my daughter.

My only hope and plan of attack is to continue to work as a waiter and continue to search for stable employment. I've also had to conclude that I may have to do research for free so I can continue to publish.

Ironically, the only really positive is that the downturn in the economy has greatly increased my interest in economics (books, course, and self study).

Apologizes if I'm ranting.

Interesting you are making this observation just as there are signs of the US economy slowly improving. That being said, if you look at history, recessions (or depressions) that is due to property busts tend to take years to recover fully (the Great Depression lasted a full decade, and this is only the 4th year from the time of the collapse of 2008).

 

[daveyrocket]

I think currency devaluation would end up being a good thing, because if the dollar becomes weak compared to other currencies then it will no longer be cheaper to ship jobs overseas. That will bring low-skill manufacturing, etc. type jobs back into the country so that we can actually put more people to work creating value. But whether we will actually get there or not remains to be seen.

 

[carlgrace]

I share your scepticism regarding claims of "shortages" or engineers and technical/scientific professionals in the US. Now I cannot comment on the demand of skilled trades in the US, in Canada (specifically in the province of Alberta) there is a substantial demand for people of the skilled trades to work the oil fields (contributing to an unemployment there that is significantly lower than the national average of 8%).

At the same time, you didn't really address my question of if there are any field of any kind in the US that is currently experiencing a shortage of workers relative to the number of jobs available (and I'm not just thinking of technical positions; it could be anything at all -- garbage men, ditch diggers, bank clerks, etc.). The reason I'm asking is that labour demand is not evenly distributed across disciplines, and so I'm curious as to your opinions (or anyone else's opinions) on this point.

I didn't mean to ignore your question. There are in fact a few areas where there are more jobs than workers. One I can speak to with some authority is nursing, as my mother is a retired nurse and I have several friends who are nurses.

There is a severe shortage of nurses, but not enough money to pay them. Therefore, working conditions are declining, a large number of foreign workers are being imported, and wages are very slightly increasing.

I don't think they are many areas where they are significant shortages of workers. I think the whole "mismatch between skills and demand" is a little bit of a stretch, although it is quite true that there are many fewer places for unskilled laborers these days.

I think more interesting is a mismatch in locations of work. Many people are stuck in their communities by underwater mortgages and can't move from places with high unemployment (e.g. California) to places with low unemployment (e.g. Montana and North Dakota) which are booming for the same reasons Central Canada is booming.

 

[carlgrace]

I think currency devaluation would end up being a good thing, because if the dollar becomes weak compared to other currencies then it will no longer be cheaper to ship jobs overseas. That will bring low-skill manufacturing, etc. type jobs back into the country so that we can actually put more people to work creating value. But whether we will actually get there or not remains to be seen.

I agree. Also, the development of other countries is increasing their standard of living. True story: when I started my professional career about 10 years ago, companies could get 4 or 5 talented engineers in Shanghai in my specialty for the cost of one employee in the US. Now it's down to 2. That is a huge difference in a short amount of time! Wages are skyrocketing overseas while they are mostly flat here (unless you're in upper management). So, is getting less attractive.

Interestingly enough, southeast Asian companies are setting up design centers in California. Hauwei, Samsung, and Mediatek have all recently expanded operations. Interesting trend. The same thing happened in the 1980s when the Japanese more or less caught up with us.

 

[Locrian]

I think the US is quite similar to Canada in that sense. The media claim there is a shortage of the skilled trades. I can tell you there in my personal experience there are shortages of various extremely narrow subfields (e.g. specific language or tool skills in software, or extremely specific design experience). However, I think that is mainly due to the lack of interest in industry to do any kind of substantive training. I can tell you when i was in industry the job descriptions were so detailed that it was clear the company was only interested in people who could hit the ground running. There is a significantly lowering of interest in entry-level people. I think that is partially a symptom of sending "routine" work overseas. It is a severely short-sighted strategic error, in my opinion. But it is what it is.

You ask for my humble opinion and I'll give it to you. Claims of "shortages" of engineers and technical/scientific professionals are mostly BS. They usually come from industry groups trying to increase the number of visas to allow more foreign workers in. If there were truly shortages, salaries would increase to entice more people to enter the field. They aren't. So I call shenanigans.

I'm even dubious about the skilled trade shortages. Are salaries rapidly rising for plumbers and pipefitters? Maybe in oil fields, I don't know. But if salaries aren't rising, there isn't a real shortage. The idea of shortages is probably coming from companies looking for tax breaks (or should I say "incentives"). I could be wrong here.

Completely agree with pretty much every sentence in this post.

