Ronald Reagan famously described the distinction between a recession and a depression as follows: “A recession is when your neighbor loses his job. A depression is when you lose yours.”
Right now, a few more economists might be willing to use the D-word.
The “help wanted” publication for Ph.D. economists is sporting a brand new section: suspended or canceled listings. It isn’t pretty. Over 30 job listings from the past few months have already been canceled, and plenty more universities never even listed an ad. And this doesn’t even count all of those who are in a “hiring frost” instead of a “hiring freeze,” or rumors of further cutbacks.
It is going to be a tough few months for newly-minted econ Ph.D.’s. And the long-run news is also grim: An intriguing study published a few years back by my former Stanford colleague Paul Oyer suggests that graduating in a downturn results in a lower-prestige initial job.
Worse, the consequences persist throughout your career, partly because research productivity is determined by the quality of your colleagues. My advice to those aspiring economists worried by all this is simply to keep your heads up. The best strategy for getting a job in a recession is exactly the same as in a boom — do good research, and be tenacious.
While some cost-cutting is inevitable given what has happened to university endowments, I think the extent of these cutbacks is probably myopic. It is rare to see so few employers competing over such an amazing pool of talent. Any dean worth his salt should expand hiring today, and cut back a bit during the booms when talent is scarce.
I wonder if other employers in the “real world” are also seeing the same incredible hiring opportunities that I currently see in the economics market.
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I can testify that some companies are trying to snap up talent.
I work for a financial services company, and we are hiring a large number of software developers, to the point of having employees come in on the weekends and stay late to do interviews.
Of course there is the flip side, what about the employess we get that are TOO good, for our comparatively banal programming problems? Will they leave for a more interesting work environment.in two years when the market is better, just at the point they becoming truly productive.
If they’re so good at economic theory they should make great entrepreneurs so let them start their own businesses.
Like my Business 101 teacher said, no matter how bad the economy is there’s always room for a good salesman.
The economy works in a cyclical way, that is, there are times of downfall and then times of expansion. Clearly, this is a time of downfall, but I believe graduating economists should not fear because after a while things can only get better, right? Maybe the best jobs arent available at the moment but with the wits of people who are knowledgeable in regards to the market, they really cant fail all the bad.
Perhaps the benefit of this large pool of scholars is that each individual will be working to the maximum potential in order to attain the most profitable jobs. Thus, new ideas will arise that will eventually usher the market into the profitable direction.
I do not believe this crisis is part of the so-called economic cycle. The United States became wealthy because of the values of the past generations-hard work and patience for just rewards; and the resources to achieve were there for the taking. Now the world is becoming global and everybody is competing for dwindling energy resources, land for growing food, forests for cutting trees and so on. At the same time the American people are now of the belief that one could be rich by moving papers without actually producing anything, without actually accomplishing something and they all want this tomorrow or the next day. The yearning for great wealth has spread to too many people. An analogy with the weather, storms are cyclical, catasthropic events are not. We are in a catasthropy, and we don’t know yet how devastating it is.
JW said, “research productivity is determined by the quality of your colleagues.” Is this conjecture or grounded in empirical support that is able to identify the effect of colleague quality?
The remedy here is to get rid of tenure; Get rid of the old blood that haven’t produced anything in years and are just sitting there secure in their jobs and with the salary savings bring in the new blood. Tenure has morphed into job security, from what it was originally designed to do.
Real world employers do not deal with tenure. Real world employees have to produce.
If tenure in schools, from the grammar schools to the colleges and universities, was eliminated, there would be boundless opportunities for all you new PhD’s because there will be that simple economic concept of competition.
Actually, I believe it was Truman who first said ‘it’s a recession when your neighbor loses his job, it’s a depression when you lose yours.’ Reagan modified it by adding the Carter punch line, but the core quote you cite was first uttered by Truman.
I’m surprised no one has corrected this already.
Different things are seen as ‘the scarce resource’ in boom time and in recession. During the boom, it’s talent that is scarce, and during recession it’s funding for positions that is lacking.
Employers “in the real world” value funding over talent right now.