When people tell me X industry is complaining there aren't enough available workers, I ask them the following question: "How low does the woker's salary have to go before a company claims there are plenty of workers and no need to increase the supply?"

Companies will stop claiming there's a shortage of workers about the same time workers claim there are plenty of jobs openings.

 

[twofish-quant]

I disagree. People leave by choice or leave because there is no choice. Most are leaving because there is no choice. It is better to get them to leave by choice.

Lot's of people are leaving by choice. (Hint: I'm not in the United States.)

Also, if they aren't leaving by choice, what's the problem? It's not unreasonable to argue that that the primary concern of the US government is the employment of US citizens, and if there aren't enough jobs for US citizens, then non-US citizens should leave the US and let their countries handle their employment issues.

I don't think that too many Chinese and Indian Ph.D.'s would object to this policy, because the Chinese and Indian governments *are* rolling out red carpets for Ph.D.'s. Now it may be that this hurts the US in the long run, but that's an issue the US has to work out.

American universities should establish research centers abroad in collaboration with local universities. Help spread the reputation of good research (through good research and branding), and inject enthusiasm that You are going to be a research at MIT (but in X country).

1) I don't see the point of this. Chinese universities and companies are getting the cream of the crop by flashing some attractive offers to Ph.D.'s.

2) The "US brand" has been seriously tarnished.

3) US universities are under severe financial stress. No funds for overseas ventures.

4) Why should the Chinese or Indian governments *allow* US universities to set up local campuses? In the case of China, you'll quickly run into Google-type problems. The Chinese government is going to insist that any US university operating in China comform to Chinese educational policy. Either they do or they don't. Either way, it's going to cause issues.

5) Honestly, because of 4) I think it's going to turn to crap. What's likely to happen is that the foreign research centers end up being either cheap outsourcing centers or just mechanisms to squeeze money out of foreign students.

6) One reason that ambitious Chinese students want to go to Chinese universities is that this is where the Communist Party recruits new talent. In China, there is a glass ceiling and if you want to make it past a certain point, you have just got to be a Party member. If US universities operate in China either they allow the CCP to recruit, or they don't. Either way there are problems.

Good question. I am hoping for a good research network of centers globally. It will be great to do quality research abroad.

In China, the elite universities (Beida, Qinghua, Keda) are as good at research as the top US universities. I believe the same is true for India, but I'll let someone there talk about it.

The problem with the Chinese educational system isn't the elite universities. The strength of the US is that it has a "deep bench." You have excellent public state universities. Also, the *worst* accreditted universities in the US are still decent, whereas the worst universities in China are outright scams.

 

[twofish-quant]

But what do you propose to do about it? Obviously supply is more than meeting demand.

Boost demand. Paul Krugman suggested that we invent a hoax about an alien invasion so that people are willing to spend a ton of money fighting the alien threat. It's not that crazy of an idea. The thing that ended the Great Depression was World War II, and I've been thinking a lot about how to get the "good parts" of WWII without having tens of millions of people die.

What I'd like to see is some "friendly competition" in planting flags in the solar system. China decides to plant a flag on the Moon. They do or they don't. If they do, then the next step is Mars. Once someone wins that game, next stop Jupiter.

The schools are getting less and less publicly subsidized so they aren't in a position to step in. What to do? I think the only thing to do is nothing.

And doing nothing is going to lead to social revolution. Or at least I hope it's going to lead to social revolution. One thing that I worry about is that people will just "get used" to the current situation and think that it's "normal."

I grew up listening to Star Trek and getting brainwashed with Gene Roddenberry's view of the universe. I came of age when the Soviet Union fell, and everyone thought that history had ended, and that we were heading toward utopia. I've been brainwashed into believing in the "American dream" and as America as the "last best hope of the world."

If you are telling me that this is the "best that can be done". Well, I just can't accept that. I still believe in the American dream. Now whether or not the road to the American dream lies in the United States. I hope it does.

Why should US Citizens go into science? It makes no sense.

Because ultimately science and technology leads to economic growth. If we have a social and economic system that discourages people from science, they ultimately this leads to low growth, and then you end up with a death spiral as low growth -> less funding -> lower growth.

If there really were a need for more scientists and engineers (particularly in academia), salaries would rise.

You are assuming that the market leads to the best allocation of resources. That assumption is questionable.

I hope the pendulum starts swinging the other way at some point soon, before something really breaks. My point is that this isn't about academia, this is about our economic system. Good luck untangling *that* rat's nest.

One thing that attracted me to physics is trying to solve hard problems. I'm arrogant enough to think that I can understand something about the creation of the universe. If I'm *that* arrogant, then figuring out the economic system is something that I'm not going to shy away from because it's "too hard."

 

[twofish-quant]

That being said, if you look at history, recessions (or depressions) that is due to property busts tend to take years to recover fully (the Great Depression lasted a full decade, and this is only the 4th year from the time of the collapse of 2008).

That's without government intervention. In China (and India) the government poured massive amounts of money into the economy, and the economic crisis is a distant memory. It's been argued that the cure is worse than the disease, but we'll see about that.

 

[carlgrace]

I don't necessarily disagree with what you're saying, twofish-quant. My point is that this is not something that can be addressed with a tweak. It needs to be addressed with a fundamental change in our economic system.

Maybe that's possible. But these days being moderate gets someone tarred as a Marxist-Socialist-Fascist and being a traditional republican in the vein of Eisenhower or even Nixon gets you label a RINO and drummed out of office.

I think some interesting times are in store (and I mean that as in the famous curse).

I don't know the answer. I wish I did.

 

[twofish-quant]

Wages are skyrocketing overseas while they are mostly flat here (unless you're in upper management). So, is getting less attractive.

There's another factor. In the US, being a scientist or engineer isn't particularly highly respected, but in China it is, so for most Chinese Ph.D.'s, you are going to end up with a higher standard of living in China than in the United States.

One problem with the US is that if you live outside of the US, you can't ignore the US. The US is overwhelmingly powerful, and you have just *feel* how powerful the United States is when you are outside. Conversely, people that live in the US are sometimes quite shockingly unaware of how things are in the rest of the world.

And then China is big (and so is India) so you have a large numbers effect. Probably only the top 10% of the people in China live at the standard of living as people in the US, but that's 100 million people, we are either close or have reached the point where the number of people in China and India that have standards of living similar to America is larger than the number of people in the US.

I'm more worried about the long haul. China got out of the economic crisis partly by building 10,000 km of high speed rail, and now that rail is in place, you can see the economic impact. There are massive government incentives in things like solar cells and biotech.

 

[Pyrrhus]

What do they pay you with? Building more institutions anywhere (especially ones that don't produce more scientists) would certainly help the problem- but where do you get the money?

I know several people who have taken professorships in China and India rather than get on the postdoc treadmill. They generally are working on a much smaller budget in their labs than any lab here- the grants are just much smaller. Its not obvious to me that doubling the number of research institutions does anything- the money remains fixed, so each institution does less.

This is changing... but it will change faster if Universities with high reputations put their neck on the line with foreign governments to establish research centers abroad.

 

[Pyrrhus]

twofishquant,

That is China, a closed country. India is another closed country. I know in Chile, Singapore, Brazil... The research center abroad is working. You get to work with professors at the top of their field while you are abroad doing research that is relevant to the country where the center is, and also will bring high reputation to the local universities. The idea is not to establish CAMPUSES abroad, but to partner with local universities to found research centers funded by local government funding. This is different. The idea is to employ PhDs to do research, not to open campuses to teach undergraduates.

 

[Pyrrhus]

What do they pay you with? Building more institutions anywhere (especially ones that don't produce more scientists) would certainly help the problem- but where do you get the money?

I know several people who have taken professorships in China and India rather than get on the postdoc treadmill. They generally are working on a much smaller budget in their labs than any lab here- the grants are just much smaller. Its not obvious to me that doubling the number of research institutions does anything- the money remains fixed, so each institution does less.

Where do you get the money? from the local governments! Do you think only the USA cares about research? Don't you know that Brazil, Argentina, and others have local defense agencies, space agencies, and others that do fund research in those areas.

 

[carlgrace]

I'm more worried about the long haul. China got out of the economic crisis partly by building 10,000 km of high speed rail, and now that rail is in place, you can see the economic impact. There are massive government incentives in things like solar cells and biotech.

Why are you worried? I'm honestly curious. Standard of living is not a zero-sum game. Sure, the American standard of living will suffer relative to the rest of the world (because we were the only game in town in the late 1940s and 1950s.

I'm not convinced that this has to be a game to be "won". Right now a lot of people are taking advantage of cheap overseas labor, but the countries are developing quickly.

You're quite right that America has chosen against investing in infrastructure. Shame on us.

 

[carlgrace]

Where do you get the money? from the local governments! Do you think only the USA cares about research? Don't you know that Brazil, Argentina, and others have local defense agencies, space agencies, and others that do fund research in those areas.

You do realize, of course, that the problems with not enough spots for PhD graduates is much more acute in South America. I worked for a company that opened a design center in Argentina because there were so many well educated graduates (PhD and MS) who had nowhere to go.

There's a reason why there are far more foreign PhD holders working in the US (and I mean they earned their PhDs from foreign universities) than there are American PhDs working overseas.

I wish an American PhD good luck getting a job with a Brazilian defence agency when there are so many talented Brazilian PhDs wiling to work hard for low wages.

 

[twofish-quant]

I think currency devaluation would end up being a good thing, because if the dollar becomes weak compared to other currencies then it will no longer be cheaper to ship jobs overseas.

But then it becomes more attractive for high mobility workers to move overseas. Over the last few years, the US dollar has depreciated a lot with respect to the Chinese RMB. This means that RMB wages have increased, and it becomes easier for Chinese companies to outbid US companies when it comes to getting skilled engineers.

Also, if you weaken the dollar, then it becomes a lot less attractive to invest in the US than in say China. It also becomes a lot cheaper for foreign companies to buy US companies, which leads to a lot of issues.

That will bring low-skill manufacturing, etc. type jobs back into the country so that we can actually put more people to work creating value.

Don't think so. The USD:CNY has gone from 8:1 to 6:1 over the last two years. That's caused low-skill jobs to leave China, but they've ended up in Vietnam and Indonesia rather than back to the United States.

 

[Pyrrhus]

You do realize, of course, that the problems with not enough spots for PhD graduates is much more acute in South America. I worked for a company that opened a design center in Argentina because there were so many well educated graduates (PhD and MS) who had nowhere to go.

There's a reason why there are far more foreign PhD holders working in the US (and I mean they earned their PhDs from foreign universities) than there are American PhDs working overseas.

I wish an American PhD good luck getting a job with a Brazilian defence agency when there are so many talented Brazilian PhDs wiling to work hard for low wages.

http://www.economist.com/node/17851421

http://www.schwartzman.org.br/simon/acsalaries.pdf

I was offered USD 60K to become a postdoc in one of the research centers I am talking about sponsored by MIT and local universities in Chile. How is USD 60k for a postdoc with health benefits a low wage?

Granted, I am only talking about STEM. These countries do not care about humanities.

 

[carlgrace]

http://www.economist.com/node/17851421

Dude, did you even read this article? There is one sentence about how Brazil wants to become an international science destination. Then it says, and I quote:

Though its own bright graduates still head to Europe or the United States for PhDs or post-doctoral fellowships, nowadays that is more because science is an international affair than because they cannot study at home. The country wants more of them to return afterwards, and for the traffic to become two-way.

Brazil is no longer a scientific also-ran. It produces half a million graduates and 10,000 PhDs a year, ten times more than two decades ago.

So, according to this article, most of Brazil's graduates leave for Europe or the US. And it graduates 10X what it did 2 decades ago. This is exactly the issue we're talking about happening here in the US.

Please explain to me the evidence in that article that indicates that most new positions will be won't be primarily staffed by local candidates and it will amount to anything more than a drop in the bucket.

You're seriously basing your argument on the statement that FAPESP advertised fellowships at a few universities? Whatever you're smoking, it must be pretty good.

 

[carlgrace]

http://www.economist.com/node/17851421

http://www.schwartzman.org.br/simon/acsalaries.pdf

I was offered USD 60K to become a postdoc in one of the research centers I am talking about sponsored by MIT and local universities in Chile. How is USD 60k for a postdoc with health benefits a low wage?

Granted, I am only talking about STEM. These countries do not care about humanities.

Ahh... I see. Argument by anecdote.

So let me try, shall we? I have a tenure-track STEM research position. So that means there isn't any problem in science, right?

 

[twofish-quant]

That is China, a closed country. India is another closed country. I know in Chile, Singapore, Brazil... The research center abroad is working.

What works in Chile, Singapore, and Brazil may not work in China and vice versa. I know a lot about China. I know nothing about how things work in Chile.

Also, China and India are hardly "closed countries." We aren't talking North Korea here.

You get to work with professors at the top of their field while you are abroad doing research that is relevant to the country where the center is, and also will bring high reputation to the local universities.

The thing about China is that you already have a set of universities with excellent reputations.

The idea is not to establish CAMPUSES abroad, but to partner with local universities to found research centers funded by local government funding. This is different. The idea is to employ PhDs to do research, not to open campuses to teach undergraduates.

If it works in Brazil, that's great. I don't see how this is possibly going to work in China.

Western-Chinese university partnerships are extremely difficult because of "Google issues." There are also national security issues. Suppose a US university founds a research center to develop better battery technology and that makes it's way into better submarines for the People's Liberation Army. Uh-oh.

In the case of China, there is the "so what are we getting out of this" issues. If you have a pot of money, you don't want to give it to a foreign university to start a research center. You go up to the professors that work in those universities, show them the pot of money, play some patriotic music, and convince them to jump ship.

Also priorities are different. The US has a huge problem with employment of Ph.d.'s. This simply is not a problem in China in 2012. The Chinese educational system does have lots of problems, but there are different problems.

The other thing is that things change over time. Until 2000, it was *insane* for a Chinese Ph.d. to voluntarily want to go back home. After the dot-com crisis, people started moving back, and after 2007, pretty much everyone who can go back home is going back home. The Chinese government is just flooding research institutes with cash. The reason is that the Chinese government is worried about the "middle income trap" and are thinking about the long term survivability of the Communist Party so they are putting a ton of money into science now, so that they'll have "bread and circuses" in 2025.

This also results in a lot of cultural changes. In the late-1980's and early-1990's, the colleges were hotbeds of anti-government activity. Today, Chinese college students are as a whole probably one of the most pro-government groups out there, because working in the system leads to more upward mobility than trying to overthrow it.

 

[Pyrrhus]

Dude, did you even read this article? There is one sentence about how Brazil wants to become an international science destination. Then it says, and I quote:

Though its own bright graduates still head to Europe or the United States for PhDs or post-doctoral fellowships, nowadays that is more because science is an international affair than because they cannot study at home. The country wants more of them to return afterwards, and for the traffic to become two-way.

Brazil is no longer a scientific also-ran. It produces half a million graduates and 10,000 PhDs a year, ten times more than two decades ago.

So, according to this article, most of Brazil's graduates leave for Europe or the US. And it graduates 10X what it did 2 decades ago. This is exactly the issue we're talking about happening here in the US.

Please explain to me the evidence in that article that indicates that most new positions will be won't be primarily staffed by local candidates and it will amount to anything more than a drop in the bucket.

You're seriously basing your argument on the statement that FAPESP advertised fellowships at a few universities? Whatever you're smoking, it must be pretty good.

Read the next article, and obviously Brazil WANTS to, it has not achieved it yet, but is INVESTING to become so. How is this a problem against my argument? Isn't investing more in Research & Development the point of this discussion? While USA and other countries cut funding?

 

[Pyrrhus]

Ahh... I see. Argument by anecdote.

So let me try, shall we? I have a tenure-track STEM research position. So that means there isn't any problem in science, right?

How is your argument by anecdote superior to my argument by anecdote?

 

[carlgrace]

Read the next article, and obviously Brazil WANTS to, it has not achieved it yet, but is INVESTING to become so. How is this a problem against my argument? Isn't investing more in Research & Development the point of this discussion? While USA and other countries cut funding?

First, you added the second article while I was replying to the first. And yes, it is investing, but my point is they have the same issues we do. They are obviously graduating more people than they can accommodate if they most of their graduates go overseas. And poaching a few people from the US isn't a long term solution to the overproduction of PhDs.

So you have a postdoc. Is there a career path at your institute in Chile?

 

[Pyrrhus]

twofistquant,

Yes, I take it back they are not "closed", but they are not willing to give a chance to this system. I have not researched this on my own, but your explanation seems plausible to me. There is more friction between China and the West, than South America and the West. Also, Singapore is very much an pro-expatriate country, so no surprise there.

 

[Pyrrhus]

First, you added the second article while I was replying to the first. And yes, it is investing, but my point is they have the same issues we do. They are obviously graduating more people than they can accommodate if they most of their graduates go overseas. And poaching a few people from the US isn't a long term solution to the overproduction of PhDs.

So you have a postdoc. Is there a career path at your institute in Chile?

I didn't take the position, and the path was faculty in a University in Chile, or somewhere else if I choose to.

 

[carlgrace]

How is your argument by anecdote superior to my argument by anecdote?

I was sarcastically pointing out that your argument by anecdote is not helpful because the outcome of one individual doesn't matter when we are talking about very large number of individuals. I was using irony as a rhetorical device, which is quite prevalent in the English language (in case you are not a native English speaker).

To spell it out for you:

Obviously the fact that I've been supremely lucky in no way means there is not a crisis. Just as the fact that you have a postdoc in Chile in no way means that the crisis can be solved by overseas institutes. There is an overpopulation of PhDs all over the world.

 

[Pyrrhus]

I was sarcastically pointing out that your argument by anecdote is not helpful because the outcome of one individual doesn't matter when we are talking about very large number of individuals. I was using irony as a rhetorical device, which is quite prevalent in the English language (in case you are not a native English speaker).

To spell it out for you:

Obviously the fact that I've been supremely lucky in no way means there is not a crisis. Just as the fact that you have a postdoc in Chile in no way means that the crisis can be solved by overseas institutes. There is an overpopulation of PhDs all over the world.

You didn't understand. I meant your argument that you worked in Brazil.

In addition, if you look at the salaries for professor in Brazil. They are fine. I wouldn't call USD 90k for a professorship a low wage.

You do realize, of course, that the problems with not enough spots for PhD graduates is much more acute in South America. I worked for a company that opened a design center in Argentina because there were so many well educated graduates (PhD and MS) who had nowhere to go.

There's a reason why there are far more foreign PhD holders working in the US (and I mean they earned their PhDs from foreign universities) than there are American PhDs working overseas.

I wish an American PhD good luck getting a job with a Brazilian defence agency when there are so many talented Brazilian PhDs wiling to work hard for low wages.

 

[carlgrace]

In addition, if you look at the salaries for professor in Brazil. They are fine. I wouldn't call USD 90k for a professorship a low wage.

I agree that isn't a low wage. For a full professor it is less than in the US, but I don't know what the cost of living is in Brazil.

You didn't understand. I meant your argument that you worked in Brazil.

You do realize, of course, that the problems with not enough spots for PhD graduates is much more acute in South America. I worked for a company that opened a design center in Argentina because there were so many well educated graduates (PhD and MS) who had nowhere to go.

There's a reason why there are far more foreign PhD holders working in the US (and I mean they earned their PhDs from foreign universities) than there are American PhDs working overseas.

I wish an American PhD good luck getting a job with a Brazilian defence agency when there are so many talented Brazilian PhDs wiling to work hard for low wages.

Point taken. But I do think the fact that our company opened an office in Argentina because of the availability of cheap labor has slightly more weight than a couple of fellowships offered through Nature.

Maybe you're right, and soon we'll be getting brain drain FROM the USA instead of the brain drain TO the USA we've gotten used to.

 

[StatGuy2000]

There's another factor. In the US, being a scientist or engineer isn't particularly highly respected, but in China it is, so for most Chinese Ph.D.'s, you are going to end up with a higher standard of living in China than in the United States.

One problem with the US is that if you live outside of the US, you can't ignore the US. The US is overwhelmingly powerful, and you have just *feel* how powerful the United States is when you are outside. Conversely, people that live in the US are sometimes quite shockingly unaware of how things are in the rest of the world.

And then China is big (and so is India) so you have a large numbers effect. Probably only the top 10% of the people in China live at the standard of living as people in the US, but that's 100 million people, we are either close or have reached the point where the number of people in China and India that have standards of living similar to America is larger than the number of people in the US.

I'm more worried about the long haul. China got out of the economic crisis partly by building 10,000 km of high speed rail, and now that rail is in place, you can see the economic impact. There are massive government incentives in things like solar cells and biotech.

One of the reasons that China is able to provide such massive incentives is because of its access to funds from state-owned banks where millions of workers (primarily rural, but now increasingly urban workers as well) keep their savings, primarily due to feelings of insecurity about loss of their land or home. However, it should be worth keeping in mind that as salaries rise and standards of living rise, so too would spending, so the individual worker may end up saving less.

This, combined with an eventual contraction of the working population due to the low birth rate (due to the one-child policy, which, even if repealed, will have little impact as a generation of Chinese families are accustomed to and desire small families) and a massive number of retirees , will mean that China will fairly soon have less flexibility in providing massive stimuli to their economy.

 

[twofish-quant]

Why are you worried? I'm honestly curious.

Because one of the other major events in my life was Tiananmen. What caused the Soviet Union to collapse was when people figured out that Communism wasn't creating economic prosperity. There are things that I like about the American political system (i.e. the fact that the US can run a political system without political prisoners).

If we get to 2030, and it looks like China has obviously superior economic performance, then there will be less pressure for China to adopt what I think are the good parts of the US political system (i.e. free elections and freedom of speech), and some pressure to have the US adopt what I think are the bad parts of the Chinese political system.

Standard of living is not a zero-sum game. Sure, the American standard of living will suffer relative to the rest of the world (because we were the only game in town in the late 1940s and 1950s.

Actually, no. The Soviet Union had extremely impressive growth rates in the 1950's.

My worry is that without heavy investment in science and technology, I worry that there will not merely a relative decline, but that growth will go negative. Something that worries me greatly are the economic ideas of Vladimir Popov. His argument was that the Soviet Union's collapse in the 1980's was due to lack of infrastructure investment in the 1960's. The idea was that in the 1950's, the Soviets were able to completely redo their economic infrastructure as they recovered from World War II. Because central planning made it impossible to undertake new capital investment (i.e. if you shut down a factory, your quotas got killed), there was no new investment in industry, and starting in the 1970's, this caused big problems as the Russians were stuck with obsolete technology. My worry is that the lack of infrastructure spending is going to cause the US to go down the same road.

The conventional wisdom is that China is massively overinvesting, but I wonder if that is wrong and the problem is that the US underinvesting. It's worth going back to the 1990's, and seeing that the example which economists were using of a place that had bad economic policies was Singapore, and Singapore is doing pretty great now. One problem is that a lot of current economic thinking puts too much emphasis on efficiency. Investment in new technology is inherently inefficient because you spend money now, but you don't see any benefits for ten to twenty years. Conversely, if you cut investment now, your numbers look great, but there will be heck to pay in ten to twenty years.

I'm not convinced that this has to be a game to be "won".

I think that maybe there should be. Last person that makes it to Jupiter is a rotten egg.

Something that has a big impact on my thinking is "Space, the Final Frontier." If you look at what caused Europe to develop the frontier, it was national competition. England *had* to set up colonies, because the French were doing it, and the French were doing it because Spain did it. Conversely, the reason that China didn't colonize America was because there was no political necessity to do so. The one exception was Taiwan. For several thousand years, China basically ignored Taiwan, but in the 17th century, you suddenly had a massive effort to colonize Taiwan, and that was when the imperial government realized that if they didn't, the Dutch or the Portuguese would.

If we want to get off this planet, then there has to be some national competition. Hopefully, it will be "friendly competion" in which no one gets killed.

I have lots of nightmares. My big nightmare isn't that China makes it back to the moon before the US. My big nightmare is that China makes it back to the moon before the US, and no one in the US cares. One of the worst things that happened to the Space Race was when the US won it, and one of the worst things that happened to science funding was when the Cold War ended.

Right now a lot of people are taking advantage of cheap overseas labor, but the countries are developing quickly.

And that changes the distribution of power. True story. Multinational corporation has a meeting about hiring people. One realizes that this means more jobs for Ph.D.'s in country X and fewer jobs for Ph.D.'s in the US. Someone at the meeting wants to object because that's bad for the US, but realizes that this is a stupid argument because he happens to be the only American in the room.

The thing about multinational corporations is that they are multinational. In the 1950's, you could get a multinational corporation to act in the American interest since all of the important people in the MNC were American (Europe didn't get up and running until the 1960's). You can't do that today, because most MNC's are multinational.

The other thing is that it's not just cheap labor. It's cheap labor + good infrastructure. Why do companies create jobs in China rather than Haiti? Labor in Haiti is even cheaper than China.

You're quite right that America has chosen against investing in infrastructure. Shame on us.

It's not a matter of shame, but of economic survival. One other thing that worries me is that no one in the US seems to be thinking longer term. The financial crisis is causing a lot of pain, and when you are in pain, you don't think ten to twenty years ahead. If you aren't capable of thinking ten to twenty years ahead, then things like high speed rail and money for public universities are just a useless waste of money.

In China, the economic crisis ended in 2008, and so people are thinking strategically about what things are going to look like in 2022, 2032, and 2042.

 

[twofish-quant]

However, it should be worth keeping in mind that as salaries rise and standards of living rise, so too would spending, so the individual worker may end up saving less.

1) As long as spending rises less quickly than savings, then you still have a big pool of money. It's a virtous cycle. Huge pools of capital -> investment in new technology -> more $$$$ -> even bigger pools of capital.

2) One thing about Chinese investment is that most of the increase in savings has come from state owned enterprises. Corporations are in China are making huge profits. Some of those profits are fake, but some of it is real.

3) A lot of the money that is in the Chinese banking system goes into what is effectively social welfare. What happened in 2008, was that the Chinese government was faced with the prospect of tens of millions of unemployed workers, which is not good. So the Chinese government basically ordered the banking system to approve any sort of project which kept people busy. A lot of those projects made zero economic sense, but that wasn't the point. What you ended up with is a ton of debt that the government has to pay off, but there is enough funds to cover that.

One problem with economic theories is that they tend to overabstract things. For example, in most economic models, it doesn't make any difference if someone just gets a check from the government to do nothing, or if they get a check for doing something "non-productive." In reality, it makes a big difference. If you just get a check from the government, you are a "welfare queen." If the government hires people to move rocks from point A to point B, and then hires people to move rocks from point B back to point A, that's inefficient, but it's very different, because by moving rocks, you prove that you are not a lazy bastard.

This, combined with an eventual contraction of the working population due to the low birth rate (due to the one-child policy, which, even if repealed, will have little impact as a generation of Chinese families are accustomed to and desire small families) and a massive number of retirees , will mean that China will fairly soon have less flexibility in providing massive stimuli to their economy.

Unless you increase productivity, partly through the use of science and technology. Which is why the Chinese government is rolling out the red carpet for physics Ph.D.'s. The idea is that scientists and engineers are going to increase productivity so that China doesn't get stuck in the middle income trap.

 

[twofish-quant]

One thing about these conversations is that you may not be able to save the world, but you can at least try to save yourself.

I happen to be a very big fan of Karl Marx. Sometimes people wonder how someone who is a devotee of Karl Marx ended up in investment banking. It's actually quite simple. Marx argues that capitalist societies ultimately end up in a situation in which a small group of people end up screwing over everyone else.

Suppose he is right. And suppose, you can't change the situation. At that point, if you have given up saving the world, and your first priority is to save yourself, what do you do? You do what you can to end up with the screwers rather than the screwed. (There are some very interesting game theory aspects to this.)

Similarly, if you end up with the conclusion that the US is hosed, and there isn't anything you can do about it, then the logical thing to do is to get out of the US while you still can.

 

[Vanadium 50]

This is all very interesting, but can we get back on topic, please?

 

[StatGuy2000]

One thing about these conversations is that you may not be able to save the world, but you can at least try to save yourself.

I happen to be a very big fan of Karl Marx. Sometimes people wonder how someone who is a devotee of Karl Marx ended up in investment banking. It's actually quite simple. Marx argues that capitalist societies ultimately end up in a situation in which a small group of people end up screwing over everyone else.

Suppose he is right. And suppose, you can't change the situation. At that point, if you have given up saving the world, and your first priority is to save yourself, what do you do? You do what you can to end up with the screwers rather than the screwed. (There are some very interesting game theory aspects to this.)

Similarly, if you end up with the conclusion that the US is hosed, and there isn't anything you can do about it, then the logical thing to do is to get out of the US while you still can.

All of your discussions earlier seem to operate under the assumption that spending in China will rise less quickly than savings (btw, spending refers not just to savings at the individual level, but also spending at the national level), or that China's economy will clearly become superior in the future -- an assumption that is dubious at best.

 

[Vanadium 50]

This is all very interesting, but can we get back on topic, please?

 

[twofish-quant]

This is all very interesting, but can we get back on topic, please?

Some people in this thread have expressed the idea that the problems in academia are a symptom of general problems in the economy.

If that's the case then we *can't* discuss problems in academia without discussing the general world economy.

Now, we *can* discuss whether or not we can discuss problems in academia "separately". If you think it's *possible* to do this, I'd be very interested in understanding why this is.

 

[twofish-quant]

All of your discussions earlier seem to operate under the assumption that spending in China will rise less quickly than savings (btw, spending refers not just to savings at the individual level, but also spending at the national level), or that China's economy will clearly become superior in the future -- an assumption that is dubious at best.

If you don't know what's going to happen, one logical thing to do is to go through all of the possible outcomes and then come up with "what happens if..." The Chinese economy could blow up next year, but if it does, then we go into the "mad max" world.

And sometimes you just have to make a decision. They are about to spin the roulette wheel of life, and you have to figure out what number to put your chips on.

1) Savings has been constant or increasing since 1978. Since 2000, the savings rate has actually increased. Household savings are constant, but now that the state-owned enterprises are profitable, they are generating a ton of cash.

2) From where I am, China's economy is superior *now*. The Chinese government made some critical decisions in 2007, and the financial crisis is a distant memory. (Essentially they prevented a bust by creating a new bubble, and then they deflated the bubble).

It's been argued that this is just a flash in the pan, and that the Chinese economy will blow up next year. I just don't see this happening.

So the assumption that the Chinese economy will continue to chug along isn't a crazy one. Yes, it has a dozen problems, but every time someone points out a problem with the Chinese economy, people step back and fix the problem. I'm worried about the US economy, because there isn't this "we have a problem -> let's fix the problem" mentality.

Going back to "if you can't save the world, then save yourself" mentality. One big problem with this is that one has this tremendous amount of guilt. If you leave some place that you love because you think it's going downhill, there are very strong feelings of guilt and betrayal.

One way of dealing with those feelings is to just try to convince yourself that you did everything that you could do. If you tried to save the world, and no one listens to you, then this removes any guilt that you feel when you save yourself.

 

[Vanadium 50]

And we're done here.